LOAN AGREEMENT
This Loan Agreement (this "Agreement") is entered into as of the 13th day
of April, 2001, by ULTIMATE HOLDINGS, LTD., a Bermuda limited company (the
"Lender"), and XXXXXXXXXXXXXXXXX.XXX, INC., a Delaware corporation (the
"Borrower").
Recitals
WHEREAS, Borrower would like to borrow up to $15,000,000 from the Lender;
and
WHEREAS, the Lender has agreed from time to time to lend up to $15,000,000
to Borrower on the terms and subject to the conditions set forth herein.
Agreement
In consideration of the promises and of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
Section 1 LOAN.
Section 1.1 Lender Commitment. The Lender agrees, on the terms and
conditions of this Agreement, from time to time to make term loans to Borrower
(a "Loan" or the "Loans") in United States Dollars from the date of this
Agreement and on or before the first anniversary of this Agreement (the
"Commitment Period") in an aggregate amount of up to $15,000,000 (the
"Commitment Amount") by depositing the same, in immediately available funds, in
a depository account of designated by the Borrower.
Section 1.2 The Note. The Loans shall be evidenced by a promissory note
(the "Note") which shall mature, shall bear interest, shall be payable and shall
be otherwise as provided in the form of Note attached hereto as Exhibit A.
Section 1.3 Loans.
(a) Subject to the satisfaction of the conditions set forth in this
Agreement, Borrower may, in its sole discretion, issue and exercise draw downs
on the Note (each a "Draw Down") during the Commitment Period, which Draw Downs
Lender shall be obligated to accept, subject to the terms and conditions herein.
(b) Borrower must inform Lender of its desire for Lender to make a Loan by
delivering a draw down notice in substantially the same form as attached hereto
as Exhibit B (a "Draw Down Notice") setting forth, among other things, the
amount of the Loan requested by Borrower (the "Loan Amount").
(c) Only one Draw Down shall be allowed in each Draw Down Period. The
minimum amount for any Draw Down shall be $100,000 and the maximum amount for
any Draw Down shall be $2,000,000. A "Draw Down Period" shall be defined as a
period of 10 consecutive business days.
Section 1.4 Initial Closing; Closings.
(a) The delivery of executed documents under this Agreement and the other
documents requested herein shall take place at 5:00 p.m. Pacific Time on the
date first set forth above at the offices of Borrower, or at such other place as
the parties may agree (the "Initial Closing").
(b) Each closing of a Loan (a "Closing") shall be held at 12:00 noon,
Pacific Time on the second business day after the date a Draw Down Notice is
received by Lender or such other date and time as the parties hereto may
mutually agree (a "Closing Date").
Section 1.5 General Payment Provisions.
(a) The Borrower will make each payment when due under the Note or this
Agreement not later than 2:00 p.m., Pacific Time, on the date such payment
becomes due and payable, in lawful money of the United States of America,
without set-off, deduction or counterclaim, and in immediately available funds
sent by wire transfer to Lender at the address to be provided by the Lender. Any
payment received by the Lender after such time shall be deemed to have been made
on the next following business day. Should any such payment become due and
payable on a day other than a business day, the maturity of such payment shall
be the next business day. Any amount received by the Lender, whether as an
interest payment, principal payment or principal prepayment from or on behalf of
the Borrower, shall be applied as follows in descending order of priority: (i)
to all previously invoiced costs, fees and expenses of the Lender (including
reasonable attorneys' fees) incurred in connection with this Agreement or in
enforcing any obligations of, or in collecting any payments from, any obligor
hereunder; (ii) to interest which has accrued on past due payments under the
Note; (iii) to interest that is currently due and payable under the Note; (iv)
to payment of principal under the Note currently due and payable; (v) to the
payment of past due principal under the Note; and (vi) to the prepayment of
principal due under the Note.
(b) Other than the distribution of Loans up to the Commitment Amount and
during the Commitment Period pursuant to the terms of this Agreement, which
payment is subject to the terms and conditions hereof, and regardless of whether
the Borrower has repaid such amounts in whole or in part, the Lender will have
no obligation whatsoever to lend, advance or otherwise pay any other monies to
or on behalf of the Borrower.
