EXHIBIT 10.3
PRIVATE CREDIT AGREEMENT
DATED AS OF JANUARY 29, 2001
AMONG
ACCELACORP 1, INC.
AS BORROWER
-----------
AND
BRIGHTON STREET ADVISORY, L.L.C.
AS LENDER
---------
EXHIBIT 10.3
PRIVATE CREDIT AGREEMENT
Dated as of January 29, 2001
ACCELACORP 1, INC., a California corporation (the "Borrower") and BRIGHTON
STREET ADVISORY, L.L.C., a California limited liability company (the "Lender")
agree as follows:
ARTICLE I
DEFINITION AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement,
---------------------
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Advance" means an advance by Lender to Borrower pursuant to Section 2.02
-------
of this Agreement.
"Applicable Interest Rate" means, for any Interest Period or any other
------------------------
period, a fluctuating interest rate per annum as shall be in effect from time to
time which rate per annum shall at all times be equal to the higher of: (a) ten
percent (10%) per annum; or (b) five percent (5%) over the San Francisco Federal
Reserve Bank's rate for advances made to member banks under Section 13 or 13a of
the Federal Reserve Act prevailing on the twenty-fifth day of the month prior to
the date of the Advance.
"Applicable Interest Rate Advance" means an Advance which bears interest as
--------------------------------
provided in Section 2.04 of this Agreement.
"Borrowing" means a borrowing consisting of Advances made by Lender.
---------
"Business Day" means a day of the year on which banks are not required or
------------
authorized to close in New York City or Los Angeles.
"Change In Control" shall be deemed to have occurred if (a) any "person" or
-----------------
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of Borrower or its principal stockholders as of the date of this
Agreement is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of more than 33-1/3 percent of the
then outstanding voting stock of Borrower; or (b) at any time during any period
of three consecutive years (not including any period prior to the Effective
Date), individuals who at the beginning of such period constitute the board of
directors of Borrower ("Board")(and any new director whose election by the Board
or whose nomination for election by Borrower's stockholders was approved by a
vote of at least two-thirds of the members of the Board then still in office who
either were Board members at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority thereof; or (c) the stockholders of Borrower approve a
merger or consolidation which would result in the voting securities of Borrower
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of Borrower or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders approve a plan of complete
liquidation of Borrower or an agreement for the sale or disposition by Borrower
of all or substantially all of its assets.
"Contingent Obligation", as applied to any Person, means any direct or
---------------------
indirect liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of another.
"Debt" means (i) indebtedness for borrowed money, (ii) obligations
----
evidenced by bonds, debentures, notes or similar instruments, (iii) obligations
as lessee under leases which shall have been or should be, in accordance with
GAAP, recorded as capital leases and (iv) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(i) through(iii) above.
"Effective Date" means the date on which all conditions to the
--------------
effectiveness of this Agreement set forth in Section 4.01 are satisfied.
"Events of Default" has the meaning specified in Section 7.01.
-----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"GAAP" means generally accepted accounting principles set forth in the
----
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
---------------------
from time to time.
"Interest Period" means, for each Advance comprising part of the same
---------------
Borrowing, the period commencing on the date of such Advance and ending 90 days
after the date of such Advance; provided, however, that whenever the last day of
-------- -------
any Interest Period would otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day.
"Investment", as applied to any Person, means any direct or indirect
----------
purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities of any other Person, or any direct or indirect loan,
advance or capital contribution by that Person to any other Person.
"Lender" means Brighton Street Advisory, L.L.C., a California limited
------
liability company.
"Lien" means any lien, mortgage, pledge, security interest, charge or
----
encumbrance of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give any
security interest).
"Loan Documents" means this Agreement and the Notes.
--------------
2
"Net Income" means, for any period, the net income (or loss) of the
----------
Borrower determined in conformity with GAAP.
"Note" means a promissory note of the Borrower payable to the order of
----
Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate
indebtedness of the Borrower to Lender resulting form the Advances made by
Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02.
