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EXHIBIT 10.28
FORM OF TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (the "Agreement") is made and entered
into as of the ____ day of __________, 1997, by and between XXXXXXXX COFFEE,
INC., a Delaware corporation (the "Borrower"), and _____________, a (the
"Lender").
RECITALS
A. WHEREAS, Borrower desires to borrow ________________ Dollars
($____________) for working capital purposes from Lender.
B. WHEREAS, Lender has agreed to advance ____________
($__________) to the Borrower pursuant to the Secured Promissory Note of even
date (the "Note"), a copy of which is attached hereto as Exhibit A, in
accordance with the terms and conditions provided herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants, agreements, representations and warranties hereinafter set
forth, the parties hereto agree as follows:
1. Definitions.
1.1 Action. The term "Action" has the meaning given in Section
11.11.
1.2 Business Day. The term "Business Day" means a day other
than a Saturday, Sunday or other day on which commercial banks in the State of
California are required by law to close.
1.3 Closing Date. The term "Closing Date" has the meaning
given in Section 3.1.
1.4 Closing. The term "Closing" has the meaning given in
Section 3.1.
1.5 Common Stock. The term "Common Stock" means the Common
Stock, $0.01 par value per share, of Borrower as hereafter modified and any
other class of stock of Borrower or of any other entity into which such stock
shall be converted or for which it shall be exchanged.
1.6 Event of Default. The term "Event of Default" has the
meaning given in Section 10.1.
1.7 GAAP. The term "GAAP" means Generally Accepted Account ing
Principles.
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1.8 Intellectual Property. The term "Intellectual Property"
has the meaning given in Section 4.25.
1.9 Intercreditor Agreement. The term "Intercreditor
Agreement" means the Intercreditor Agreement to be entered into between Lender
and the Other Lenders.
1.10 Loan. The term "Loan" means Lender's $__________ loan to
Borrower subject to and upon the terms and conditions set forth herein.
1.11 Loan Documents. The term "Loan Documents" means this
Agreement, the Note, the Warrant and the Security Agreement.
1.12 Maturity Date. The term "Maturity Date" means September
30, 2002.
1.13 Note. The term "Note" has the meaning given in the
recitals.
1.14 Other Agreements. The term "Other Agreements" means two
or more term loan agreements, on substantially the same terms as this Agreement
except for amounts, between Borrower and the Other Lenders.
1.15 Other Lenders. The term "Other Lenders" means the lenders
identified on Schedule 1.15 that have loaned up to $__________ to the Company on
terms substantially similar to those contained in this Agreement.
1.16 Security Agreement. The term "Security Agreement" means
the Security Agreement of even date, entered into and between Lender and
Borrower, a copy of which is attached hereto as Exhibit B.
1.17 Warrant. The term "Warrant" means the Warrant issued to
Lender by Borrower of even date, in the form of Exhibit C attached hereto.
1.18 Warrant Stock. The term "Warrant Stock" means Borrower's
authorized and unissued Common Stock reserved for issuance upon exercise of the
Warrant, subject to the terms and conditions of this Agreement.
2. Amount and Basic Terms of the Loan.
2.1 Basic Loan Terms. The terms of the Loan shall be as set
forth in this Agreement and in the Note. As more fully described below and in
the Note, Lender shall advance to Borrower ______________ ($___________)
pursuant to the Note at the Closing and Borrower shall repay that amount,
together with interest from the date hereof until fully paid.
2.2 Payments. The entire principal of the Loan, together with
all accrued and unpaid interest, shall be due and payable on ____________, 2002.
Interest shall be due and payable on the first day of each month as it is
accrued, beginning _______________, 1997; provided, however, that if any
interest payment is due on a day which is not a Business Day, such payment shall
be considered timely if paid on the next Business Day.
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2.3 Rate of Interest. The principal balance of the Loan shall
bear interest at the rate set forth in the Note.
2.4 Security Agreement. The Loan shall be secured by the
Security Agreement executed by Borrower as debtor to Lender as a secured party,
granting Lender a first-priority security interest (subject to certain
limitations contained in the Security Agreement), to the extent of the amount of
the indebtedness, in the collateral described in the Security Agreement.
