SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "AGREEMENT") is entered into as of
December 15, 2004, by and among PNC BANK, NATIONAL ASSOCIATION, for itself and
as agent (collectively, the "BANK") under the "Loan Agreement" and the
"Guaranty" (as those terms are defined below), SMALL WORLD KIDS, INC. (the
"DEBTOR"), and SWT, LLC (the "CREDITOR").
RECITALS
The Bank, the Lenders, and Small World Toys ("BORROWER") are parties to a
Revolving Credit and Security Agreement, dated on or about the date hereof (as
amended, supplemented or replaced from time to time, the "LOAN Agreement"). The
Debtor has provided a Continuing Guaranty (the "GUARANTY") of the obligations of
the Borrower, in favor of the Bank, for itself and as agent for the Lenders (the
"LENDERS") described therein, a security agreement securing the Guaranty, and
various other documents, instruments and agreements all between the Bank and the
Debtor (collectively, and as amended, supplemented or replaced from time to
time, the "DEBTOR DOCUMENTS").
The Creditor has extended or is extending to the Debtor certain loans,
advances and extensions of credit, as evidenced by a promissory note dated May
20, 2004 in the original principal amount of $5,000,000 and having an unpaid
principal balance of $5,000,000 (the "SUBORDINATED NOTE") and the other
agreements, documents and instruments between Creditor and Debtor (collectively,
with the Subordinated Note, the "CREDITOR DOCUMENTS").
The Bank and the Creditor hereby desire to set forth the respective rights
and obligations each has as against the other with respect to the Debtor.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS.
"COLLATERAL" means any collateral now or in the future securing the
Obligations, including but not limited to claims against any guarantors of the
Obligations and any collateral securing such guarantees. In addition, Creditor
agrees that any funds of the Debtor which Creditor obtains through the exercise
of any right of setoff or other similar right, constitute Collateral.
"OBLIGATIONS" means all loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Debtor to the Bank (or to any
other direct or indirect subsidiary of PNC Bank Corp.), or owing by the Debtor
to the other Lenders pursuant to the Debtor Documents, of any kind or nature,
present or future (including any interest accruing thereon after maturity or
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding relating to the Debtor, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), whether or not evidenced by any note, guaranty or other instrument,
whether arising under any agreement, instrument or
document, whether or not for the payment of money, whether arising by reason of
an extension of credit, opening of a letter of credit, loan, equipment lease or
guarantee, under any interest or currency swap, future, option or other interest
rate protection or similar agreement, or in any other manner, whether arising
out of overdrafts on deposit or other accounts or electronic funds transfers
(whether through automated clearing houses or otherwise) or out of the Bank's or
any Lender's non-receipt of or inability to collect funds or otherwise not being
made whole in connection with depository transfer check or other similar
arrangements, whether direct or indirect (including those acquired by assignment
or participation), absolute or contingent, joint or several, due or to become
due, now existing or hereafter arising, and any amendments, extensions, renewals
or increases and all costs and expenses of the Bank or any Lender incurred in
the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including reasonable
attorneys' fees and expenses.
"OTHER NOTES" means, collectively, (a) the Secured Promissory Note,
dated May 20, 2004, by Savon Team Sports, Inc. (now known as Small World Kids,
Inc.), in favor of Xxxx Xxxxxxxxxx, in the stated principal amount of
$1,000,000, (b) the Promissory Note, dated May 20, 2004, by Savon Team Sports,
Inc. (now known as Small World Kids, Inc.), in favor of Xxxx Xxxxxxxxxx, in the
stated principal amount of "$700,000 (Subject to Adjustment)", (c) the
promissory note, dated September 17, 2004, by Grantor, in favor of Xxxxxx
Hedgecap Ltd. and/or Xxxxxx Investment Management, in the principal amount of
$1,200,000 (the "XXXXXX NOTE"), (d) the promissory note, dated September __,
2004, by Grantor, in favor of St. Cloud Capital Partners L.P., in the principal
amount of $2,000,000 (the "ST. CLOUD NOTE").