-------------------
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof.
"Tangible Net Worth" means, as at any date of determination, the sum of the
------------------
capital stock and additional paid-in capital plus retained earnings (or minus
accumulated deficit) minus intangible assets (including without limitation,
patents, patent applications, trademarks, brand names, goodwill and noncompete
covenants or agreements), determined in conformity with GAAP.
"Termination Date" means December 31, 2002 or (ii) the date upon which a
----------------
Change in Control occurs.
"Total Liabilities" means, as at any date of determination, the aggregate
-----------------
amount of all items of indebtedness, obligations or liabilities which, in
conformity with GAAP, would be included in determining total liabilities as
shown on the liability side of a balance sheet of Borrower.
"Total Liabilities/Net Worth Ratio" means the ratio of Total Liabilities to
Tangible Net Worth calculated pursuant to Section 6.01(e).
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in
---------------------------
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
----------------
specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the financial statements
referred to in Section 5.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. Lender agrees, on the terms and
------------
conditions hereinafter set forth, to make Advances to Borrower from time to time
on any Business Day during the period from the date hereof until the Termination
Date in an aggregate amount not to exceed at any time outstanding the sum of
Fifteen Thousand Dollars ($15,000). Each Borrowing of an Applicable Interest
Rate Advance shall be in an aggregate amount of not less than $1,000.00 and in
integral multiples of $1,000.00 in excess thereof. Within the limit on Advances
set forth in this Section 2.01, Borrower may borrow, repay pursuant to Section
2.03 and re-borrow under this Section 2.01.
3
SECTION 2.02. MAKING THE ADVANCES. (a) Each Borrowing shall be
-------------------
made on notice, given not later than 11:00 A.M. (Los Angeles time) on the second
Business Day prior to the date of the proposed Borrowing, by Borrower to Lender.
Each such notice of a Borrowing (a "Notice of Borrowing") shall be by facsimile
or electronic mail, confirmed immediately in writing, in substantially the form
of Exhibit B hereto, specifying therein (i) the requested date of such Borrowing
and (ii) the requested aggregate amount of such Borrowing. Lender shall, before
1:00 P.M. (Los Angeles time) on the date of such Borrowing, make available for
the account of Borrower at its address referred to in Section 8.02, in same day
funds, the requested Borrowing.
(b) Each Notice of Borrowing shall be irrevocable and binding on Borrower.
SECTION 2.03. REPAYMENT. Borrower shall repay the principal
---------
amount of all Advances owing to Lender on or before December 31, 2002.
SECTION 2.04. INTEREST. Borrower shall pay interest on the unpaid
--------
principal amount of each Advance owing to Lender from the date of such Advance
until such principal amount shall be paid in full, at the Applicable Interest
Rate.
ARTICLE III
ADDITIONAL TERMS AND PROVISIONS APPLICABLE
TO THE ADVANCES
SECTION 3.01. PAYMENTS AND COMPUTATIONS. (a) Borrower shall make
-------------------------
each payment hereunder and under the Notes not later than 11:00 A.M. (Los
Angeles time) on the day when due in U.S. dollars to Lender at its address
referred to in Section 8.02 in same day funds.
(b) All computations of interest based on the Applicable Interest Rate
shall be made by Lender on the basis of a year of 365 or 366 days, as the case
may be. Each determination by Lender of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.
4
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. CONDITIONS PRECEDENT TO EFFECTIVENESS. The
-------------------------------------
effectiveness of this Agreement and the obligation of Lender to made an Advance
hereunder is subject to the condition precedent that Lender shall have received
on or before the date Lender makes Advances hereunder the following, each dated
such date, in form and substance satisfactory to Lender:
(a) The Notes to the order of Lender and with other appropriate
insertions.
(b) Certified copies of the Articles of Incorporation of Borrower,
together with a good standing certificate from the Secretary of State of its
jurisdiction of incorporation, each to be dated a recent date prior to the
Effective Date.
(c) Certified copies of the Bylaws of Borrower, certified by its
corporate secretary or an assistant secretary.