2.5 Warrants. Concurrently with the execution of this
Agreement, Borrower will issue the Warrant to purchase ___________ shares of
Warrant Stock of Borrower to Lender pursuant to the terms of the Warrant.
3. Closing Date Delivery.
3.1 Closing Date. The consummation of the transactions contem
plated by this Agreement ( the "Closing") shall take place at the time and place
mutually agreed upon by the parties hereto on ____________, 1997 (the "Closing
Date").
3.2 Delivery. At the Closing, each party will deliver the Loan
Documents for which it is a party, and Lender will make the advance under the
Loan by check payable to Borrower or by wire transfer to an account designated
by Borrower and acceptable to Lender.
4. Representations and Warranties of Borrower. Borrower
represents and warrants to Lender that:
4.1 Organization and Standing; Charter Documents. Borrower is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate power and
authority to own, lease and operate its property and to conduct its business as
such is presently conducted and as proposed to be conducted. Borrower is duly
qualified to do business as a foreign corporation in any state or jurisdiction
in the United States in which such qualification is required by the nature of
Borrower's business. True and accurate copies of the Certificate of
Incorporation and Bylaws of Borrower, each as currently in effect, have been
made available to Lender and its Counsel.
4.2 Capitalization. Immediately prior to the Closing, the
authorized capital of Borrower will consist only of 25,000,000 shares of Common
Stock and 3,000,000 shares of Preferred Stock.
4.3 Authorization. All corporate action on the part of
Borrower and its officers, directors and shareholders that is necessary for the
authorization, execution, delivery and performance of the Loan Documents by
Borrower has been taken; and the Loan Documents, when executed and delivered,
will constitute valid and legally binding obligations of Borrower, enforceable
in accordance with their terms. The Warrant Stock of Borrower issuable upon
exercise of the Warrant has been duly authorized and reserved and, when and if
delivered, will be duly and validly issued and outstanding, fully paid and
non-assessable, subject to the rights and restrictions described in the Warrant.
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4.4 Validity of the Note. The Note, when issued by Borrower in
accordance with the terms of this Agreement, will be duly and validly issued for
the full amount of the Loan.
4.5 Consents. All consents, approvals, orders, waivers of
authoriza tions of, or registrations, qualifications, designations, declarations
or filings with, any court or any federal or state governmental authority or
third party required on the part of Borrower or any of its subsidiaries in
connection with the consummation of the transactions contemplated by this
Agreement and the other Loan Documents will have been obtained prior to and be
effective as of the Closing Date.
4.6 Compliance with Other Instruments. Borrower is not in
violation of or default under any provision of its Certificate of Incorporation
or Bylaws, each as amended. Borrower is not in material violation of or default
under any provision of any instrument or contract to which it is a party or by
which it is bound, or, to Borrower's knowledge, of any provision of any federal
or state statute, rule, governmental regulation, order or decree, applicable to
it.
4.7 Litigation. There is no material claim, action, suit,
proceeding, arbitration or investigation pending or to the knowledge of Borrower
currently threatened by or against Borrower or any of its affiliates which, if
adversely determined, is likely to have an adverse effect upon Borrower.
Borrower is not a party to or subject to the provi sions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which may have a material effect upon the Loan or Borrower's
ability to enter into and perform its obligations under the Loan Documents.
4.8 Conduct of Business. The conduct of Borrower's business,
as now conducted and as proposed to be conducted, and the closing of the
transactions completed hereby, will not conflict with or result in a breach of
the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which Borrower is now obligated.
4.9 Title to Property and Assets. Except as described in
Schedule 4.9 attached hereto, Borrower owns all its property and assets in its
own name free and clear of all mortgages, liens, claims, loans and encumbrances,
except for liens for taxes not yet due and payable which are contested in good
faith and mechanics liens, materialmen's liens and dairyman's liens for amounts
incurred in the ordinary course of business, and for amounts that either are not
delinquent or will be repaid with proceeds of the Loan promptly following the
Closing. All material contracts of Borrower containing obligations in excess of
$50,000 are listed on Schedule 4.9 hereto. Each of the outstanding liens or
claims in excess of $50,000, which have been or may be asserted against Borrower
or its assets is listed on Schedule 4.9.