"SUBORDINATED DEBT" means any loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Debtor to the Creditor of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under any agreement, instrument or
document, whether or not for the payment of money, whether arising by reason of
an extension of credit, loan or guarantee or in any other manner, whether direct
or indirect, absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising (including any such obligations purchased or
otherwise acquired by Creditor), whether consisting of principal, interest,
expense payments, management and consulting fees, liquidation costs, attorneys'
fees and costs or otherwise, and all whether arising or created pursuant to the
Creditor Documents or otherwise.
"SUBORDINATE INTEREST" means any lien, ownership interest, security
interest or other interest or claim now held or hereafter acquired by Creditor
in the Collateral.
2. SUBORDINATION.
(a) Subject to Section 3 hereof, the Creditor hereby irrevocably
subordinates and postpones the payment and the time of payment of all the
Subordinated Debt and all claims and demands arising therefrom to the
Obligations and directs that the Obligations be paid in full before the
Subordinated Debt, and Creditor agrees not to ask for, demand, xxx for, take or
receive all or any part of the Subordinated Debt nor any additional security
therefor unless and until all of the Obligations have been paid and performed in
full, in cash.
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(b) Creditor shall: (i) make notations on the books of the Creditor
beside all accounts or on such other statements evidencing or recording any
Subordinated Debt to the effect that such Subordinated Debt is subject to the
provisions of this Agreement, (ii) furnish the Bank, upon Bank's request from
time to time, a statement of the account between the Creditor and the Debtor
representing the Subordinated Debt and copies of each of the Creditor Documents,
and (iii) give the Bank, upon its request, full and free access to the
Creditor's books pertaining only to such accounts with the right to make copies
thereof. Each and every Creditor Document that is a promissory note or a
negotiable instrument shall bear a legend as set forth in paragraph 13(c)
hereof, but this Agreement shall be fully effective, even if no such legend is
affixed.
(c) Creditor represents and warrants that as of the date hereof the
Debtor is not indebted to Creditor except under the Subordinated Note in an
amount not exceeding $5,000,000, and that Creditor has not executed any other
subordination agreement with respect to such debt or the Collateral or the
Debtor.
(d) All security interests now or hereafter acquired by Bank in any
or all of the Collateral, in which the Debtor now has or hereafter acquires any
ownership, leasehold or other interest, shall at all times be prior and superior
to the Subordinate Interest. Said priority shall be applicable irrespective of
the time or order of attachment or perfection of any security interest or the
time or order of filing of any financing statements or other documents, or any
statutes, rules or law, or court decisions to the contrary. Creditor shall not
collect, take possession of, foreclose upon, or exercise any other rights or
remedies with respect to, the Collateral, judicially or non-judicially, or
attempt to do any of the foregoing, without the prior written consent of Bank,
which shall be a matter of Bank's sole discretion.
3. PAYMENTS TO CREDITOR. Notwithstanding any other provision of this
Agreement, the Debtor shall be entitled to pay and the Creditor shall be
entitled to receive each of the following payments, provided that (i) no Event
of Default exists under the Debtor Documents or the Loan Agreement or would
result from such payment, and that neither Debtor nor Creditor shall have
breached any of their representations, warranties, or covenants hereunder, (ii)
Borrower would have been in compliance with the Fixed Charge Coverage Ratio
requirements of Section 6.5(b) of the Loan Agreement for the quarter that ended
immediately preceding such payment if all amounts paid by Borrower to Debtor
since the end of such quarter had been given effect as of such quarter for
purposes of calculating the Fixed Charge Coverage Ratio, and (iii) based upon
Borrower's financial trends, Borrower will be in compliance with said Fixed
Charge Coverage Ratio requirements for future quarters (as determined by Bank in
its good faith business judgment based upon information provided by Borrower):
(a) The regularly scheduled payments of interest (at the non-default