(d) Certified copies of the resolutions of the Board of Directors of
Borrower approving this Agreement and the Notes, and of all documents evidencing
other necessary corporate action and government approvals, if any, with respect
to this Agreement and the Notes;.
(e) A certificate of the corporate secretary or an assistant secretary
of Borrower certifying the names and true signatures of the officers authorized
to sign, with respect to Borrower, this Agreement and the Notes and the other
documents to be delivered hereunder.
(f) A copy of this Agreement executed by Borrower and Lender.
(g) An officer's certificate dated as of the Effective Date and
delivered by the Chairman of the Board, the President or any Vice President of
Borrower certifying that (i) Borrower has performed all agreements which this
Agreement provides shall be performed by it on or before the Effective Date,
(ii) the representations and warranties contained in this Agreement are true,
correct and complete and (iii) no event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Agreement
that would constitute an Event of Default.
(h) Such other document as Lender shall reasonably request.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH BORROWING. The
--------------------------------------
obligation of Lender to make an Advance on the occasion of each Borrowing
(including a Borrowing on the Effective Date) shall be subject to the further
conditions precedent that on the date of such Borrowing (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing and the acceptance by Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty by Borrower that on the date of such
borrowing such statements are true):
(i) The representations and warranties contained in Section 5.01 of
this Agreement are correct on and as of the date of such Borrowing, before and
after giving effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
5
(ii) No event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, which constitutes
an Event of Default or which would constitute an Event of Default but for the
requirement that notice be given or time elapse or both;
and (b) Lender shall have received such other approvals, opinions or documents
as it reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF BORROWER.
------------------------------------------
Borrower represents and warrants as follows:
(a) Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of California.
(b) The execution, delivery and performance by Borrower of this
Agreement and the Notes are within Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene (i)
Borrower's charter or bylaws or (ii) any law or any contractual restriction
binding on or affecting Borrower.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by Borrower of this Agreement or the
Notes.
(d) This Agreement is, and each of the Notes when delivered hereunder
will be, the legal valid and binding obligation of Borrower enforceable against
Borrower in accordance with their respective terms.
(e) The balance sheet of Borrower as at December 31, 2000, and the
related statements of income and retained earnings (or accumulated deficit) of
Borrower for the fiscal year then ended, copies of which have been furnished to
Lender, fairly present the financial condition of Borrower as at such date and
the results of operations of Borrower for the period ended on such date, all in
accordance with GAAP consistently applied, and since December 31, 2000 there
have been no material adverse changes in the financial condition, prospects or
operations of Borrower.
(f) There is no pending or threatened action or proceeding affecting
Borrower before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition, prospects or operations of
Borrower.
(g) No proceeds of any Advance will be used to acquire any equity
security of a class which is registered pursuant to Section 12 of the Exchange
Act.
(h) Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock.
6
(i) Borrower is not engaged in a business which is regulated by the
United States government.
(j) Borrower has good, sufficient and legal title to all the properties
and assets reflected in the most recent balance sheet delivered to Lender except
for assets acquired or disposed of in the ordinary course of business since the
date of such balance sheet. All such properties and assets are free and clear
of Liens, except as permitted hereunder.
(k) All tax returns and reports of Borrower required to be filed have
been timely filed, and all taxes, assessments, fees and other governmental
charges upon Borrower and upon its respective properties, assets, income and
franchises which are due and payable have been paid when due and payable.
Borrower knows of no proposed tax assessment against it that would be material
to the condition (financial or otherwise) of Borrower.
(l) Borrower is not (i) a party to or is subject to any material
agreement or instrument or charter or other internal restriction materially
adversely affecting the business, properties, assets, operations or condition
(financial or otherwise) of Borrower taken as a whole, or (ii) in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any contractual obligation of Borrower, and no condition
exists which, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a material adverse effect on
the business, properties, assets, operations or condition (financial or
otherwise) of Borrower, taken as a whole.