4.10 Information; Misleading Statements. No representation,
xxxxxx xx or statement by Borrower in this Agreement or the other Loan
Documents, or in any written statement or certificate furnished or to be
furnished to Lender pursuant thereto contains or will contain any untrue
statement of a material fact or, when taken together, omits or will omit to
state a material fact necessary to make the statements made herein or therein,
in light of the circumstances in which made, not misleading.
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4.11 Offering. Subject to the accuracy of Lender's
representations in Section 5 of this Agreement, the offer, issuance and sale of
the Note, and the Warrant constitutes, and will constitute, transactions exempt
from the registration and prospectus delivery requirement of Section 5 of the
Securities Act of 1933, as amended, and Borrower has obtained (or is exempt from
the requirement to obtain) all qualifications, permits, and other consents
required by all applicable state laws governing the offer, sale or issuance of
securities.
4.12 Accuracy of Financial Records. Each of (a) the financial
state ments of Borrower attached to Schedule 4.12 hereto, (b) the financial
statements of Borrower provided to Lender prior to the date hereof, and (c) the
financial statements of Borrower to be provided to Lender under this Agreement,
shall have been prepared in accordance with GAAP (except as disclosed therein
and except that interim financial statements do not and will not contain
footnotes and are subject to year-end adjustments) and fairly in all material
respects (or, as to financial statements to be provided in the future, will
fairly in all material respects) represent the financial condition of Borrower
as at the dates thereof and the results of operations for the periods then
ended. Borrower is not aware of any fact or claim that when reasonably applied
would render the information contained in any of the financial statements
delivered to Lender on or prior to the date hereof materially false or
misleading.
4.13 No Material Adverse Change. Except as disclosed in any of
Bor rower's financial statements delivered to Lender prior to the date hereof,
Borrower has no actual knowledge of any fact or claim that has occurred that
will cause a material change in Borrower's business, or its ability to operate
or its ability to perform its obligations under the Loan Documents.
4.14 Lender to Have First-Priority Lien; No Junior Liens.
Except as disclosed on Schedule 4.9 and subject to the terms of the
Intercreditor Agreement, this Agreement and the other Loan Documents give Lender
a first-priority security interest in all of the collateral identified in the
Security Agreement, and there are no junior liens presently existing with
respect to such collateral.
4.15 No Other Encumbrances on Borrowers Leases. Except as
described in Schedule 4.15, none of Borrower's rights under any of its leases
are or will be subject to a sublease, assignment or agreement, or have otherwise
been or will be otherwise transferred or encumbered, except to Lender (or to the
Other Lenders pursuant to the Other Agreements).
4.16 No Outstanding Warrants or Options. Except for the
Warrant granted to Lender (and the similar warrants granted to the Other Lenders
in connection with the Other Agreements), options issued to underwriters, and
the rights of Borrower's employees as set forth in various stock option plans
and agreements, there are no outstanding warrants, stock options, or other
similar rights outstanding as of the date of this Agreement with respect to any
securities of Borrower.
4.17 Outstanding Obligations. Except for (a) this Agreement
and the other Loan documents, (b) the Other Agreements, (c) the leases
identified in Schedule 4.9, (d) the co-branding relationships described on
Schedule 4.15, (e) contracts for the purchase of inventory in the ordinary
course of business, and (f) such other obligations as are identified on Schedule
4.17, Borrower has not entered into any contract, agreement or
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commitment which obligates or may obligate borrower to pay, now or in the
future, a total of $100,000 or more to any person or entity or which would
require Borrower to pay, now or in the future, a total of $100,000 or more to
any group of persons or entities for the same or related goods and/or services.