rate), in the amounts and when due in the ordinary course of business under the
terms of the Subordinated Note (as in effect on the date hereof), provided that,
at the time of such payments, the Borrower has "Adjusted Undrawn Availability"
(as defined in the Loan Agreement) of not less than $500,000,
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(b) The regularly scheduled payments of principal, in the amounts
and when due in the ordinary course of business, under the terms of the
Subordinated Note (as in effect on the date hereof), provided that (i) no
"Seasonal Advance" (as defined in the Loan Agreement) is outstanding and (ii) at
the time of such payments, the Borrower has "Undrawn Availability" (as defined
in the Loan Agreement) of not less than $1,000,000, and
(c) Prepayments of principal and interest (at the non-default rate)
owed under the Subordinated Note (as in effect on the date hereof), provided
that (i) no "Seasonal Advance" (as defined in the Loan Agreement) is
outstanding, (ii) at the time of such payments, the Borrower has "Undrawn
Availability" (as defined in the Loan Agreement) of not less than $1,000,000,
(iii) the aggregate of the payments allowed pursuant to this subsection, when
aggregated with all prepayments of principal and interest made on the Other
Notes, shall not at any time exceed an amount equal to 75% of the aggregate of
the cash consideration, net of related expenses, that Debtor has received for
the issuance of equity securities of Debtor after the date hereof and for which
Debtor has delivered to Bank evidence satisfactory to Bank that such cash has
been received, and (iv) no payments shall be allowed pursuant to this subsection
until all indebtedness under the St. Cloud Note and the Xxxxxx Note has been
paid in full.
Except for payments expressly allowed pursuant to this Section, if any, no
payments of principal on the Subordinated Debt, or interest, or costs and
expenses, or other payments, shall be permitted or made.
4. SECURITY. The Debtor shall not grant and the Creditor shall not take
any additional lien on or security interest in any of the Debtor's property, now
owned or hereafter acquired or created, without the prior written consent of the
Bank.
5. DEFAULT; STANDSTILL LIMITATION. The Creditor shall promptly give Bank
written notice of any default under any document, instrument or agreement
evidencing, securing or relating to any of the Subordinated Debt or the
Subordinate Interest. Notwithstanding any breach or default by the Debtor under
the Creditor Documents, the Creditor shall not at any time or in any manner: (a)
commence or join in any proceeding to recover any amounts due on the
Subordinated Debt, commence or join in any involuntary bankruptcy petition or
similar judicial proceeding against Debtor, foreclose upon, take possession of,
or attempt to realize on any Collateral, or proceed in any way to enforce any
claims it has or may have against the Debtor under the Subordinated Debt or
otherwise, or (b) contest, protest or object to any action taken by Bank under
the Debtor Documents, the Loan Agreement or otherwise, unless and until the
Obligations have been fully and indefeasibly paid and satisfied in full.
6. BANKRUPTCY/PROBATE OF DEBTOR. In the event a petition or action for
relief shall be filed by or against the Debtor under any federal bankruptcy
statute in effect from time to time, or under any other law relating to
bankruptcy, insolvency, reorganization, receivership, general assignment for the
benefit of creditors, moratorium, creditor composition, arrangement or other
relief for debtors, the claims of the Bank and the Lenders (secured or
unsecured) against the assets or estate of the Debtor for repayment of the
Obligations shall be indefeasibly paid in full before any payment is made to the
Creditor on the Subordinated Debt, whether such payment is in cash, securities
or any other form of property or rights. The Bank may, in its discretion, file a
proof of claim for or collect the Creditor's claim first for the benefit of the
Bank and/or the other Lenders to the extent of the unpaid Obligations and then
for the benefit of the Creditor (but without creating any duty or liability to
the Creditor other than to remit to the Creditor distributions, if any, actually
received in such proceedings after the Obligations have been paid and satisfied
in full) directly from the receiver, trustee, custodian, liquidator or
representative of the Debtor's estate in such proceeding. The Debtor and the
Creditor shall furnish all assignments, powers or other documents requested by
the Bank to facilitate such direct collection by the Bank.