(m) No representation or warranty of Borrower contained in this
Agreement or any other document, certificate or written statement furnished to
Lender by or on behalf of Borrower for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Borrower in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading.
(n) There is no fact known to Borrower which materially adversely
affects the business, operations, property, assets, condition (financial or
otherwise) or prospects of Borrower, taken as a whole, which has not been
disclosed herein or in such other documents, certificates and statements
furnished to Lender for use in connection with the transactions contemplated
hereby.
ARTICLE VI
COVENANTS OF BORROWER
SECTION 6.01. AFFIRMATIVE COVENANTS. So long as any Advance shall
---------------------
remain unpaid, Borrower will:
(a) Compliance With Laws, Etc. Comply, in all material respects with
-------------------------
all applicable laws, rules, regulations and orders, such compliance to include,
without limitation, paying before the same become delinquent, all taxes,
assessments and governmental charges imposed upon it or upon its property except
to the extent contested in good faith.
7
(b) Corporate Existence. Borrower will at all times preserve and keep
-------------------
in full force and effect its corporate existence and rights and franchises
material to its business.
(c) Payment of Taxes and Claims. Borrower will pay all taxes,
---------------------------
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its franchises, business, income or
property before any material penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a material
Lien upon any of its properties or assets, prior to the time when any material
penalty or fine shall be incurred with respect thereto; provided that no such
charge or claim need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor.
(d) Working Capital. Maintain a ratio of current assets to current
---------------
liabilities of Borrower of not less than 1.3 to 1.0. Current liabilities shall
not include the current portion of the indebtedness evidenced by the Notes.
(e) Leverage. Borrower will not permit the Total Liabilities/Net Worth
--------
Ratio at any time to exceed 2.0 to 1.0.
(f) Reporting Requirements. Furnish to Lender:
----------------------
(i) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of Borrower, balance
sheets of Borrower as of the end of such quarter and statements of income and
retained earnings of Borrower for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, certified by the
chief financial officer of Borrower;
(ii) as soon as available and in any event within 90 days after
the end of each fiscal year of Borrower, a copy of the annual report for such
year for Borrower containing financial statements for such year certified by
Lucas, Horsfall, Xxxxxx & Xxxxxxx, LLP or other independent public accountants
acceptable to Lender which report shall be unqualified;
(iii) as soon as possible and in any event within five days after
an officer of Borrower obtains knowledge of each Event of Default and each
event, which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, continuing on the date of such statement, a
statement of the chief financial officer of Borrower setting forth details of
such Event of Default or event and the action which Borrower has taken and
proposes to take with respect thereto;
(iv) promptly after the sending or filing thereof, copies of all
reports and registration statements which Borrower files with the Securities and
Exchange Commission or any national securities exchange; and
(v) such other information respecting the conditions or
operations, financial or otherwise, of Borrower or any of its subsidiaries as
Lender may from time to time reasonably request.
8
SECTION 6.02. NEGATIVE COVENANTS. So long as any Advance shall
------------------
remain unpaid, Borrower will not, without the written consent of Lender:
(a) Liens. Borrower will not, directly or indirectly, create, incur,
-----
assume or permit to exist any Lien on or with respect to any property or asset
(including any document or instrument in respect of goods or accounts
receivable) of Borrower, whether now owned or hereafter acquired, on any income
or profits therefrom.
(b) Investments. Borrower will not, directly or indirectly, make or
-----------
own any Investment except:
(i) Borrower may make and own Investments in (w) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by an agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof, (x) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Corporation or Xxxxx'x Investment
Service, Inc., (y) commercial paper maturing no more than 90 days from the date
of creation thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Corporation or Xxxxx'x Investor
Service, Inc. and (z) certificates of deposit, repurchase agreements or bankers'
acceptances maturing within one year from the date of acquisition thereof issued
by commercial banks organized under the laws of the United States of America or
any state thereof or the District of Columbia, each having combined capital and
surplus of not less than $100,000,000;
(ii) Borrower may acquire or own stock, obligations or securities
received in settlement of debts (created in the ordinary course of business)
owing to Borrower; and
(iii) Borrower may make Investments in connection with
acquisitions, in respect of which Borrower issues its equity securities.
