EXHIBIT 10.18
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT dated this 13th day of July, 2005, by and
between SONOMA COLLEGE, INC., a California corporation with offices at 0000
Xxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxxxxxxx 00000 ("BORROWER"); and
Wisse Enterprises LLC, a [[Delaware] limited liability company] with offices at
________________________("LENDER").
WHEREAS, Borrow desires to borrow from Lender and Lender desires to
lend to Borrower, on the terms and conditions contained herein, up to Five
Hundred Thousand Dollars ($500,000);
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
LOAN BY LENDER
1.01 AMOUNTS TO BE LOANED BY LENDER. Lender shall loan to Borrower, Three
Hundred Thousand Dollars ($300,000) within five (5) days of the execution of
this Agreement and the Notice attached hereto as EXHIBIT A (the "Initial Loan")
and after the Initial Loan within fifteen (15) days of: (i) the mailing by
Borrower of a written request in accordance with Section 1.02, and (ii)
fulfillment of the conditions set forth in Section 1.03, up to Two Hundred
Thousand Dollars ($200,000).
1.02 NOTICE. Borrower shall notify Lender of its intent to borrow all or a
portion of the monies made available to it by hereunder by written notice,
addressed to Lender at its address first set forth above, via registered mail or
certified mail, postage prepaid, return receipt requested. Such notice shall
include: (i) the amount which Borrower intends to borrow, (ii) the date on which
the notice is deposited with the United States Postal Service, and (iii) the
signature of Xxxxxxx X. Xxxxxx as Chief Executive Officer of Borrower or of
another officer of Borrower authorized to take such action.
1.03 CONDITIONS TO EXTENSION OF THE LOANS. Lender shall be obligated to loan to
Borrower the amount requested by Borrower, up to the aggregate principal amount
of Five Hundred Thousand Dollars ($500,000) if, and only if: (i) Borrower has
mailed to Lender written notice in accordance with the requirements of Section
1.02, (ii) Borrower is not in default as set forth in Section 1.07 herein, and
(iii) Borrower, as of the date of the Section 1.02 notice, has outstanding
indebtedness in the aggregate principal amount of less than Five Hundred
Thousand Dollars ($500,000). Section 1.03 (iii) above shall not apply during any
period in which Borrower is contractually required to have no outstanding
indebtedness.
1.04 INTEREST. Interest shall be payable by Borrower monthly, on the first
business day of each month, on the unpaid balance of the principal amount of
each loan made hereunder from and including the date of such loan, at a rate per
annum equal to the offered rate quoted in the London Interbank market by leading
banks ("LIBOR") or as otherwise set forth in the Note. Notwithstanding the
foregoing, in no event shall interest exceed the maximum rate permitted under
any applicable law or regulation.
1.05 PROMISSORY NOTE. Concurrently with the execution and delivery of this
agreement, Borrower is executing and delivering to Lender a non-negotiable
promissory note, in the form set forth as EXHIBIT A attached hereto (the
"NOTE").
1.06 DEFAULT BY BORROWER. Borrower shall be in default if it fails to make any
payment when due hereunder, absent a good faith dispute as to such payment, and
such failure continues for a period of fifteen (15) days after receipt of notice
of such failure to make payment from Lender.
1.07 DEFAULT BY LENDER. Lender shall be in default hereunder if it fails to loan
to Borrower, in a timely manner and in accordance with the provisions of this
Article I, those sums requested by Borrower.
1.08 REMEDIES OF LENDER. Upon a default by Borrower as set forth in Section
1.06, Lender shall have the right, upon five (5) days written notice of such to
Borrower, to terminate its loan obligations under this Article I and declare all
principal amounts outstanding and interest accrued thereon immediately due and
payable. Failure by Lender to exercise any right, remedy or option under this
agreement or any present or future supplement hereto or any other agreement
between the parties, or delay by Lender in exercising the same, will not operate
as a waiver; no waiver by Lender will be effective unless in writing, and then
only to the extent specifically stated. Lender's rights and remedies under this
agreement will be cumulative and not exclusive of any other right or remedy
which it may have.