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7. RECEIPT OF PAYMENTS BY CREDITOR. Should the Creditor directly or
indirectly receive any payment or distribution not permitted by the provisions
of this Agreement or any Collateral or proceeds thereof (including, without
limitation, any funds obtained through the exercise of any right of setoff or
similar right), prior to the full and indefeasible payment and satisfaction of
the Obligations and the termination of all financing arrangements between the
Bank and the Debtor, the Creditor will deliver the same to the Bank in the form
received (except for the endorsement or assignment of the Creditor where
necessary), for application to the Obligations in such order and manner as the
Bank may elect. Until so delivered, the Creditor shall hold the same, in trust,
for the Bank as property of the Bank, and shall not commingle such property of
the Bank with any other property held by the Creditor. In the event the Creditor
fails to make any such endorsement or assignment, the Bank, or any of its
officers or employees on behalf of the Bank, is hereby irrevocably authorized in
its own name or in the name of the Creditor to make such endorsement or
assignment and is hereby irrevocably appointed as the Creditor's
attorney-in-fact for those purposes.
8. BANK'S RIGHTS.
(a) The Creditor hereby consents that at any time and from time to
time, without further consent of or notice to the Creditor and without in any
manner affecting, impairing, lessening or releasing any of the provisions of
this Agreement, the Bank and Lenders may, in their sole discretion: (i) renew,
compromise, extend, expand, postpone, waive, accelerate, terminate, change the
payment terms of, or otherwise modify the Obligations or amend, renew, replace
or terminate the Debtor Documents or any and all other agreements now or
hereafter related to the Obligations; (ii) extend credit to the Debtor or
Borrower in whatever amount on a secured or unsecured basis or take other
support for the Obligations and exchange, enforce, waive, sell, transfer,
collect, adjust or release any such security or other support or any part
thereof; (iii) apply any and all payments or proceeds of such security or other
support and in any order or manner as the Bank, in its discretion, may
determine; and (iv) release or substitute any party liable on the Obligations,
any guarantor of the Obligations, or any other party providing support for the
Obligations.
(b) This Agreement will not be affected, impaired or released by any
delay or failure of the Bank or Lenders to exercise any of their rights and
remedies against the Debtor or any guarantor or under any of the Obligations or
against any Collateral, by any failure of the Bank or Lenders to take steps to
perfect or maintain any lien on, or to preserve any rights to, any Collateral by
any irregularity, unenforceability or invalidity of any of the Obligations or
any part thereof or any security or guarantee therefor, or by any other event or
circumstance which otherwise might constitute a defense available to, or a
discharge of, the Debtor or a subordinated creditor. The Creditor hereby waives
demand, presentment for performance, protest, notice of
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dishonor and of protest with respect to the Subordinated Debt and the
Collateral, notice of acceptance of this Agreement, notice of the making of any
of the Obligations and notice of default under any of the Obligations. The
Creditor waives any right to require Bank or Lenders to marshal any assets in
favor of the Creditor or against or in payment of any or all of the Obligations.
Creditor further waives any defense arising by reason of any claim or defense
based upon an election of remedies by Bank or Lenders which in any manner
impairs, affects, reduces, releases, destroys and/or extinguishes the Creditor's
subrogation rights, rights to proceed against the Debtor for reimbursement,
and/or any other rights of the Creditor.
(c) Nothing in this Agreement will obligate the Bank or Lenders to
grant credit to, or continue financing arrangements with, the Debtor or the
Borrower.
9. CONTINUING AGREEMENT. This is a continuing agreement and will remain in
full force and effect until all of the Obligations and all of the Creditor's
obligations and undertakings to the Bank and Lenders have been fully performed
and until all the Debtor Documents have been terminated. This Agreement will
continue to be effective or will be automatically reinstated, as the case may
be, if at any time payment of all or any part of the Obligations is rescinded or
must otherwise be returned by the Bank or Lenders upon insolvency, bankruptcy,
or reorganization of the Debtor or otherwise, all as though such payment had not
been made.
10. NO CHALLENGE TO LIENS. The Creditor agrees that it will not make any
assertion, claim or argument in any action, suit or proceeding of any nature
whatsoever in any way challenging the priority, validity or effectiveness of the
liens and security interests granted to the Bank or the Lenders.
