SECOND AMENDED AND RESTATED REVOLVING LINE OF CREDIT AGREEMENT
SECOND AMENDED AND RESTATED REVOLVING LINE OF CREDIT
AGREEMENT
This Second Amended and Restated Revolving Line of Credit Agreement (the "Agreement") is made and entered into on this 8th day of November 2005, by and between Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxxxx(individually, “Xxxxxx” or “Seymour” and collectively, "Lender"), and Nord Resources Corporation, a Delaware corporation ("Borrower"). Lender and Borrower are sometimes referred to herein individually as a “party” and collectively as, the “parties”.
WHEREAS, the parties have entered into that certain Revolving Line of Credit Agreement (the “Credit Agreement”), dated as of June 21, 2005, pursuant to which the Lender established for a period extending to December 31, 2005, a revolving line of credit in the principal amount of Six Hundred Thousand Dollars ($600,000.00), and evidenced by that certain secured promissory note (the “Original Note”), dated as of June 21, 2005 in favor of Lender;
WHEREAS, the Borrower had entered into a loan transaction with Auramet Trading, LLC, a Delaware limited liability company (“Auramet”) pursuant to which the Lender entered into a subordination agreement (the “Auramet Subordination Agreement”) and agreed to subordinate their security interests in certain of the assets of the Borrower in favor of Auramet;
WHEREAS, the Borrower has now entered into a loan transaction with Nedbank Limited, a South African limited liability company (“Nedbank”) pursuant to which the Lenders have entered into a subordination agreement with Nedbank, dated as of even date herewith (the “Subordination Agreement”);
WHEREAS, pursuant to the Subordination Agreement, the Lender has agreed to subordinate, among other things, its security interest in certain of the assets of the Borrower securing payments under the Credit Agreement and the Original Note; and
WHEREAS, the parties desire to amend and restate the Credit Agreement to provide for, among things, a reflection of the subordinated status of the indebtedness of the Borrower to the Lender in favor of Auramet, to extend the maturity date of Borrower’s indebtedness to Lender, and to comply with Lender’s obligations under the Subordination Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, and the promises and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby amend, restate, and agree as follows:
1. LINE OF CREDIT. Lender hereby establishes for a period extending to the earlier of (a) May 8, 2006 or (b) one week following the closing of an equity offering in which the Company raises not less than Twenty-Five Million Dollars ($25,000,000) (the
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"Maturity Date ") a revolving line of credit (the "Credit Line") for Borrower in the principal amount of Six Hundred Thousand Dollars ($600,000.00) (the "Credit Limit"). In connection herewith, Borrower shall execute and deliver to Lender a secured promissory note (the “Secured Promissory Note”) in replacement of the Original Note and in the amount of the Credit Limit and in form and content satisfactory to Lender. The Security Agreement, dated as of July 1, 2004, by and between the parties shall continue to apply to the terms and condition of this Agreement, and shall secure the obligations of the Borrower pursuant hereto and the Secured Promissory Note. All sums advanced on the Credit Line or pursuant to the terms of this Agreement (each an "Advance") shall become part of the principal of said Secured Promissory Note.
2. ADVANCES. Any request for an Advance may be made from time to time and in such amounts as Borrower may choose; provided, however, any requested Advance will not, when added to the outstanding principal balance of all previous Advances, exceed the Credit Limit. Requests for Advances may be made orally or in writing by such officer of Borrower authorized by it to request such Advances. Until such time as Lender may be notified otherwise, Borrower hereby authorizes its president to request Advances. Lender may deposit or credit the amount of any requested Advance to Borrower's checking account with Lender. In Lender’s sole discretion, Lender may refuse to make any requested Advance for any reason or no reason at all. The funds from the Advances will be used by the Borrower for operating expenses in connection with the operations of the Borrower.
3. INTEREST. All sums advanced pursuant to this Agreement shall bear interest from the date each Advance is made until paid in full at the rate of six percent (6%) per annum, simple interest (the "Effective Rate"). The entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the Maturity Date. All payments shall be made to Lender at such place as Lender may, from time to time, designate. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal. Borrower may prepay principal at any time without penalty.
4. SHARES AND WARRANTS. In consideration of Lender’s extending the Credit Line to Borrower, Borrower agrees to issue to Lender four shares of Lender’s common stock (the “Shares”) and four warrants (the “Warrants,” each such warrant a “Warrant”) for every One Dollar ($1.00) loaned to Borrower in Advances. Each Warrant shall enable the Borrower to purchase one share of Lender’s common stock for an exercise price of twenty-five cents ($0.25) for three (3) years. The Shares and Warrants owed to Borrower for any particular Advance shall be issued in the names of Xxxxxx and/or Seymour, in accordance to Borrower’s instructions, within ten (10) days of the Advance. Lender agrees that the Shares and Warrants shall be “restricted securities” as defined by SEC Rule 144; however, Borrower agrees to register for sale the Shares and the shares of common stock underlying the Warrants on any registration statement that Borrower files during the next ten (10) years with the Securities and Exchange Commission, except for any registration statement filed on Form S-8.
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5. REPRESENTATIONS AND WARRANTIES. In order to induce Lender to enter into this Agreement and to make the advances provided for herein, Borrower represents and warrants to Lender as follows:
| (a) |
Borrower is a duly organized, validly existing, and in good standing under the laws of the State of Delaware with the power to own its assets and to transact business in Arizona, and in such other states where its business is conducted. | |
| (b) |
Borrower has the authority and power to execute and deliver any document required hereunder and to perform any condition or obligation imposed under the terms of such documents. | |
| (c) |
The execution, delivery and performance of this Agreement and each document incident hereto will not violate any provision of any applicable law, regulation, order, judgment, decree, article of incorporation, by-law, indenture, contract, agreement, or other undertaking to which Borrower is a party, or which purports to be binding on Borrower or its assets and will not result in the creation or imposition of a lien on any of its assets. | |
| (d) |
Except as disclosed to Borrower, there is no action, suit, investigation, or proceeding pending or, to the knowledge of Borrower, threatened, against or affecting Borrower or any of its assets which, if adversely determined, would have a material adverse affect on the financial condition of Borrower or the operation of its business. |
6. EVENTS OF DEFAULT. An event of default will occur if any of the following events occurs:
| (a) |
Failure to pay any principal or interest hereunder within ten (10) days after the same becomes due. | |
| (b) |
Any representation or warranty made by Borrower in this Agreement or in connection with any borrowing or request for an Advance hereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made. | |
| (c) |
Default by Borrower in the observance or performance of any other covenant or agreement contained in this Agreement, other than a default constituting a separate and distinct event of default under this Paragraph 6. | |
| (d) |
Filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief |
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under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing. | ||
| (e) |
Filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged. | |
| (f) |
Any material breach by Borrower of the terms of the Secured Promissory Note or the Security Agreement. |
7. REMEDIES. Upon the occurrence of an event of default as defined above, Lender may declare the entire unpaid principal balance, together with accrued interest thereon, to be immediately due and payable without presentment, demand, protest, or other notice of any kind. Lender may suspend or terminate any obligation it may have hereunder to make additional Advances. To the extent permitted by law, Borrower waives any rights to presentment, demand, protest, or notice of any kind in connection with this Agreement. No failure or delay on the part of Lender in exercising any right, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity. Borrower agrees to pay all costs of collection incurred by reason of the default, including court costs and reasonable attorney's fees.
8. NOTICE. Any written notice will be deemed effective on the date such notice is placed, first class, postage prepaid, in the United States mail, addressed to the party to which notice is being given as follows:
| Lender: | Xxxxxx X. Xxxxxx |
| 000 Xxxxx Xxxxx Xxxxxxx, #000 | |
| Xxxxxx Xxxxx, XX 00000 | |
| Xxxxxxx Xxxxxxx | |
| 0000 Xxxx Xxxxxx Xxxx | |
| Xxxxxxxxx Md. 21204 | |
| Borrower: | Nord Resources Corporation |
| Attn.: Xxxxxx X. Xxxxxxxx, President | |
| 0000 Xxxxx Xxxx Xxxx | |
| Xxxxxxx, XX 00000 |
9. GENERAL PROVISIONS. All representations and warranties made in this Agreement and the Secured Promissory Note and in any certificate delivered pursuant thereto shall survive the execution and delivery of this Agreement and the making of any loans hereunder. This Agreement will be binding upon and inure to the benefit of
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Borrower and Lender, their respective successors and assigns, except that Borrower may not assign or transfer its rights or delegate its duties hereunder without the prior written consent of Lender. This Agreement, the Secured Promissory Note, and all documents and instruments associated herewith will be governed by and construed and interpreted in accordance with the laws of the State of California. Time is of the essence hereof. This Agreement will be deemed to express, embody, and supersede any previous understanding, agreements, or commitments, whether written or oral, between the parties with respect to the general subject matter hereof. This Agreement may not be amended or modified except in writing signed by the parties.