(c) Contingent Obligations. Borrower will not, and will not permit any
----------------------
of its subsidiaries to, directly or indirectly, create or become or be liable
with respect to any Contingent Obligation, except guaranties resulting from
endorsement of negotiable instruments for collection in the ordinary course of
business.
(d) Sale or Discount of Receivables. Borrower will not, directly or
-------------------------------
indirectly, sell with recourse, or discount or otherwise sell for less than the
face value thereof, any of its notes or accounts receivable.
(e) Transactions With Shareholders and Affiliates. Borrower will not,
---------------------------------------------
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity securities of Borrower, or with any affiliate of Borrower or of
any such holder, on terms that are less favorable to Borrower than those which
might be obtained at the time from Persons who are not such a holder or
9
affiliate; provided that the foregoing restriction shall not apply to any
--------
transaction between Borrower and any of its wholly-owned subsidiaries or between
any of its wholly-owned subsidiaries.
(f) Independence of Covenants. All covenants hereunder shall be given
-------------------------
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or event which, with the giving of notice
or lapse of time, or both, would constitute an Event of Default if such action
is taken or condition exists.
(g) Dividends, Etc. Declare or make any dividend payment or other
---------------
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of capital stock of Borrower, or purchase,
redeem or otherwise acquire for value (or permit any of its subsidiaries to do
so) any shares of any class of capital stock of Borrower or any warrants, rights
or options to acquire any such shares, now or hereafter outstanding, except that
Borrower may (i) declare and make any dividend payment or other distribution
payable in common stock of Borrower and (ii) purchase, redeem or otherwise
acquire shares of its common stock or warrants, rights or options to acquire any
such shares with the proceeds received from the substantially concurrent issue
of new shares of its common stock; provided that immediately after giving effect
--------
to such proposed action, no Event of Default or event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default would
exist.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. If any of the following events
-----------------
("Events of Default") shall occur and be continuing:
(a) Borrower shall fail to pay any principal of, or interest on, any
Advance when the same becomes due and payable; or
(b) Any representation or warranty made by Borrower herein or by
Borrower (or any of its officers) in connection with this Agreement shall prove
to have been incorrect in any material respect when made; or
(c) Borrower shall fail to perform or observe (i) any term, covenant or
agreement contained in Sections 6.01 or 6.02, or (ii) any other term, covenant
or agreement contained in this Agreement on its part to be performed or observed
if such failure shall remain unremedied for 10 days after written notice thereof
shall have been given to Borrower by Lender; or
(d) Borrower shall fail to pay or default in any payment of any
principal of or premium or interest on any Debt or in the payment of any
Contingent Obligation (but excluding Debt outstanding hereunder) of Borrower,
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
10
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(e) Borrower shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against Borrower seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property; or Borrower shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Any unvacated or unstayed judgment or order for settlement for the
payment of money in excess of $50,000 shall be rendered against Borrower;
provided that from the date of entry of any such judgment or order, Borrower
shall have ten days to seek a stay of enforcement of such order or judgment by
reason of pending appeal or otherwise;
then, and in any such event, Lender (i) shall, by notice to Borrower, declare
the obligation of Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) by notice to Borrower, declare the Advances,
all interest thereon and all amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by Borrower; provided, however, that in the event of an actual or deemed
-------- -------
entry of an order for relief with respect to Borrower or any of its subsidiaries
under the Federal Bankruptcy Code, (A) the obligation of Lender to make Advances
shall automatically be terminated and (B) the Advances, all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by Borrower.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any provision
----------------
of this Agreement or the Notes, nor consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Lender, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 8.02. NOTICES, ETC. All notices and other communications provided
-------------
for hereunder shall be in writing (including telegraphic, telex or cable
communication) and mailed, telegraphed, telexed, cabled or delivered, if to
Borrower, at its address at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
00
Xxxxxxx, Xxxxxxxxxx 00000, Attention: President, and if to Lender, at its
address at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx,
Attention: CEO; or, to each party, at such other address as shall be designated
by such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telegraphed, telexed or cabled, be effective
when deposited in the mails, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of Lender
-------------------
to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand
-------------------------
all costs and expenses in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes and
other documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for Lender with respect
thereto and with respect to advising Lender as to its rights and
responsibilities under this Agreement, and all costs and expenses, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder. In addition, Borrower shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Agreement, the Notes and the other documents to be delivered
hereunder, and agrees to save Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes.