Section 1.6 Representations and Warranties of the Borrower.
Borrower makes the following representations and warranties to the Lender
as the date hereof, the Closing Date and the date of any subsequent disbursement
of funds.
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(a) Borrower is duly organized, validly existing and in good standing under
the laws of its state of formation and is duly qualified as a foreign
corporation in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification. Borrower has all requisite
power to transact the business it transacts and proposes to transact, to execute
and deliver this Agreement, and all other documents and agreements contemplated
hereby and thereby, and to perform the provisions hereof and thereof and to
consummate the transactions contemplated hereby and thereby.
(b) The execution, delivery and performance of this Agreement and all other
documents and agreements contemplated hereby or thereby to be executed,
delivered and performed by the Borrower, and the consummation of the
transactions contemplated hereby or thereby, have been duly authorized and
approved by the Borrower. This Agreement and all other documents and agreements
contemplated hereby or thereby to be executed and delivered by the Borrower have
been duly authorized, executed and delivered by, and are the valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their terms, except as may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws or by legal or equitable principles relating to
or limiting creditors' rights generally.
(c) No consent, approval or authorization of, or registration, filing or
declaration with, any person or entity is required for the performance by the
Borrower of this Agreement.
Section 1.7 Representations and Warranties of the Lender.
The Lender represents, warrants and covenants to the Borrower as of the
date hereof:
(a) The Lender has all requisite power to execute and deliver this
Agreement and to perform the provisions hereof and thereof and to consummate the
transactions contemplated hereby and thereby.
(b) The execution, delivery and performance of this Agreement and any other
document in connection herewith and the consummation of the transactions
contemplated hereby or thereby, have been duly authorized and approved by the
Lender. This Agreement has been duly authorized, executed and delivered by, and
each is the valid and binding obligation of, the Lender enforceable against the
Lender in accordance with its terms, except as may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws or by
legal or equitable principles relating to or limiting creditors' rights
generally.
Section 2 CONDITIONS TO OBLIGATIONS OF THE LENDER. The obligation of the
Lender to make the Loan on the Closing Date or on the date of any subsequent
disbursement of funds shall be subject to the satisfaction on or before the
Closing Date of the conditions hereinafter set forth:
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Section 2.1 Proceedings Satisfactory. All proceedings taken on or prior to
such date in connection with the Loan and the consummation of the transaction
contemplated hereby and all documents and papers relating thereto shall be
satisfactory in form and substance to the Lender and its counsel.
Section 2.2 Representations True. All representations and warranties of the
Borrower contained herein shall be true and correct in all respects on and as of
such date with the same effect as though such representations and warranties had
been made on and as of such date and the Borrower shall have performed in all
respects all agreements on its part required to be performed under this
Agreement on or prior to such date.
Section 2.3 The Loan Permitted by Applicable Laws. The borrowing by
Borrower and the making of the Loan by Lender (i) shall not be prohibited by any
applicable law or governmental regulation, release, interpretation or opinion,
(ii) shall not subject the Lender to any penalty under or pursuant to any
applicable law or governmental regulation, and (iii) shall be permitted by the
laws and regulations of the jurisdictions to which the Lender is subject.
Section 2.4 Draw Down Notict/Compliance Certificate. Borrower shall have
delivered to Lender a Draw Down Notice in a form acceptable to Lender and in
substantially the same form as Exhibit B, dated as of the Closing Date and
executed by the Chief Executive Officer or Chief Financial Officer of the
Borrower.
Section 3 COVENANTS.
Section 3.1 Covenants of the Borrower. The Borrower covenants and agrees
that:
(a) Use of Proceeds. Borrower agrees that the proceeds of the Loans will be
used for lawful business purposes.
(b) Taxes. The Borrower will pay prior to delinquency all taxes,
assessments and governmental levies that may be imposed upon the Borrower,
except as contested in good faith and by appropriate proceedings.
(c) Compliance with Laws. The Borrower will comply in all respects with all
applicable laws, statutes and regulations of any Governmental Person, a
violation of which would have a material adverse effect on the financial
condition, operations, business, profits, prospects or properties of the
Borrower or the validity or enforceability of this Agreement or any of the
transactions contemplated hereby or thereby.