11. DISPOSITION OR RELEASE OF COLLATERAL.
(a) The Creditor agrees that, until Bank has received payment in
full of all Obligations, now existing or hereafter arising, Bank may dispose of,
and exercise any other rights with respect to, any or all of the Collateral,
free of the Subordinate Interest, provided that the Creditor retains any rights
it may have as a junior secured creditor with respect to the surplus, if any,
arising from any such disposition or enforcement.
(b) If at any time or from time to time the Collateral, or any
portion thereof, is in any manner sold or otherwise transferred, the Creditor's
consent to such disposition shall be automatically and irrevocably given if the
Bank, in its sole discretion and for any reason, consents to such disposition,
and in any event the Creditor shall not be entitled to receive any proceeds
(cash or non-cash) of such disposition unless and until the Obligations have
been indefeasibly paid in full.
(c) If, at any time and for any reason, the Bank releases any lien
on the Collateral, or any portion thereof, the Creditor shall likewise release
its lien on the property so released, if the Creditor has obtained such a lien.
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(d) Upon any disposition of any of the Collateral by Bank, or by the
Debtor with Bank's written consent, the Creditor hereby authorizes Bank to file
Uniform Commercial Code termination statements with respect to any financing
statements in favor of Creditor with respect to Borrower and the Collateral, and
Creditor agrees, if requested by Bank, to execute and immediately deliver any
and all other releases, terminations and other documents or agreements which
Bank deem necessary to accomplish a disposition of the Collateral free of the
Subordinate Interest; provided that Creditor shall retain its Subordinate
Interest in the proceeds of the Collateral so disposed of.
12. ORDER OF PROCEEDINGS. Nothing in this Agreement is intended to compel
the Bank, the Lenders or the Creditor at any time to declare the Debtor in
default or compel the Bank or Lenders to proceed against or refrain from
proceeding against any Collateral in any order or manner. All rights and
remedies of the Bank and Lenders with respect to the Collateral, the Debtor, and
any other obligors concerning the Obligations are cumulative and not
alternative.
13. ASSIGNMENT OF SUBORDINATED DEBT.
(a) The provisions hereof shall inure to the benefit of any
financial institution obtained by the Debtor, the Bank, or the Lenders which
receives a guaranty from Debtor in connection with providing replacement working
capital or other financing for the Borrower in place of the Bank or Lenders,
regardless of whether any such replacement lender provides its own financing or
succeeds to the Bank's or Lenders' financing by assignment. If requested by such
replacement lender, the Creditor shall execute with such replacement lender a
subordination agreement substantially similar to this Agreement.
(b) The Creditor also agrees that as a prior condition of any
assignment of any of its interests under any of the Creditor Documents, the
Creditor shall require the assignee to acknowledge this Agreement and agree, in
writing, to be bound by the terms and conditions hereof.
(c) Each Creditor Document which is a promissory note or a
negotiable instrument shall bear the following legend, or a similar legend
acceptable to Bank, in boldface type:
THIS NOTE IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT IN
FAVOR OF PNC BANK, NATIONAL ASSOCIATION, FOR ITSELF AND AS AGENT.
NOTWITHSTANDING ANY CONTRARY STATEMENT CONTAINED IN THE WITHIN INSTRUMENT,
NO PAYMENT ON ACCOUNT OF ANY OBLIGATION ARISING FROM OR IN CONNECTION WITH
THE WITHIN INSTRUMENT OR ANY RELATED AGREEMENT (WHETHER OF PRINCIPAL,
INTEREST OR OTHERWISE) SHALL BE MADE, PAID, RECEIVED OR ACCEPTED EXCEPT IN
ACCORDANCE WITH THE TERMS OF SAID SUBORDINATION AGREEMENT.