SECTION 8.05. INDEMNITY. In addition to the payment of costs and expenses
---------
pursuant to Section 8.04 of this Agreement, whether or not the transactions
contemplated hereby shall be consummated, Borrower agrees to indemnify, pay and
hold Lender and any holder of any Notes, and the officers, directors, employees,
agents and affiliates of Lender and such holders (collectively called the
"Indemnitees") harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto), that may be imposed on, incurred by, or asserted
against that Indemnitee, in any manner relating to or arising out of this
Agreement or the other Loan Documents, Lender's agreement to make the Advances
hereunder, or the use or intended use of the proceeds of any
of the Advances hereunder (the "indemnified liabilities"); provided, that
--------
Borrower shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of that Indemnitee. To the extent that the undertaking to indemnify, pay and
12
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or public policy, Borrower shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law, to
the payment and satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
SECTION 8.06. BINDING EFFECT. This Agreement shall become effective
--------------
when it shall have been executed by Borrower and Lender and thereafter shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of Lender.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. Lender may assign to one
------------------------------
or more entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of the Advances
owing to it and the Note or Notes held by it).
SECTION 8.08. GOVERNING LAW. This Agreement and the notes shall be
-------------
governed by, and construed in accordance with, the laws of the State of
California.
SECTION 8.09. EXECUTION IN COUNTERPARTS. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
Borrower
--------
ACCELACORP 1, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Title: President
Lender
------
BRIGHTON STREET ADVISORY, L.L.C.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Title: CEO
13
EXHIBIT A
FORM OF PROMISSORY NOTE
U.S.$ Dated: ,200 .
-------------- -------------------- -
FOR VALUE RECEIVED, the undersigned, ACCELACORP 1, INC., a California
corporation (the "Borrower") HEREBY PROMISES TO PAY to the order of BRIGHTON
STREET ADVISORY, L.L.C., a California limited liability company (the "Lender")
the principal amount of each Advance (as defined below) owing to Lender by
Borrower pursuant to the Credit Agreement (as defined below) on or before
December 31, 2002.
Borrower promises to pay interest on the unpaid principal amount of each
Advance from the date of such Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Lender, at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx, in same day funds. Each Advance owing to Lender by
Borrower and the maturity thereof, and all payments made on account of principal
thereof, shall be recorded by Lender.
This Promissory Note is one of the Notes referred to in, and is entitled to
the benefits of, the Private Credit Agreement dated as of January 29, 2001 (the
"Credit Agreement") among Borrower and Lender. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by Lender
to Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount referenced therein; the indebtedness of
Borrower resulting from each such Advance being evidenced by this Promissory
Note, and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events.
ACCELACORP 1, INC.
By:
------------------------------------
Title:
EXHIBIT B
FORM OF NOTICE OF BORROWING
Brighton Street Advisory, L.L.C.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: CEO
Gentlemen:
The undersigned, ACCELACORP 1, INC. refers to the Private Credit Agreement,
dated as of January 29, 2001 (the "Credit Agreement", the terms defined therein
being used herein as therein defined), and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is , 200 .
----------------- -
(ii) The aggregate amount of the Proposed Borrowing is $ .
------------------
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Section 5.01 of
the Credit Agreement are correct, before and after giving effect
to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds
therefrom, which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
Very truly yours,
ACCELACORP 1, INC.
By:
------------------------------------
Title:
