EXHIBIT 10.1
CREDIT FACILITY AGREEMENT
CREDIT FACILITY AGREEMENT dated for reference the 26th day of April, 2004,
AMONG:
MFC MERCHANT BANK S.A., a bank organized under the laws of Switzerland
(hereinafter, the "LENDER")
AND:
EQUIDYNE CORPORATION, a corporation organized under the laws of the
State of Delaware (hereinafter, the "BORROWER")
NOW THEREFORE THIS AGREEMENT WITNESSES that the parties hereto agree as follows:
ARTICLE 1 - INTERPRETATION
SECTION 1.1. DEFINITIONS. When used in this agreement (including the
recitals and schedules hereto) (this "AGREEMENT") or in any amendment hereto,
the terms listed in Schedule A hereto shall, unless otherwise expressly
provided, have the meanings assigned to them therein.
ARTICLE 2 - THE CREDIT FACILITY
SECTION 2.1. CREDIT FACILITY. The Lender shall make available to the
Borrower in accordance with, and subject to the terms and conditions of, this
Agreement, until March 31, 2009 (the "MATURITY DATE"), a revolving credit
facility in the principal amount of up to $20,000,000 (the "COMMITMENT") (the
"CREDIT FACILITY") and made available to the Borrower by way of Advances in
accordance with Section 2.2 hereof. The Maturity Date may be extended for an
additional term of up to six months at the option of the Lender, which option is
exercisable in the Lender's sole discretion.
SECTION 2.2. THE ADVANCES. On the terms and conditions set forth herein
the Lender, from time to time, on any Banking Day, prior to the Maturity Date,
agrees to make advances to the Borrower ("ADVANCES"). Each Advance shall be in
an aggregate amount of not less than $50,000 and in integral multiples of
$10,000.
SECTION 2.3. MAKING THE ADVANCES. Each Advance shall be made on three
Banking Days' notice. Each such notice shall be given by a borrowing notice in
form satisfactory to the Lender (the "BORROWING NOTICE") which shall specify
therein (i) the requested date of such Advance; (ii) the aggregate amount of
such Advance; and (iii) the Outstanding Amount having given effect to such
Advance.
SECTION 2.4. USE OF PROCEEDS. The Borrower shall use all Advances to
fund: (i) operating and acquisition activities; and (ii) working capital and
general corporate activities.
SECTION 2.5. UNUSED LINE FEE. The Borrower agrees to pay to the Lender
an unused line fee (the "UNUSED LINE FEE") of three-quarters of one percent
(.75%) per annum on the daily average of the unused amount of the Commitment
during the period commencing on the date of this Agreement and ending on the
Maturity Date. The Unused Line Fee shall be payable monthly, in arrears, on the
first day of each month and shall be calculated commencing May 1, 2004.
ARTICLE 3 - REPAYMENT
SECTION 3.1. PAYMENTS. The Borrower shall pay or repay to the Lender on
the Maturity Date all amounts owing under the Credit Facility and not previously
paid or repaid hereunder, without set-off, counterclaim or deduction, unless, in
the case of set-off, such set-off is specifically acknowledged in writing by the
Lender.
SECTION 3.2. INTEREST ON ADVANCES. The Borrower shall pay to the Lender
on the first Banking Day of each calendar month (the "INTEREST PAYMENT DATES"),
the first such date falling on May 1, 2004, Interest on the unpaid principal
amount of each Advance made to it from the date of such Advance in U.S. Dollars,
until such principal amount shall be repaid in full, at the Interest Rate.
Interest shall accrue from day to day and shall be compounded monthly in
arrears.
SECTION 3.3. FEES. Provided the Lender is prepared to make Advances to
the Borrower up to the amount set forth in Section 2.1 hereof, the Borrower
shall pay the Lender on the Closing Date an arrangement fee equal to $400,000
(the "ARRANGEMENT FEE"), whether or not any Advances are made under this
Agreement; provided that the parties hereto may agree in writing to include the
Arrangement Fee as an Outstanding Amount, with Interest to be paid thereon in
accordance with Section 3.2 hereof and to be repaid in accordance with Section
3.1 hereof.
SECTION 3.4. BORROWER'S RIGHT TO PREPAY THE LOAN. The Borrower may, on
ten Banking Days' prior notice given to the Lender, prepay the outstanding
aggregate principal amount of the Advances made to the Borrower under the Credit
Facility, in whole or in part, together with accrued Interest to the date of
such prepayment on the amount prepaid. Each prepayment shall be in a principal
amount of not less than $50,000 and in integral multiples of $10,000 thereafter.
ARTICLE 4 - SECURITY
SECTION 4.1. SECURITY. As general and continuing security for the
performance of all Obligations of the Borrower under the Credit Facility
Documents, the Borrower shall deliver to the Lender, in form and substance
satisfactory to the Lender:
(a) on or prior to the Closing Date, a pledge agreement in the
aggregate principal amount of $20,000,000.00, which agreement
shall pledge all existing and future pecuniary claims of the
Borrower against third parties; and
2
(b) promissory note in the aggregate principal amount of
$20,000,000.00 (the "NOTE") duly created by the Borrower in
favor of the Lender, which Note shall contain a first fixed
and specific charge and security interest on the interest of
the Borrower in and to all of its property, assets and
undertakings and a floating charge on the interest of the
Borrower in and to all of its other property, assets and
undertakings not otherwise specifically mortgaged and charged
under the Note, including but not limited to, after acquired
assets or the proceeds of any and all assets. The Borrower
agrees that at any time and from time to time it will take all
actions necessary to effect or maintain the security interest
created hereby and in the Note.
SECTION 4.2. CONTINUED PERFECTION AND AGREED RELEASES OF SECURITY.
Borrower shall take such action and execute and deliver to the Lender such
agreements, conveyances, deeds and other documents and instruments as the Lender
shall reasonably request for the purpose of establishing, perfecting, preserving
and protecting the Security, in each case forthwith upon request therefor by the
Lender and in form and substance reasonably satisfactory to the Lender.
ARTICLE 5 - CONDITIONS PRECEDENT TO THE ADVANCES
SECTION 5.1. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The
obligation of the Lender to make its initial Advance is subject to the
fulfillment of: (i) the conditions precedent set forth in Section 5.2; and (ii)
the following conditions precedent:
(a) the Lender shall have received, in a form satisfactory to it:
(i) copies certified by a senior officer of the Borrower of
its Charter Documents, the resolutions of its board of
directors approving the Credit Facility Documents to which it
is a party and all documents evidencing any necessary
corporate action of the Borrower with respect to the Credit
Facility Documents to which it is a party; (ii) a certificate
of good standing for the Borrower; and (iii) a favorable
opinion of Borrower's counsel as to such matters as the Lender
may require;
(b) the Credit Facility Documents other than the Guarantee shall
have been executed and delivered to the Lender, the Security
shall have been created, and all registrations, filings or
recordings necessary or desirable to preserve, protect or
perfect the enforceability and priority of such Security shall
have been completed, all in such form, content and manner as
is satisfactory to the Lender;
(c) all of the representations and warranties of the Borrower
contained in Article 6 hereof shall be true and correct on and
as of the Closing Date as though made on and as of such date;
and (d) the Lender shall have received such other documents as
it may reasonably request.
SECTION 5.2. CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of
the Lender to make an Advance and the right of the Borrower to deliver a
Borrowing Notice shall be subject to the condition precedent that on the date of
such Advance and after giving effect thereto and to the application of proceeds
therefrom: (i) the representations and warranties of the Borrower
3
contained in Article 6 hereof are true and correct on the date of the Advance as
if made on and as at such date; (ii) no event has occurred and is continuing, or
would result from such Advance, which constitutes or would, with the giving of
notice or the passage of time, constitute an Event of Default; (iii) such
Advance will not violate any applicable Law; (iv) there have been no amendments
to the Charter Documents or authorizing resolutions of the Borrower, subsequent
to those delivered to the Lender pursuant to Section 5.1(a), which are material
to the ability of the Borrower to enter into this Agreement and any of the other
Credit Facility Documents to which the Borrower is a party and to perform its
obligations hereunder and thereunder; and (v) the Lender shall have received, if
requested, such other certificates and documentation as it may reasonably
request with respect to the foregoing and opinions from Borrower's counsel
updating opinions previously delivered.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
SECTION 6.1. REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Lender as outlined in Schedule B hereto.
ARTICLE 7 - COVENANTS OF THE BORROWER
SECTION 7.1. AFFIRMATIVE COVENANTS. Until the Obligations are paid and
satisfied in full and this Agreement has been terminated, the Borrower shall
(or, if applicable, shall cause the relevant action to take place):
(a) FINANCIAL REPORTING. Deliver to the Lender as soon as
available and in any case within 45 days or 90 days after the
end of each financial quarter or year, respectively, quarterly
and audited annual financial statements of the Borrower,
prepared in accordance with generally accepted accounting
principles and certified by a senior officer of the Borrower
as being true and correct in all material respects;
(b) CORPORATE EXISTENCE. Preserve and maintain in full force and
effect its corporate existence and all qualifications to carry
on the Borrower's business;
(c) COMPLIANCE WITH LAWS, ETC. Comply with all applicable Laws,
non-compliance with which could have a Material Adverse
Effect;
(d) PAYMENT OF TAXES AND CLAIMS. Pay and discharge before the same
shall become delinquent: (i) all Taxes, assessments and
Official Body charges or levies; and (ii) all lawful claims
which, if unpaid, might become a Lien upon or in respect of
its business or the Borrower's assets or properties;
(e) VISITATION, INSPECTION, ETC. Permit the Lender or any
representative thereof on reasonable notice to visit and
inspect the Borrower's business, to examine the Borrower's
records and make copies and take extracts therefrom, and to
discuss the Borrower's affairs, finances and accounts with the
officers of the Borrower at
4
such reasonable times during normal office hours and as often
as may be reasonably requested;
(f) NOTICE OF DEFAULT. Promptly notify the Lender in writing of
any default or Event of Default or any default, or event,
condition or occurrence which with notice or lapse of time, or
both, would constitute a default, under any agreement;
(g) MAINTAIN TITLE. Maintain and, as soon as reasonably
practicable, defend and take, all action necessary or
advisable at any time, and from time to time, to maintain,
defend, exercise or renew its right, title and interest in and
to all of its property and assets;
(h) PAY OBLIGATIONS TO LENDER AND PERFORM OTHER COVENANTS. Make
full and timely payment of its obligations hereunder and duly
comply with the terms and covenants contained in each of the
Credit Facility Documents, all at the times and places and in
the manner set forth therein, and at all times take all action
necessary to maintain the Liens provided for under or pursuant
to this Agreement and the Security Documents as valid and
perfected first Liens on the property intended to be covered
thereby (subject only to Permitted Encumbrances);
(i) NOTICES OF OFFICIAL BODY ACTION. Promptly notify the Lender in
writing of any notice of any action by any Official Body or
any action, suit, proceeding or investigation (or any basis
therefor) pending, or to the knowledge of the Borrower
threatened, against or affecting the Borrower before any
Official Body, where the amount involved exceeds $50,000 or
the equivalent amount in another currency;
(j) NOTE. Execute and deliver to the Lender the Note contemplated
in Section 4. 1 (b) hereof at or prior to the time of Closing;
and
(k) FURTHER ASSURANCES. At its cost and expense, upon request by
the Lender, duly execute and deliver, or cause to be duly
executed and delivered, to the Lender, such further
instruments and do and cause to be done such other acts as may
be necessary or proper in the reasonable opinion of the Lender
to carry out more effectually the provisions and purposes of
this Agreement and the other Credit Facility Documents.
SECTION 7.2. NEGATIVE COVENANTS. Until the Obligations are paid and
satisfied in full and this Agreement has been terminated, the Borrower shall not
(or, if applicable, shall not permit the relevant action to take place), unless
the Lender otherwise consents in accordance with the provisions of this
Agreement:
(a) LIENS. Create, incur, assume or suffer to exist any Lien on
any of its property or assets now owned or hereafter acquired
other than the Liens created prior to the entering into of
this Agreement or Liens created by the Security and any
Permitted Encumbrances;
5
(b) DEBT. Create, incur, assume or suffer to exist, contingently
or otherwise, any Debt other than Debt created prior to the
entering into of this Agreement or Debt created by this
Agreement;
(c) CHANGE IN NATURE OF BUSINESS. Make or permit to exist any
change, condition, event or occurrence in or with respect to
the nature of its business which when taken individually with
all other changes, conditions, events or occurrences could
reasonably be expected to have a Material Adverse Effect;
(d) MERGERS, ETC. Enter into or agree to enter into any
transaction or series of related transactions (whether by way
of reconstruction, reorganization, consolidation, combination,
amalgamation, merger, transfer, sale, lease, modification or
otherwise), whereby: (i) all or substantially all of the
Borrower's undertaking, property or assets will become the
property of any other person or the continuing corporation
resulting therefrom; (ii) there would be permitted any change
in the direct or indirect Control of the Borrower; or (iii)
the corporate structure of the Borrower would be modified,
changed, altered or amended in any manner;
(e) DISTRIBUTIONS. Prior to payment in full of all Obligations
hereunder, make any payment on account of a redemption or a
distribution or return of capital (including, without
limitation, cash dividends or any repayment of shareholder
loans or distributions) to any shareholder or holder of
securities;
(f) USE OF PROCEEDS. Use the proceeds of any Advance made
available to the Borrower hereunder for repayment of any
shareholder loans or short-term loans or redemption of any
shareholder capital without the prior written consent of the
Lender;
(g) SUBSIDIARIES. Create any Subsidiaries or transfer and/or
assign any assets or operations to any Subsidiaries; and
(h) AGREEMENTS WITH RELATED PARTIES. Enter into any agreement or
arrangement with any person with whom the Borrower does not
deal at arm's-length, including any affiliate thereof.
SECTION 7.3. RIGHTS. As part of the Lender's compensation for the services to be
performed by it under this Agreement, the Lender may at any time and from time
to time during the term of the Agreement convert the Commitment or any portion
thereof of the Credit Facility to shares of common stock of the Borrower (the
"CONVERTIBLE SHARES").
The rate of exchange for purposes of calculating the number of shares
of Convertible Shares to be exchanged for the Commitment or a portion thereof
should be as follows:
6
amount of Commitment to be converted
/
the 10 day average of the closing price of the Borrower's stock
Notwithstanding anything herein to the contrary, the Lender may convert
the Commitment or any portion thereof by exercising the conversion of
outstanding amounts on the Credit Facility or by advancing such amounts to the
Borrower and then exercising such conversion rights. In the event that the
Borrower terminates this Credit Facility, the Lender shall have 60 days from the
date of termination to exercise these conversion rights. Notwithstanding
anything herein to the contrary, the Lender shall not be entitled to exercise
rights that will cause the Lender to own or control greater than 19.99% of the
voting control of the Borrower until such time as the Borrower has received
shareholder approval to do so. The Borrower shall use its best efforts to secure
the approval of this measure from it shareholders within 90 days of the Closing
Date. Failure to secure such an approval shall be an Event of Default hereunder.
ARTICLE 8 - EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. An event of default ("EVENT OF
DEFAULT") shall have occurred and be continuing in respect of the Borrower if:
(a) FAILURE TO MAKE PAYMENTS. The Borrower shall fail to pay any
principal, Interest, fees or other amounts hereunder when the
same becomes due and payable and in the case of Interest, fees
and other amounts, the failure shall remain unremedied for a
period of three (3) Banking Days following notice from the
Lender to the Borrower;
(b) REPRESENTATIONS AND WARRANTIES INCORRECT. Any representation
or warranty made by the Borrower or the Guarantor herein or in
any other Credit Facility Document or any representation,
warranty or certification made by the Borrower or the
Guarantor (or any of their officers) in any certificate or
other writing delivered in connection with any of the Credit
Facility Documents, or any representation or warranty deemed
to be made by the Borrower or the Guarantor provided herein or
therein, shall prove to have been incorrect in any material
respect when made or deemed to be made;
(c) FAILURE TO PERFORM NEGATIVE COVENANTS. The Borrower shall fail
to observe any of the negative covenants or financial
covenants contained in the Credit Facility Documents
including, without limitation, in Section 7.2;
(d) FAILURE TO PERFORM OTHER COVENANTS. The Borrower shall fail to
perform or observe any other term, covenant or agreement
contained in any of the Credit Facility Documents and such
failure shall remain unremedied for 15 days;
(e) FAILURE TO PAY DEBTS TO THIRD PARTIES. The Borrower shall fail
to pay the principal of or premium or interest on any Debt
which is outstanding in an aggregate principal amount in
excess of $50,000 (or the equivalent amount in any
7
other currency) when the same becomes due and payable and such
failure shall remain unremedied for a period of five Banking
Days;
(f) EVENT OF BANKRUPTCY. The Borrower shall commit or permit to
exist any Event of Bankruptcy in respect of the Borrower;
(g) JUDGMENTS. Any judgment or order for the payment of money in
excess of $50,000 (or the equivalent amount in any other
currency) in respect of the Borrower shall be rendered against
the Borrower and enforcement proceedings shall have been
commenced by any creditor upon such judgment or order and not
stayed within 10 days;
(h) UNENFORCEABILITY. This Agreement or any Credit Facility
Document shall, at any time after execution and delivery, and
for any reason (other than in accordance with the respective
terms), cease to be in full force and effect or shall be
declared to be null and void, or the validity or
enforceability of any thereof shall be contested by the
Borrower or any other party thereto, or the Borrower or any
other such party shall deny that it has any further liability
or obligation thereunder;
(i) CHALLENGE TO SECURITY. Any of the Security shall at any time
after the execution and delivery of the relevant Security
Document and for any reason cease to constitute a valid and
subsisting Lien (subject only to Permitted Encumbrances) in
respect of the assets and properties referred to therein or
cease to rank in priority or in the matter contemplated herein
other than by reason of the act or omission of the Lender;
(j) MATERIAL ADVERSE EFFECT. There occurs any change, condition,
event or occurrence which, when considered individually or
together with all other changes, conditions, events or
occurrences could reasonably be expected to have a Material
Adverse Effect; and
(K) CHANGE OF CONTROL OR THREATENED CHANGE OF CONTROL OF THE BOARD
OF DIRECTORS OF THE BORROWER. There occurs the change of
control or threatened change of control in the total voting
power of the Board of Directors of the Borrower such that the
current Board does not continue in at least 51% of the voting
power of the entire Board. For purposes of this section
"change of control or threatened change of control" shall
include but not be limited to a proxy contest or take out bid
relating to the removal or dilution of the current Board of
Directors of the Borrower below such voting power.
(L) FAILURE TO SECURE SHAREHOLDER APPROVAL. The failure of the
Borrower to secure the approval of the shareholders to permit
the conversion of this Credit Facility into the Conversion
Shares.
8
ARTICLE 9 - TERMINATION
SECTION 9.1. TERMINATION BY LENDER IN CASE OF DEFAULT. If an Event of
Default occurs, the Lender may, by notice to the Borrower, at Lenders entire
discretion, either (a) require the Borrower immediately to repay all amounts
owed under the Credit Facility and not previously paid or repaid hereunder,
including, but not limited to the Unused Line Fee according to Section 2.5.,
whereupon they shall become immediately due and payable; or (b) place the Credit
Facility on demand, whereupon the Loan together with accrued interest and all
other sums payable under this Agreement shall become repayable immediately on
demand made by the Lender. Delay in exercising or non-exercise of any such right
is not a waiver of that right. At any time, Lender shall maintain its rights
under Section 7.3.
SECTION 9.2. TERMINATION BY THE BORROWER. The Borrower may at anytime
terminate the Loan Facility, by giving three (3) month prior notice to the
Lender and by subsequently repaying all amounts owed under the Credit Facility
and not previously paid or repaid hereunder, including, but not limited to the
Unused Line Fee according to Section 2.5., to the Lender according to Section
3.4. above. During the termination period, Lender shall maintain its rights
under Section 7.3.
SECTION 9.3. FEES. The termination for any reason and at any time shall
not influence Borrowers duty to pay the fees due under the present Agreement,
including, but not limited to the Arrangement Fee according to Section 3.3. and
the Unused Line Fee according to Section 2.5 until the Maturity Date. All fees
shall become due and payable immediately upon notification of the termination.
ARTICLE 10 - MISCELLANEOUS
SECTION 10.1. NOTICES, ETC. Except as otherwise expressly provided
herein, all notices, requests, demands, directions and communications by one
party to the other shall be sent by hand delivery or registered mail, and shall
be effective when hand delivered or when delivered by the relevant postal
service, as the case may be. All such notices shall be addressed to the
President of the notified party at its address given on the signature page of
this Agreement, or in accordance with any unrevoked written direction from such
party to the other party in accordance with this Section 9.1.
SECTION 10.2. REIMBURSEMENT FOR CERTAIN EXPENSES AND CHARGES. (1) The
Borrower shall pay or cause to be paid and shall indemnify and save the Lender
harmless against liability for the payment of all reasonable out-of-pocket
expenses, including without limitation counsel or compliance review fees and
expenses and disbursements incurred by the Lender in connection with, among
other things, the preparation or review of documentation pursuant to this
Agreement, on-site inspections by the Lender or the enforcement or preservation
of rights under this Agreement or the other Credit Facility Documents or any
agreement or instrument contemplated hereby or thereby, including such expenses
as may be incurred by the Lender in the collection of the Obligations or any
litigation, proceeding or dispute in any way relating to
9
the Obligations or the Credit Facility Documents or in connection with
remittances, bank charges, wire charges or the customary charges by the Lender
for banking services.
(2) The parties hereto may agree in writing to include any expenses as
an Outstanding Amount, with Interest to be paid thereon in accordance with
Section 3.2 hereof and to be repaid in accordance with Section 3.1 hereof.
SECTION 10.3. NO WAIVER; REMEDIES. No failure on the part of the Lender
or the Borrower to exercise, and no delay in exercising, any right under any of
the Credit Facility Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under any of the Credit Facility
Documents preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by Law.
SECTION 10.4. TAXES, COSTS, ETC. All payments by the Borrower under
this Agreement and the other Credit Facility Documents, including but not
limited to those contemplated in Section 9.2 hereof, shall be made free and
clear of, and without deduction or withholding for, Taxes unless such Taxes are
required by Law to be deducted or withheld. If the Borrower shall be required by
Law to deduct or withhold any Taxes from or in respect of any sum payable under
this Agreement or the other Credit Facility Documents: (i) the sum payable shall
be increased as may be necessary so that after making all required deductions or
withholdings applicable to additional amounts paid under this Section 9.4, the
Lender receives an amount equal to the sum it would have received if no
deduction or withholding had been made; (ii) the Borrower shall make such
deductions or withholdings; and (iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable Law.
SECTION 10.5. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Lender shall have the right, to the
fullest extent permitted by Law, to set off and apply any and all deposits at
any time held and other indebtedness at any time owing by the Lender to or for
the credit or the account of the Borrower, against any and all of the
obligations of the Borrower now or hereafter existing under any of the Credit
Facility Documents.
SECTION 10.6. JUDGMENT CURRENCY. If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due hereunder to the
Lender from U.S. Dollars (the "ORIGINAL CURRENCY") into the Judgment Currency,
the parties hereto agree that the rate of exchange used shall be that at which
in accordance with normal banking procedures the Lender could purchase the
Original Currency with the Judgment Currency on the Banking Day preceding that
on which final judgment is paid or satisfied.
SECTION 10.7. GOVERNING LAW. The Credit Facility Documents shall be
governed by, and construed in accordance with, the laws of Switzerland and shall
be treated in all respects as Swiss contracts without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
SECTION 10.8. CONSENT TO JURISDICTION. (1) Each of the parties hereby
irrevocably attorns to the non-exclusive jurisdiction of the Courts of Zurich
(Switzerland) in any action or
10
proceeding arising out of or relating to this Agreement, or any other Credit
Facility Document. The Borrower agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law; and (2) nothing in
this Section 9.8 shall affect the right of the Lender to serve legal process in
any other manner permitted by Law or affect the right of the Lender to bring any
action or proceeding against the Borrower or its property in the courts of other
jurisdictions.
SECTION 10.9. ENGLISH VERSION. The parties hereby represent, warrant,
acknowledge and agree that: (i) they have agreed that this Agreement be drawn up
in the English language; and (ii) the English version of this Agreement shall
govern for all purposes.
SECTION 10.10. SUCCESSORS AND ASSIGNS. The Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lender, which consent may be arbitrarily withheld.
SECTION 10.11. SEVERABILITY. If one or more provisions of this
Agreement and/or a Security Document be or become invalid, or unenforceable in
whole or in part in any jurisdiction, the validity of the remaining provisions
of this Agreement and/or a Security Document shall not be affected. The parties
hereto undertake to replace any such invalid provision without delay with a
valid provision which as nearly as possible duplicates the economic intent of
the invalid provision.
SECTION 10.12. COUNTERPARTS. This Agreement may be executed in
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed an original and all of which, taken together,
shall constitute one and the same instrument.
SECTION 10.13. SYNDICATION/PARTICIPATION. The Lender may sell,
transfer, assign, participate, syndicate or negotiate to one or more third
parties, in whole or in part, the Commitment and its rights under this Credit
Facility Agreement all without the prior consent of the Borrower.
[SIGNATURE PAGE FOLLOWS]
11
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE LENDER
MFC MERCHANT BANK S.A.
Per: /s/ Xxxxx Xxxxxxx
----------------------------------
Authorized Signing Officer
Per: /s/ Xxxxxxx Xxxxxxxxxxxxxxx
----------------------------------
Authorized Signing Officer
THE BORROWER
EQUIDYNE CORPORATION
Per: /s/ Xxxxx Xxxxxx, President
----------------------------------
Authorized Signing Officer
Per: /s/ Xxxxx Xxxxxx, Secretary
----------------------------------
Authorized Signing Officer
SCHEDULE A
DEFINITIONS
"BANKING DAY" shall mean any day other than a Saturday, Sunday, public holiday
under the laws of the State of New York or other day on which banking
institutions are authorized or obligated to close in New York, New York.
"BBA LIBOR" means the one month London Inter-Bank Offered Rate fixed daily by
the BBA;
"CHARTER DOCUMENTS" means constating documents and by-laws, and all amendments
thereto;
"CLOSING DATE" means two Banking Days following satisfaction by the Borrower or
waiver by the Lender of all conditions to Advance set out in the Credit
Documents or such other date as may be agreed upon by the parties;
"CONSENT" means any permit, license, approval, consent, order, right,
certificate, judgment, writ, injunction, award, determination, direction,
decree, authorization, franchise, privilege, grant, waiver, exemption and other
concession or by-law, rule or regulation;
"CONTROL" over a person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
person, whether through the ownership of voting securities or other equity
interest, representation on its board of directors or body performing similar
functions, by contract or otherwise. The terms "CONTROLLING" and "CONTROLLED"
will have corollary meanings;
"CREDIT FACILITY DOCUMENTS" means this Agreement, the Security Documents and the
Information Documents and all other documents to be executed and delivered to
the Lender or by the Borrower or the Guarantor thereunder;
"DEBT" of any person means: (i) all indebtedness of such person for and in
respect of borrowed money, including obligations with respect to bankers'
acceptances, letters of credit and letters of guarantee; (ii) all indebtedness
of such person for the deferred purchase price of property or services
represented by a note or other evidence of indebtedness or other security; (iii)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such person (even
though the rights or remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under leases which, in accordance with GAAP (or accounting
principles generally accepted in the jurisdiction of incorporation or
organization of such person), are recorded as capital leases in respect of which
such person is liable as lessee; (v) the aggregate amount at which any shares in
the capital of such person which are redeemable or retractable at the option of
the holder thereof may be retracted or redeemed; and (vi) all Debt Guaranteed by
such person; provided that obligations related to any grant or subsidy which is
to be reimbursed on a revenue or profit success basis are not considered Debt
under this definition;
A-1
"DEBT GUARANTEED" by any person means the maximum amount which may be
outstanding at any time of all Debt of the kind referred to in (1) through (v)
or the definition of Debt which is directly or indirectly guaranteed by such
person or such person agreed (contingently or otherwise) to purchase or
otherwise acquire, or in respect of which such person is otherwise assured a
creditor against loss by means of an indemnity, security or bond;
"DOLLAR" or "$" means the currency of the United States of America.
"EVENT OF BANKRUPTCY" means, in respect of any person, that such person shall
generally not pay its Debts as such Debts become due, or shall admit in writing
its inability to pay its Debts generally as they become due, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any such person seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding-up, a reorganization, arrangement,
adjustment, protection, relief or a composition of it or its Debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or for the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against such
person (but not instituted by such person), either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for relief
against such person or for the appointment of a receiver, trustee, custodian or
other similar official for such person or for any substantial part of its
property) shall occur; or such person shall take any action to authorize any of
the actions set forth above;
"INFORMATION DOCUMENTS" means, collectively, at any time and in any form,
information provided by the Borrower or on behalf of the Borrower, or by the
Guarantor or on behalf of the Guarantor, to the Lender in writing in respect of
the Borrower's business or the Guarantor's business, including, without
limitation, all certificates, the financial statements of the Borrower or the
Guarantor and all materials reasonably requested by the Lender for the purpose,
inter alia, of providing such information to prospective assignees, all as from
time to time amended, supplemented or replaced;
"INTEREST" means the interest accrued on Advances outstanding from time to time
at the Interest Rate compounded monthly not in advance, and payable, in arrears,
on the Interest Payment Dates;
"INTEREST PERIODS" means, collectively, periods of one month, each subsequent
period commencing upon the expiry of the prior period, and "INTEREST PERIOD"
means any one such period. Interest shall be calculated on the basis of a year
of 360 days and the actual number of days (including the first day but excluding
the last day) occurring in the period for which such Interest is payable;
"INTEREST RATE" means, at any time, Libor plus 3.5% per annum. With each
successive Interest Period the Libor shall be reset on the second Banking Day
prior to the commencement of the Interest Period and there shall be a
corresponding change in the rate of interest payable under this Agreement
without the necessity of prior notice thereof to the Borrower or any other
person;
"JUDGMENT CURRENCY" means the currency in which a court of competent
jurisdiction may render judgment in connection with any litigation relating to
the repayment of any amounts under this Agreement; "Law" means any law
(including common law and equity), constitution, statute, order, treaty,
regulation, rule, ordinance, order, injunction, writ, judgment, determination,
decree or award of any Official Body;
"LIBOR" means BBA Libor or, if no such published rate is then available, the
rate of interest calculated by the Lender, as being the arithmetic average
(rounded up, if necessary, to the nearest full multiple. of 1/16 of one percent)
at which, in accordance with its normal practice, it would be prepared to offer
to leading banks in the London interbank market for delivery on the first day of
the particular Interest Period and for a period equal to such Interest Period
based on the number of days comprised therein, deposits in U.S. Dollars of
amounts comparable to the Principal Sum or the balance outstanding thereof
during such Interest Period, at or prior to 11:00 a.m. London, England, local
time on the second Banking Day prior to an Advance and thereafter on the second
Banking Day prior to the commencement of each subsequent Interest Period;
"LIEN" means any mortgage, pledge, lien, hypothecation, security interest or
other encumbrance or charge (whether fixed, floating or otherwise) or title
retention, any right of set-off (arising otherwise than by operation of Law) and
any deposit of monies under any agreement or arrangement whereby such monies may
be withdrawn only upon the fulfillment of any condition as to the discharge of
any other indebtedness or other obligation to any creditor, or any right of or
arrangement of any kind with any creditor to have its claim satisfied prior to
other creditors with or from the proceeds of any properties, assets or revenues
of any kind now owned or later acquired;
"MATERIAL ADVERSE EFFECT" means: (i) a material adverse effect on the property
or assets of the Borrower and its Subsidiaries taken as a whole; (ii) a material
adverse effect on the condition or prospects, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole; (iii) a material adverse effect
on the ability of the Borrower to perform and comply with this Agreement or to
pay or perform any of the Obligations; (iv) a material adverse effect on the
priority, effectiveness or enforceability of the Security; or (v) a material
adverse effect on the condition or prospects, financial or otherwise, of the
Borrower;
"OBLIGATIONS" means all obligations, liabilities and indebtedness of the
Borrower to the Lender with respect to the principal of and Interest on Advances
and the payment or performance of all other obligations, liabilities and
indebtedness of the Borrower to the Lender under this Agreement or arising under
and pursuant to any one or more of the Credit Facility Documents or with respect
to the Advances and all fees, costs, expenses and indemnity obligations
thereunder;
"OFFICIAL BODY" means any government or political subdivision or any agency
(including, without limitation, any licensing or regulatory agency), body,
office, authority, bureau, central bank, monetary authority, commission,
department or instrumentality thereof, or any court, board, tribunal, grand jury
or arbitrator, commission or instrumentality thereof, whether foreign or
domestic and, when used in the context of a particular person having
jurisdiction over such person;
A-3
"OUTSTANDING AMOUNT" means, in respect of the Credit Facility, on any day, an
amount calculated and expressed in U.S. Dollars equal to the aggregate principal
amount of all Advances made by the Lender under the Credit Facility;
"PERMITTED ENCUMBRANCES" means, in respect of the Borrower, from time to time,
any Lien not intentionally created by the Borrower and covering an asset which
the Lender determines (acting reasonably) not to be required for or integral to
the operation of the business of the Borrower or the effectiveness or value of
the Security, and in respect of which Lien either (i) the same is discharged or
(ii) the Borrower provides the Lender such substituted security as the Lender
-shall consider satisfactory, in either (i) or (ii) above within 15 days of
written notice from the Lender to the Borrower;
"SECURITY DOCUMENTS" means the documents referred to in Section 4.1 of this
Agreement and the agreements, instruments and documents delivered from time to
time to the Lender by the Borrower, the Guarantor or any other person, for the
purpose of establishing, perfecting, preserving and protecting the Security; and
"SECURITY DOCUMENT" means any one of them as the context prescribes or requires;
"SUBSIDIARY" means, at any time, as to any person, any corporation, partnership
or other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at such time directly or indirectly owned by
such a person; and "Taxes" means any and all present or future taxes (including,
without limitation, all stamp, documentary, excise or property taxes), levies,
imposts, deductions, charges or withholdings and liabilities with respect
thereto.
A-4
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
(A) ORGANIZATION AND CORPORATE POWER. The Borrower has been duly
incorporated and organized and is validly subsisting and in good
standing under the laws of its jurisdiction and has full corporate
right, power and authority to enter into and perform its obligations
under each of the Credit Facility Documents to which it is or shall be
a party and has full corporate right, power and authority to own and
operate its properties and to carry on its business;
(b) CONFLICT WITH OTHER INSTRUMENTS. The execution and delivery by the
Borrower of each of the Credit Facility Documents and the performance
by the Borrower of its obligations thereunder, including, without
limitation, the performance of the terms of the Security Documents, do
not and will not: (i) conflict with or result in a breach of any of the
terms, conditions or provisions of: (A) the Charter Documents of the
Borrower; (B) any Law applicable to or binding on the Borrower; or (C)
any contractual restriction binding on or affecting the borrower or its
properties the breach of which would have a Material Adverse Effect; or
(ii) result in, or require or permit: (A) the imposition of any Lien on
or with respect to the properties now owned or hereafter acquired by
the Borrower; or (B) the acceleration of the maturity of any Debt of
the Borrower, under any contractual provision binding on or affecting
the Borrower;
(c) CONSENTS, OFFICIAL BODY APPROVALS. The execution and delivery of each
of the Credit Facility Documents and the performance by the Borrower of
its obligations thereunder have been duly authorized by all necessary
action on the part of the Borrower, and no Consent under any applicable
Law and no registration, qualification, designation, declaration or
filing with any Official Body having jurisdiction over the Borrower is
or was necessary therefor. The Borrower possesses all Consents, in full
force and effect, under any applicable Law which are necessary in
connection with the operation of its business, the non-possession of
which could reasonably be expected to have a Material Adverse Effect;
(d) EXECUTION OF BINDING OBLIGATION. The Agreement has been duly executed
and delivered by the Borrower, and the Agreement constitutes, and the
remaining Credit Facility Documents when duly executed by the Borrower
pursuant to the Agreement and delivered for value will constitute,
legal, valid and binding obligations of the Borrower, enforceable
against it in accordance with their respective terms;
(e) NO LITIGATION. There are no actions, suits or proceedings pending or,
to the knowledge of the Borrower, after due inquiry, threatened against
or affecting the Borrower (nor, to the knowledge of the Borrower, after
due inquiry, any basis therefor) before any Official Body having
jurisdiction over the Borrower which purport to or do challenge the
validity or propriety of the transactions contemplated by the Credit
Facility Documents or the documents, instruments or agreements executed
and delivered in connection therewith or
B-1
related thereto, which if adversely determined could reasonably be
expected to have a Material Adverse Effect;
(f) NO DEFAULTS. The Borrower is not in breach of or in default under, in
any respect: (i) its Charter Documents; (ii) any applicable Law; (iii)
any contract or agreement binding on or affecting it or its property or
assets (including, without limitation, the Credit Facility Documents);
(iv) any material indenture, mortgage, deed of trust; or (v) any writ,
judgment, determination or award binding on it or affecting it where
such breach or defect could, in the case of (ii), (iii), (iv) or (v)
above, have a Material Adverse Effect;
(g) INFORMATION DOCUMENTS. The information contained in the Information
Documents is true and accurate in all material respects and does not
contain any untrue statement of a material fact. The Information
Documents do not omit to state any fact necessary in order to make any
of the information contained in the Information Documents not
misleading in all material respects;
(h) MATERIAL CHANGES. No changes occurred or are continuing in respect of
the financial condition of the Borrower from that set out in the most
recently delivered financial statements of the Borrower which could
have a Material Adverse Effect; and no Law, regulation, rule or policy,
or any change therein, has been enacted or proposed prior to the
Closing Date which may have a Material Adverse Effect;
(i) TITLE TO ASSETS. The Borrower has good and marketable title to all of
its properties and assets, and the Security will constitute a first
charge on the legal and beneficial interests of the Borrower in and to
all such properties and assets, subject only to such Liens as are
described in Section 7.2(a) of the Agreement and the Permitted
Encumbrances;
(j) ABSENCE OF CHANGES. Since the date of the most recently delivered
financial statements of the Borrower, the Borrower has carried on its
business, operations and affairs only in the ordinary -and normal
course consistent with past practice; and
B-2