4.18 Financial Information. Borrower shall make all of its
books and financial records available for inspection by Lender or its authorized
agents and repre sentatives within seven days following a written request by
Lender. Promptly upon its receipt of a written request from Lender therefor,
Borrower shall provide Lender with copies of final and interim balance sheets,
final and interim profit and loss statements (broken down on a month-by-month
and/or a store-by-store basis if so requested); final and interim budgets;
narrative explanations by a senior executive of Borrower setting forth why
Borrower's budgets and projections are believed to be accurate and Borrower's
plans for expansion of its business or the closing of any of its stores, leases,
contracts, agreements or other commitments (including "soft commitments") which
obligate or might obligate Borrower to pay, during the term of such lease,
contract, agreement or other commitment, a total of $100,000 or more to any
person or entity (or which would require Borrower to pay a total of $100,000 or
more to any group of persons or entities for the same or related goods and/or
services); explanations of any fact, claim or circumstance which could have a
material adverse effect on Lender, its business or its ability to satisfy its
obligations under this Agreement, the Note, or any of the other Loan Documents,
and all such similar financial records and information as Lender may reasonably
request. Borrower shall promptly furnish Lender with the information identified
in this Section upon Lender's agreement that, with respect to any material
inside information which Lender may receive pursuant to this section, Lender
will retain such information in confidence and use it solely in connection with
the enforcement of Lender's rights under this Agreement and the other Loan
Documents.
4.19 Inspections. Borrower shall grant Lender reasonable
access to all of Borrower's places of business to inspect the premises and the
collateral described in the Security Agreement.
4.20 Notice of Certain Events. Borrower shall promptly notify
Lender of any fact, occurrence or event which (a) constitutes (or which would,
with the passage of time, constitute) an Event of Default under this Agreement
or a breach of or default under any of the other Loan Documents, (b) results in
a fire or other casualty of any of its assets which caused or is expected to
cause damages of $100,000 or more to Borrower, or (c) would render any fact,
representation or warranty contained in any of the Loan documents or otherwise
conveyed to Lender false or misleading. Borrower shall also promptly notify
Lender of each fire, casualty or accident which has caused or is expected to
cause damages or liabilities of $100,000 or more.
4.21 Notification of Governmental Claims; Compliance with
Govern mental Directives. Lender shall promptly notify Lender of any eminent
domain or similar proceedings which are brought or threatened against any of its
properties or assets and of each other court or governmental notice, order,
ruling or directive which would prevent or have a material adverse effect on
Borrower's ability to carry on its business at any of its stores or otherwise
conducts its affairs. Except as Borrower may contest in good faith, Borrower
shall comply with all notices, orders, rulings and directives made by any court
or governmental authority relating to the conduct of its business or the
maintenance of any license, permit or authorization which Borrower is or may be
required to maintain.
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4.22 Payment of Taxes and Assessments. Borrower has filed all
necessary federal, state and local tax returns and similar filings within the
times and in the manner prescribed by law and has paid all taxes and assessments
(including without limitation, all payroll and income taxes and all taxes on
sales, inventory and fixtures) and any penalties and interest relating thereto,
that are or were due and payable.
4.23 Provisions for Obligations. Borrower has made and shall
con tinue to make adequate provisions for the payment of all tax obligations
which are not yet due and payable. Borrower has made and shall continue to make
adequate provisions for the payment or other full satisfaction of all mechanics'
liens, landlord liens, dairymen's liens and similar obligations which it has
incurred or will incur in the future.
4.24 Names; Subsidiaries. Borrower has not, does not and will
not do business under any name or trade name other than its own. Borrower does
not own, directly or indirectly, any interest or investment (whether equity or
debt) in any corporation, partnership, business, trust, joint venture or any
other entity or subsidiary.
4.25 Intellectual Property. Borrower owns, and/or has applied
for, the trademarks, service marks, copyrights, patents, inventions and
processes which are listed on Schedule 4.25 (collectively, "Intellectual
Property"). Except with respect to certain co-branding relationships described
on Schedule 4.15, no person other than Borrower owns any trademark, service
xxxx, copyright, patent, invention or process the use of which is necessary or
contemplated in connection with the operation of Borrower's business or in
connection with the performance of any contract to which Borrower is a party.
Borrower has not infringed, and is not now infringing, on any trademark, service
xxxx, copyright, patent, invention or process which is protected by federal
trademark, copyright or patent protection; and there are no pending or
threatened actions against Borrower relating to any alleged infringement.
4.26 No Guarantees. Borrower is not a guarantor, surety,
co-obligor or otherwise responsible, directly or indirectly, primarily or
secondarily, for the obligation, debt or liability of any other person or
entity.
4.27 Insurance. As set forth in greater detail in the Security
Agree ment, Borrower: (a) maintains and shall continue to maintain adequate
insurance protection against all damages, losses, liabilities, claims and risks
against which it is customary to insure, all in amounts as are adequate given
the nature and size of Borrower's business and its foreseeable risks and (b)
shall cause Lender and its successors and assigns to be named as additional
insureds on all of Borrower's insurance policies.
5. Representations, Warranties and Covenants of Lender. Lender
repre sents and warrants to Borrower that:
5.1 Organization. Lender is a [corporation] [trust] duly
organized, validly existing and in good standing under the laws of the State of
__________ and has all requisite [corporate] power and authority to own, lease
and operate its property and to conduct its business as such is presently
conducted and is proposed to be conducted.
5.2 Authorization. All action on the part of Lender and its
representatives necessary for the authorization, execution, delivery and
performance of the Loan Documents by Lender has been taken; and the Loan
Documents, when executed and
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delivered, will constitute valid and legally binding obligations of Lender,
enforceable in accordance with their terms.
5.3 Consents. All consents, approvals, orders or
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any court or any federal or state governmental authority
required on the part of Lender in connection with the consummation of the
transactions contemplated by this Agreement and the other Loan Documents will
have been obtained prior to and be effective as of the Closing.
5.4 Investment Intent. The Note has been and the Warrant to be
issued to Lender pursuant to this Agreement and the Warrant Stock issuable upon
exercise of the Warrant are being acquired by Lender solely for its own account,
for investment purposes only, and with no present intention of distributing,
selling or otherwise disposing of the Note, the Warrant or the Warrant Stock
issuable upon exercise of the Warrant.
5.5 Sophistication. Lender is able to bear the economic risk
of the investment required pursuant to this Agreement and can afford to sustain
a total loss on such investment, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the proposed investment and therefore has the capacity to protect its
own interests in connection with the Loan.
6. Conditions Precedent to Lender's Obligations at Closing. The
obliga tion of Lender to make the Loan is subject to the satisfaction (or
written waiver by Lender) of all the following conditions precedent:
6.1 Note. A duly-authorized officer of Borrower will have
executed and delivered the Note to Lender.
6.2 Corporate Documents. Lender will have received, in form
and substance satisfactory to Lender and its counsel, a copy of the records of
all actions taken by Borrower, including corporate resolutions of Borrower
authorizing or relating to the execution, delivery and performance of the Loan
Documents and the consummation of the transactions contemplated thereby, and a
certified copy of the Certificate of Incorporation and Bylaws of Borrower.
6.3 Qualifications and Consents. All authorizations,
approvals, permits, consents or waivers if any, of (i) governmental authority or
regulatory body of the United States or of any state or (ii) any third party
that are required on the part of Borrower in connection with the receipt of the
Loan or the issuance of the Note and the Warrant will have been duly obtained
and will be effective on and as of the Closing Date.
6.4 Proceedings and Documents. All corporate and other proceed
ings in connection with the transaction contemplated by this Agreement and all
documents incident to such transaction, including but not limited to the Note
and the Security Agreement are and the Warrant will be in form and substance
satisfactory to Lender and its counsel, and Lender will have received all
counterpart originals or certified or other copies of such documents as it may
reasonably request.
6.5 Performance. Borrower shall have performed and complied
with all terms and conditions required to be performed or complied with by it
prior to or at the Closing, and no Event of Default shall exist.
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6.6 Absence of Litigation. No suit, action, proceeding, court
order, administrative order or investigation shall have occurred, be pending or
threatened which would or seeks to prevent or delay beyond the date of the
Closing, the consummation of the transactions contemplated by this Agreement or
the operation of Borrower's business.
6.7 Opinion of Borrower's General Counsel. Borrower's General
Counsel shall deliver to Lender a legal opinion substantially in the form of
Exhibit D hereto.
6.8 No Material Changes. No fact or event has occurred or been
dis covered which would have a material adverse effect on the accuracy of the
financial information provided by Borrower to Lender or which would have a
material adverse effect on the liability or conduct of Borrower's business.
7. Conditions Precedent to Borrower's Obligation at the Closing.
The obligation of Borrower at the Closing is subject to fulfillment, at or
before the Closing, of each of the following conditions:
7.1 Representations and Warranties True. The representations
and warranties of Lender contained in Section 5 hereof will be true and correct
at and as of the Closing Date.
7.2 Funds Disbursed. Borrower will receive from Lender the
principal sum of the Loan at the Closing.
7.3 Performance. Lender shall have performed and complied in
all respects with all agreements and conditions contained herein required to be
performed by or complied with by it prior to the Closing.
8. Covenants of Borrower. Borrower hereby covenants and agrees
with Lender as follows:
8.1 Corporate Rights; Facilities; Conduct of Business.
Borrower shall:
(a) Maintain and preserve in full force and effect its
corporate existence and all rights, licenses, leases qualifications, privileges,
franchises and other authority necessary or appropriate for the conduct of its
business;
(b) Subject to Borrower's reasonable business judgment as
to opening new business sites and closing those that do not meet Borrower's
financial requirements, Borrower will maintain, preserve and protect all its
properties, assets, equipment and facilities in good order and working repair
and condition (taking into consideration ordinary wear and tear) and from time
to time make, or cause to be made, all needful and proper repairs, renewals and
replacements thereto;
(c) Maintain, preserve and protect its goodwill and all of
its rights to enjoy and use patents, copyrights, trademarks, trade names,
service marks, licenses, leases, and franchises;
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(d) Promptly pay and discharge all taxes, including taxes
on inventories and fixtures, when due and payable, except such as may be
contested in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with GAAP. Borrower
will promptly notify Lender of any challenge, contest or proceeding pending by
or against Borrower before any taxing authority;
(e) Maintain all banking accounts at FDIC- or
FSLIC-insured banks or other financial institutions;
(f) From time to time as may be necessary, disclose to
Lender in writing any material matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described by Borrower in this Agreement or any of the other Loan
Documents (including all schedules and exhibits hereto or thereto) or which is
necessary to correct any information set forth or described by Borrower
hereunder or thereunder which has been rendered inaccurate thereby.
8.2 Expenses. Borrower shall immediately pay Lender upon
demand all costs and expenses incurred by Lender in connection with: (a) the
preparation of this Agreement and all other Loan Documents contemplated hereby;
and (b) the administration of this Agreement and the other Loan Documents for
the term of the Loan. For all purposes of this Agreement, Lender's costs and
expenses shall include, without limitation, all legal fees and expenses,
accounting fees and auditor fees. In no event shall such expenses to Borrower
exceed Five Thousand Dollars ($5,000).
8.3 Reservation of Warrant Stock. Borrower, during the period
within which the Warrant may be exercised, shall at all times have authorized
and reserved, for the purpose of issuance upon the exercise of the Warrant, a
sufficient number of shares of Common Stock to provide for such exercise.
8.4 Negative Covenants. So long as any portion of the Loan
remains outstanding, Borrower will not, without first obtaining Lender's prior
written consent, which consent will not be unreasonably withheld:
(a) declare or pay any dividend on or declare or make any
distribution on account of, any shares of any class of stock now or hereafter
outstanding, or set apart any sum for such purpose, except for shares of Common
Stock issued by Borrower to its employees or other participants pursuant to
Borrower's existing stock option plans; or
(b) issue or enter into any agreement that restricts its
ability to repay the Loan.
8.5 Further Assurances. In addition to the obligations and
documents which this Agreement expressly requires Borrower to execute, deliver
and perform, Borrower will execute, deliver and perform, and will cause its
subsidiaries to execute, deliver and perform, any and all further acts or
documents which Lender may reasonably require to effectuate the purposes of this
Agreement or any of the other Loan Documents.
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9. Prepayment of the Note.
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9.1 Mandatory Prepayments. Borrower shall prepay the
outstanding principal amount (or such lesser principal amount as shall then be
outstanding) of the Note immediately upon the issuance, offer or sale of any
shares of its capital stock pursuant to a secondary offering to the public with
net proceeds of greater than Ten Million Dollars ($10,000,000); excluding,
however, any offering of Common Stock of Borrower pursuant to stock option,
bonus, award or other employee benefit plan and existing options to purchase the
Common Stock of Borrower held by officers, directors or employees of Borrower.
9.2 Optional Prepayment. Borrower may prepay the Loan in any
amount which is an integral multiple of $10,000 at any time without penalty.
10. Events of Default of Borrower.
10.1 Events of Default. Each of the following shall constitute
an event of default ("Event of Default") under this Agreement:
(a) Borrower shall fail to pay when due (whether by
acceleration or otherwise) principal or interest on this Note, and such default
shall have continued for a period of five (5) days; or
(b) Any representation or warranty made by or on behalf of
Bor rower in this Agreement, the Note or in any other Loan Document or in any
statement or certificate given in writing pursuant thereto or in connection
therewith is false, misleading or incomplete in any material respect when made
(or deemed to have been made); or
(c) Borrower breaches or fails or neglects to perform,
keep or observe any covenant set forth in this Agreement, the Note, or any other
Loan Document other than Borrower's obligation to make all payments due under
the Note when due and the same has not been cured within ten (10) calendar days
after Borrower receives notice thereof from Lender; or
(d) The occurrence of an event of default under any of the
Other Agreements or any other material agreement of Borrower for funds borrowed
by Borrower.
(e) Borrower shall commence a voluntary case or other
proceed ing seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing; or
(f) An involuntary case or other proceeding shall be
commenced against Borrower seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect
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or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against Borrower
under the federal bankruptcy laws as now or hereafter in effect; or
(g) This Agreement, the Note or any other Loan Document
for any reason (other than the satisfaction in full of all amounts owing in
connection with the Loan) ceases to be, or is asserted by Borrower not to be, a
legal, valid and binding obligation of Borrower, enforceable in accordance with
its terms, and such occurrence has not been cured to Lender's satisfaction
within five (5) calendar days after Borrower receives notice thereof from
Lender; or
(h) Borrower has fraudulently conveyed or concealed its
property to prevent attachment or execution by its creditors; or
(i) Borrower is insolvent and fails to satisfy or obtain
the release of any judicial lien within 30 days of such lien coming into
existence; or
(j) Borrower has admitted to any person in writing that it
is unable to pay its debts and that it is willing to be adjudged a bankrupt.
10.2 Remedies of Lender. If an Event of Default shall occur
and be continuing or shall exist, the principal amount of the Note and interest
accrued thereon shall be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived, and an action therefor shall immediately accrue. Nothing contained
herein shall be deemed a waiver of any other remedies that Lender may have under
contract or statute.
10.3 Indemnification. Borrower hereby agrees to defend,
indemnify and hold harmless Lender, its officers, employees, agents, successors
and assigns from and against any and all losses, damages, liabilities, claims,
actions, judgments, court costs and legal or other expenses (including, without
limitation, attorneys' fees and expenses) which Lender may incur as a direct or
indirect consequence of: (a) the purpose to which Borrower applies proceeds of
the Loans; (b) the material failure of Borrower to perform any obligations as
and when required by this Agreement, the Note or any of the other Loan
Documents; (c) any failure at any time of any of Borrower's representations or
warranties to be materially true and correct; or (d) any act or omission by
Borrower.
Borrower shall immediately pay to Lender upon demand any
amounts owing under this indemnity, together with interest from the date the
indebtedness arises until paid at the rate of interest applicable to the
principal balance of the Note.
11. Miscellaneous.
11.1 Survival of Representations and Warranties. The
representations and warranties contained herein or made pursuant to this
Agreement and all other Loan Documents shall survive the Closing.
11.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given upon personal delivery, facsimile
transmission
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(with written or facsimile confirmation of receipt), telex or delivery by a
reputable overnight commercial delivery service (delivery, postage or freight
charges prepaid), or on the fourth day following deposit in the United States
mail (if sent by registered or certified mail, return receipt requested,
delivery, postage or freight charges prepaid), addressed to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to Lender, to: ________________________
________________________
________________________
________________________
________________________
with a copy to: ________________________
________________________
________________________
________________________
________________________
(b) if to Borrower, to: Xxxxxxxx Coffee, Inc.
Attention: President
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
with a copy to: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
Attention: Xxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
11.3 Interpretation. When a reference is made in this
Agreement to an Article, Section, Exhibit or Schedule, such reference shall be
to an Article, Section, Exhibit or Schedule to this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
11.4 Counterparts; Faxes. This Agreement may be executed on
any number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same document and shall become
effective when each party has delivered to the other party a counterpart duly
executed by it, it being understood that all parties need not sign the same
counterpart. An executed signature page of this Agreement which is transmitted
by fax shall be treated for all purposes as containing an original signature of
the party whose signature appears thereon; as a courtesy, however, when a
signature is initially provided by fax, an original, hand-signed signature page
shall also be provided.
11.5 Integration. This Agreement, the Note, the Security
Agreement and the Warrant and the exhibits and schedules attached hereto and
thereto constitute the entire agreement among the parties with respect to the
subject matter set forth herein or
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therein and supersede all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof or thereof.
11.6 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
11.7 Governing Law. This Agreement and the rights and
obligations of the parties hereunder shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
California, including its rules of conflicts of law or choice of law.
11.8 Assignment. No party hereto shall assign or transfer or
permit the assignment or transfer of this Agreement without the prior written
consent of the other party.
11.9 Severability. Any portion or provision of this Agreement
which is invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining portions or
provisions hereof in such jurisdiction or, to the extent permitted by law,
rendering that or any other portion or provision of this Agreement invalid,
illegal or unenforceable in any other jurisdiction.
11.10 Brokers. No finder, broker, agent, financial advisor or
other intermediary has acted on behalf of Lender in connection with the
transactions contem plated by this Agreement. Borrower and Lender acknowledge
that Xxxxx Xxxxxxxxxx and Xxxxx Xxxxxxxxxx & Associates (collectively,
"Xxxxxxxxxx") has provided services to Borrower in connection with the
negotiations and transactions which led to the execution of this Agreement and
the other Loan documents, and agree that Borrower shall be solely responsible
for the payment of all sums, if any, which are due to Xxxxxxxxxx in this regard.
Borrower and Lender further agree that, at all times, Xxxxxxxxxx was acting
exclusively for Borrower and not at the request of or for the benefit of Lender.
11.11 Attorneys' Fees. If any party to this Agreement shall
bring any action, suit, counterclaim or appeal for any relief against any other
party, declaratory or otherwise, to enforce the terms hereof or to declare
rights hereunder (collectively, an "Action"), the prevailing party shall be
entitled to recover as part of any such Action its reasonable attorney's fees
and costs, including any fees and costs incurred in bringing and prosecuting
such Action and/or enforcing any order, judgment, ruling or award granted as
part of such Action. "Prevailing party" within the meaning of this section
includes, without limitation, a party who agrees to dismiss an Action upon the
other party's payment of all or a portion of the sums allegedly due or
performance of the covenants allegedly breached, or who obtains substantially
the relief sought by it.
(Signature Page Follows)
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[SIGNATURE PAGE - TERM LOAN AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
BORROWER: LENDER:
XXXXXXXX COFFEE, INC.,
a Delaware corporation ------------------------------------
By: By:
-------------------------------- ---------------------------------
Xxxxx Coin, President ,
------------ ---------------
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