1.09 REMEDIES OF BORROWER. Upon a default by Lender as set forth in Section
1.07, (i) the accrual of interest under Section 1.04 on the unpaid balance of
any outstanding principal amounts shall cease.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants as follows: (i) it is a corporation duly formed and validly existing
under the laws of the State of California; (ii) the execution, delivery and
performance of this agreement have been duly and validly authorized by the board
of directors of Borrower and are not in contravention of law, its certificate of
incorporation, operating agreement or of any indenture, agreement or undertaking
to which Borrower is a party or by which it is bound; (iii) this agreement is a
legal, valid and binding obligation of Borrower, enforceable in accordance with
its terms; and (iv) there are no claims for brokerage or other commissions or
finder's or similar fees in connection with the transactions covered by this
agreement.
2.02 REPRESENTATIONS AND WARRANTIES OF LENDER. Lender represents and warrants as
follows: (i) it is a [limited liability company] duly formed and validly
existing under the laws of the State of
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[Delaware]; (ii) the execution, delivery and performance of this agreement have
been duly and validly authorized by the manager of Lender and are not in
contravention of law, its certificate of formation, operating agreement or of
any indenture, agreement or undertaking to which Lender is a party or by which
it is bound; (iii) this agreement is a legal, valid and binding obligation of
Lender, enforceable in accordance with its terms; and (iv) there are no claims
for brokerage or other commissions or finder's or similar fees in connection
with the transactions covered by this agreement.
ARTICLE III
CONSIDERATION FOR THE LOAN FACILITY
3.01 CONSIDERATION. In consideration for the loan facility, the Borrower shall:
(i) pay the Lender Three Hundred and Seventy Five Thousand (375,000) shares of
the Borrower's fully-paid non-assessable restricted common stock provided,
however, that the Lender shall first be required to execute a Subscription
Agreement in the form attached hereto as EXHIBIT B, attached hereto; and (ii)
grant to the Lender an option to purchase all or any part of an aggregate of Two
Hundred and Fifty Thousand (250,000) shares of the common stock, $.0001 par
value per share, of the Borrower at an exercise price of $0.50 per share
pursuant to the terms and conditions of the Nonqualified Stock Option Agreement
attached hereto as EXHIBIT C, attached hereto.
ARTICLE IV
MISCELLANEOUS
4.01 TERM. This agreement shall have a term of one (1) year from the date first
set forth above, unless earlier terminated in accordance with its terms.
4.02 NOTICES. All notices, requests, consents and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been fully given if delivered personally or sent by registered or certified
mail, postage prepaid, return receipt requested, to the addresses for the
parties first set forth above or such other address as either party shall
designate by notice in writing to the other in accordance herewith. Notices sent
in compliance with the provisions of this Section 3.02 shall be deemed given
when sent.
4.03 GOVERNING LAW. This agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
4.04 COMPLETE AGREEMENT; MODIFICATION. This agreement and any agreements
ancillary hereto constitute the complete agreement between the parties hereto
with respect to the subject matter hereof and may not be modified, altered or
amended except by an agreement in writing signed by both of the parties hereto.
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4.05 SEVERABILITY. Whenever possible each provision of this agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this agreement shall be held prohibited or invalid under
applicable law such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this agreement.
4.06 ASSIGNMENT. This agreement may not be assigned or otherwise transferred, by
operation of law or otherwise by either party hereto without the prior written
consent of the other party.
4.07 PARTIES IN INTEREST. This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
4.08 EXPENSES. Each party shall pay all their own costs and expenses incurred in
connection with this agreement, except that in any litigation relating to or
arising from this agreement or exhibits hereto or schedules to said exhibits
hereto, the prevailing party shall be entitled to reasonable attorney fees,
costs and disbursements.
4.09 COUNTERPARTS. This agreement may be executed in counterparts, but both of
such counterparts together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this revolving
credit agreement as of the date first above written.
BORROWER: LENDER:
Sonoma College, Inc. Wisse Enterprises LLC
By:/s/ By:/s/
______________________ ______________________
Xxxxxxx X. Xxxxxx Xxxxxx Xxxxx
Chief Executive Officer
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EXHIBIT A
Promissory Note
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EXHIBIT B
Subscription Agreement
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EXHIBIT C
Nonqualified Stock Option Agreement
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