EXECUTED on the day and year first written above.
| The Borrower: | NORD RESOURCES CORPORATION, | |
| A Delaware corporation | ||
| /s/Xxxxxx X. Xxxxxxxx | ||
| By: Xxxxxx X. Xxxxxxxx | ||
| Its: President | ||
| The Lender: | ||
| /s/ Xxxxxx X. Xxxxxx | ||
| Xxxxxx X. Xxxxxx, an individual | ||
| /s/ Xxxxxxx Xxxxxxx | ||
| Xxxxxxx Xxxxxxx, an individual |
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THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY XXXXXX X. XXXXXX AND XXXXXXX X. XXXXXXX IN FAVOR OF NEDBANK LIMITED, DATED AS OF NOVEMBER 8, 2005.
SECURED PROMISSORY NOTE
$600,000.00
Laguna Beach, CA
June 21, 2005
This Secured Promissory Note (the "Note") is made and executed as of the date referred to above, by and between Nord Resources Corporation, a Delaware corporation (the "Borrower”), and Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxxxx(collectively, "Lender"). By this Note, the Borrower promises and agrees to pay to the order of Lender the principal sum of Six Hundred Thousand Dollars ($600,000.00), or the aggregate unpaid principal amount of all advances made by Lender to Borrower pursuant to the terms of an Amended and Restated Revolving Line of Credit Agreement (the "Loan Agreement ") and a Security Agreement (the “Security Agreement”), of even date herewith, whichever is less, together with interest thereon from the date each advance is made until paid in full, both before and after judgment, at the rate of six percent (6%) per annum, simple interest.
The entire unpaid principal balance, together with any accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the earlier of (a) May 8, 2006 or (b) one week following the closing of an equity offering in which the Company raises not less than Twenty-Five Million Dollars ($25,000,000) (the "Maturity Date ").
Prepayment in whole or part may occur at any time hereunder without penalty; provided that the Lender shall be provided with not less than ten (10) days notice of the Borrower's intent to prepay; and provided further that any such partial prepayment shall not operate to postpone or suspend the obligation to make, and shall not have the effect of altering the time for payment of the remaining balance of the Note as provided for above, unless and until the entire obligation is paid in full. All payments received hereunder shall be applied, first, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; second, to accrued interest; and third, to principal.
An event of default will occur if any of the following events occurs: a) failure to pay any principal or interest hereunder within ten (10) days after the same becomes due; (b) if any representation or warranty made by Borrower in the Loan Agreement or in connection with any borrowing or request for an advance thereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made; (c) default by Borrower in the observance or performance of any other covenant or agreement contained in the Loan Agreement or Security Agreement, (d) filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing; or (e) filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.
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Any notice or demand to be given to the parties hereunder shall be deemed to have been given to and received by them and shall be effective when personally delivered or when deposited in the U.S. mail, certified or registered mail, return receipt requested, postage prepaid, and addressed to the party at his or its last known address, or at such other address as the one of the parties may hereafter designate in writing to the other party.
The Borrower hereof waives presentment for payment, protest, demand, notice of protest, notice of dishonor, and notice of nonpayment, and expressly agrees that this Note, or any payment hereunder, may be extended from time to time by the Lender without in any way affecting its liability hereunder.
In the event any payment under this Note is not made at the time and in the manner required, the Borrower agrees to pay any and all costs and expenses which may be incurred by the Lender hereof in connection with the enforcement of any of its rights under this Note or under any such other instrument, including court costs and reasonable attorneys' fees.
This Note shall be governed by and construed and enforced in accordance with the laws of California.
The Borrower:
NORD RESOURCES CORPORATION,
A Delaware corporation
| /s/ Xxxxxx X. Xxxxxxxx | |
| By: Xxxxxx X. Xxxxxxxx | |
| Its: President | |
| The Lender: | |
| /s/ Xxxxxx X. Xxxxxx | |
| Xxxxxx X. Xxxxxx, an individual | |
| /s/ Xxxxxxx Xxxxxxx | |
| Xxxxxxx Xxxxxxx, an individual |
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