(d) Payment of the Note. The Borrower will pay the principal of and
interest on the Note on the dates and in the manner provided in the Note and
this Agreement. The obligation of Borrower described in the preceding sentence
is absolute and unconditional, irrespective of any tax or accounting treatment
of such obligation including without limitation any documentary stamp, transfer,
ad valorem or other taxes assessed by any jurisdiction in connection with this
transaction.
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(e) Stay, Extension and Usury Laws. The Borrower agrees (to the extent it
may lawfully do so) that it will not at any time insist upon, plead or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Borrower from paying all or a portion of the principal of, or interest on, the
Note as contemplated herein, wherever enacted, now or at any time hereinafter in
force, or that may materially affect the covenants or the performance of this
Agreement in any manner inconsistent with the provisions of this Agreement. The
Borrower expressly waives all benefit or advantage of any such law. If a court
of competent jurisdiction prescribes that the Borrower may not waive its rights
to take the benefit or advantage of any stay or extension law or any usury law
or other law in accordance with the prior sentence, then the obligation to pay
interest on the Note will be reduced to the maximum legal limit under applicable
law governing the interest payable in connection with such Note, and any amount
of interest paid by the Borrower that is deemed illegal shall be deemed to have
been a prepayment of principal on the Note.
Section 4. EVENTS OF DEFAULT; REMEDIES
Section 4.1 Events of Default Defined; Acceleration of Maturity. If any of
the following events ("Events of Default") shall occur and be continuing (for
any reason whatsoever and whether it shall be voluntary or involuntary or by
operation of law or otherwise):
(a) Default shall be made in the payment of the principal of, or interest
on, the Note when and as the same shall become due and payable, whether at
stated maturity, by acceleration, upon demand, upon a mandatory prepayment due
date, or otherwise and such default shall have continued for a period of five
(5) days after written notice to Borrower;
(b) Default shall be made in the performance or observance of any covenant,
agreement or condition contained herein or the Note, or in any other document
issued in connection therewith, and such default shall have continued for a
period of ten (10) days after written notice to Borrower;
(c) The Borrower shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property and assets, (ii) be
generally unable to pay its debts as such debts become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a voluntary case
under the United States Bankruptcy Code or similar law or regulation (as now or
hereafter in effect), (v) file a petition seeking to take advantage of any other
law providing for the relief of debtors, (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under such Bankruptcy Code or other law or regulation, (vii)
dissolve, (viii) take any corporate action under any applicable law analogous to
any of the foregoing, or (ix) take any corporate action for the purpose of
effecting any of the foregoing;
(d) A proceeding or case shall be commenced, without the application or
consent of the Borrower in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, dissolution, winding up or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or for all or any substantial part of
its assets, or (iii) similar relief in respect of the Borrower, under any law
providing for the relief of debtors, and such proceeding or case shall continue
undismissed, or unstayed and in effect, for a period of sixty (60) days; or an
order for relief shall be entered in an involuntary case under the United States
Bankruptcy Code or other similar law or regulation, against the Borrower; or
action under the laws of any jurisdiction affecting the Borrower analogous to
any of the foregoing shall be taken with respect to the Borrower and shall
continue unstayed and in effect for any period of sixty (60) days;
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(e) Final judgment for the payment of money shall be rendered by a court of
competent jurisdiction against the Borrower and the Borrower shall not discharge
the same or provide for its discharge in accordance with its terms, or procure a
stay of execution thereof within thirty (30) days from the date of entry thereof
and within said period of thirty (30) days, or such longer period during which
execution of such judgment shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal, and such judgment
together with all other such judgments shall exceed in the aggregate US$200,000;
or
(f) Any representation or warranty made by the Borrower in this Agreement,
or in any instrument delivered hereunder or pursuant hereto or in connection
with any provision hereof shall be false or incorrect in any material respect as
of the date on which it was made or is deemed to have been made;
then (x) upon the occurrence of any Event of Default described in subsection (c)
or (d) the Lender shall provide notice to Borrower of the Event of Default, and
if such Event of Default shall not be cured by Borrower within 10 days, the
unpaid principal amount of the Note, together with the interest accrued thereon
and all other amounts payable by the Borrower hereunder, shall automatically
become immediately due and payable, without presentment, demand, protest or
other requirements of any kind, all of which are hereby expressly waived by the
Borrower or (y) upon the occurrence of any other Event of Default, the Lender
may, by notice to the Borrower, declare the unpaid principal amount of the Note
to be, and the same shall forthwith become, due and payable, together with the
interest accrued thereon and all other amounts payable by the Borrower
hereunder.