14. FINANCING OF FIDUCIARY. In the event of a bankruptcy, reorganization,
other insolvency or court proceeding for the Debtor and/or Borrower commences,
the Bank and Lenders shall have the option (in their sole and absolute
discretion) to continue to provide financial accommodations (on terms acceptable
to the Bank and Lenders) to the trustee, other fiduciary, or of the Debtor
and/or Borrower as a debtor-in-possession, if the Bank deems such accommodations
to be in its best interests. The subordination and lien priority provisions of
this Agreement shall continue to apply to all advances made during the pendency
of such court proceedings, so that the Bank (for itself and/or on behalf of
Lenders) shall have a prior lien on all Collateral, created before or during
such court proceeding, to secure all Obligations, whether created before or
during such court proceeding. The Creditor hereby waives any right it may have
to object to financing by the Bank or the Lenders during the pendency of such
court proceeding and the Creditor's consent to such financing shall not be
required regardless of whether the court supervising such proceeding approves,
grants or allows adequate protection to the Creditor.
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15. INVESTIGATION OF PARTIES. The Creditor has entered into the Creditor
Documents with the Debtor and the Bank has entered into the Debtor Documents
with the Debtor and the Creditor and the Bank have entered into this Agreement
each upon its own independent investigation, and each makes no warranty or
representation as to each other with respect to the financial condition of the
Debtor, or its ability to repay its loans to the Creditor or the Bank (and
Lenders) in the future. Nothing in this Agreement shall be deemed to constitute
this Agreement as a security or create a joint venture or partnership between
the Creditor and the Bank for any purpose.
16. IMPROPER ACTION BY CREDITOR. If the Creditor, the Debtor or both,
contrary to this Agreement, make, attempt to or threaten to allow the Creditor
to exercise its remedies against the Debtor under the Creditor Documents, or
make any payment or take any action contrary to this Agreement, the Bank may
restrain or enjoin the Creditor and the Debtor from so doing, it being expressly
understood and agreed by the Creditor and the Debtor that: (i) the Bank's (or
Lenders') damages from their actions may at that time be difficult to ascertain
and may be irreparable, and (ii) the Creditor and the Debtor waive any defense
or claim that the Bank (or Lenders) or the Debtor cannot demonstrate damages or
can be made whole by the awarding of damages.
17. INDEMNIFICATION OF BANK. The Creditor agrees to indemnify and to hold
the Bank and the Lenders, and each of their officers, directors, agents and
employees, harmless from any and all losses, damages, liabilities, expenses and
obligations, including attorneys' fees and expenses, as they arise, relating to
actions of the Creditor taken contrary to this Agreement.
18. NOTICES. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder must be in writing and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with confirmation of delivery
with a copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to a party's address set forth below or to such other address
as any party may give to the other in writing for such purpose:
TO THE BANK: PNC BANK, NATIONAL ASSOCIATION
0 XXXXX XXXX XXXXXX, XXXXX 000
XXXXXXXX, XXXXXXXXXX 00000
ATTENTION: PORTFOLIO MANAGER
FACSIMILE NO.: (000) 000-0000
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TO THE CREDITOR: SWT, LLC
0000 XXXXXXXXXX XXXXXXX
XXXXXX XXXX, XXXXXXXXXX 00000
ATTENTION: XXX XXXXXX
FACSIMILE NO.: (000) 000-0000
TO THE DEBTOR: SMALL WORLD KIDS, INC.
0000 XXXXXXXXXX XXXXXXX
XXXXXX XXXX, XXXXXXXXXX 00000
ATTENTION: XXX XXXXXX
FACSIMILE NO.: (000) 000-0000
19. PRESERVATION OF RIGHTS. No delay or omission on the Bank's (or
Lenders') part to exercise any right or power arising hereunder will impair any
such right or power or be considered a waiver of any such right or power, nor
will the Bank's (or Lenders') action or inaction impair any such right or power.
The Bank's (and Lenders') rights and remedies hereunder are cumulative and not
exclusive of any other rights or remedies which the Bank (or Lenders) may have
under other agreements, at law or in equity. Nothing in this Agreement is
intended to modify, alter, reduce or impair any rights which the Bank (or
Lenders) or the Creditor may have against the Debtor under the Debtor Documents
or the Creditor Documents, respectively, or under any other agreement between
them, or either of them, and the Debtor.
20. ILLEGALITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
21. CHANGES IN WRITING. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the Debtor or the
Creditor therefrom, will be effective unless made in a writing and signed by the
Bank, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
22. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
23. COUNTERPARTS. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart.
Any party so executing this Agreement by facsimile transmission shall promptly
deliver a manually executed counterpart, provided that any failure to do so
shall not affect the validity of the counterpart executed by facsimile
transmission.
24. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure
to the benefit of the Debtor, the Creditor and the Bank and their respective
heirs, executors, administrators, successors and assigns (including, without
limitation, the Lenders and any of their participants); provided, however, that
neither the Debtor nor the Creditor may assign this Agreement in whole or in
part without the Bank's prior written consent and the Bank at any time may
assign this Agreement in whole or in part. No claims or rights are intended to
be created hereunder for the benefit of the Debtor or any alleged third party
beneficiary hereof.
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25. INTERPRETATION. In this Agreement, unless the parties otherwise agree
in writing, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; the word "or" shall be deemed to
include "and/or", the words "including", "includes" and "include" shall be
deemed to be followed by the words "without limitation"; references to articles,
sections (or subdivisions of sections) or exhibits are to those of this
Agreement unless otherwise indicated; and references to agreements and other
contractual instruments shall be deemed to include all subsequent amendments and
other modifications to such instruments, but only to the extent such amendments
and other modifications are not prohibited by the terms of this Agreement.
Section headings in this Agreement are included for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose. If
this Agreement is executed by more than one party as Debtor or by more than one
party as Creditor, the obligations of such persons or entities hereunder will be
joint and several.
26. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York. Any judicial
proceeding brought by or against Creditor or Debtor with respect this Agreement
or any related agreement may be brought in any court of competent jurisdiction
in Xxx Xxxx Xxxxxx, Xxxxx xx Xxx Xxxx, Xxxxxx Xxxxxx of America, and, by
execution and delivery of this Agreement, Creditor and Debtor each accepts for
itself and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement.
Creditor and Debtor each hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by registered
mail (return receipt requested) and service so made shall be deemed completed
five (5) days after the same shall have been so deposited in the mails of the
United States of America. Nothing herein shall affect the right to serve process
in any manner permitted by law or shall limit the right of Bank to bring
proceedings against Creditor or Debtor in the courts of any other jurisdiction.
Creditor and Debtor each waives any objection to jurisdiction and venue of any
action instituted hereunder in such courts in New York County and shall not
assert any defense with respect thereto based on lack of jurisdiction or venue
or based upon forum non conveniens. Creditor and Debtor each waives the right to
remove any judicial proceeding brought against Creditor or Debtor (as
applicable) in connection with this Agreement in any state court to any federal
court. Any judicial proceeding by Creditor or Debtor against Agent or any Lender
involving, directly or indirectly, any matter or claim in any way arising out
of, related to or connected with this Agreement or any related agreement, shall
be brought only in a federal or state court located in the County of New York,
State of New York.
27. WAIVER OF JURY TRIAL. EACH OF THE DEBTOR, THE CREDITOR AND THE BANK
IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE DEBTOR, THE CREDITOR AND THE BANK
ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
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WITNESS the due execution hereof as a document under seal, as of the date
first written above.
DEBTOR: CREDITOR:
SMALL WORLD KIDS, INC. SWT, LLC
By: By:
---------------------------- ------------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
------------------------- -----------------------------
BANK:
PNC BANK, NATIONAL ASSOCIATION,
FOR ITSELF AND AS AGENT
By:
------------------------------
Name:
-----------------------------
Title:
-----------------------------
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ACKNOWLEDGEMENT RE SIGNATORY FOR CREDITOR
STATE OF _______________________ )
) SS.:
COUNTY OF ______________________ )
On the ___ day of ___________, 2004, before me personally came
_________________, to me known, who being by me duly sworn, did depose and say
that he/she is the _______________ of _______________, the __________ described
in and which executed the foregoing instrument; and that he/she signed his/her
name thereto as the act and deed of such corporation by order of the board of
directors of said corporation.
-----------------------------------------
Notary Public