Section 4.2 Suits for Enforcement. If any Event of Default shall have
occurred and be continuing after the applicable cure period, the Lender may
proceed to protect and enforce its rights against the Borrower, either by suit
in equity or by action at law, or both, whether for the specific performance of
any covenant or agreement contained in this Agreement or in aid of the exercise
of any power granted in this Agreement, or, the Lender may proceed to enforce
the payment by the Borrower of all sums due upon the Note or to enforce any
other legal or equitable right of the Lender.
The Borrower covenants that, if it shall default in the making of any
payment due under the Note or in the performance or observance of any agreement
contained in this Agreement, it will pay to the Lender such further amounts, to
the extent lawful, to cover any reasonable costs and expenses of collection or
of otherwise enforcing their respective rights, including without limitation the
reasonable counsel fees and costs and expenses incurred in connection with such
collection. The obligations set forth in this paragraph will survive the payment
in full of the Note.
Section 4.3 Remedies Cumulative. No remedy herein conferred upon the Lender
is intended to be exclusive of any other remedy and each and every such remedy
will be cumulative and will be in addition to every other remedy given hereunder
or now or hereafter existing at law or in equity or by statute or otherwise.
Section 4.4 Remedies Not Waived. No course of dealing between the Borrower
and any other person and no delay or failure in exercising any rights hereunder
or under the Note in respect thereof shall operate as a waiver of any rights of
the Lender.
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Section 5 TAXES.
The Borrower will pay all taxes (including interest and penalties), other
than taxes imposed on the income of the Lender which may be payable in respect
of the execution and delivery of this Agreement or of the execution and delivery
of (but not the subsequent transfer of or interest or principal payable under)
the Note or of any amendment of, or waiver or consent under or with respect to,
this Agreement or of the Note and will save the Lender and all subsequent
holders of the Note harmless against any loss or liability resulting from
nonpayment or delay in payment of any such tax.
Section 6 MISCELLANEOUS.
Section 6.1 Indemnification. The Borrower agrees to indemnify, defend and
hold harmless the Lender, and its successors, assigns, heirs, subsidiaries,
affiliates and all of the officers, directors, employees, partners and agents
(including attorneys and accountants) of each of the aforementioned persons or
entities, and each of them, from and against any and all losses, claims,
damages, liabilities, expenses, demands, causes of action, suits, debts,
obligations, rights, promises, acts, agreements and damages of any kind or
nature whatsoever, whether at law or in equity, whether known or unknown,
foreseen or unforeseen, heretofore or hereafter arising out of, relating to,
connected with or incidental to the failure of any representation or warranty
made by the or the failure of the Borrower to comply in all material respects
with the covenants contained in this Agreement or agreements contemplated hereby
or thereby.
Section 6.2 Reliance on and Survival of Representations. All
representations, warranties, covenants and agreements of the Borrower herein
will be deemed to be material and to have been relied upon by the Lender at the
Initial Closing and upon each successive Closing as if made on the date thereon,
and will survive the execution and delivery of this Agreement and of the Note.
Section 6.3 Successors and Assigns. This Agreement will bind and inure to
the benefit of and be enforceable by the Borrower, the Lender and each of their
respective successors and assigns. The Lender shall be permitted to transfer the
Note in accordance with its terms and the terms of this Agreement and in
accordance with applicable restrictions under applicable federal and state
securities laws.
Section 6.4 Notices. All notices and other communications provided for in
this Agreement shall be in writing and delivered by registered or certified
mail, postage prepaid, or delivered by overnight courier (for next Business Day
delivery) or telecopied, addressed as follows, or at such other address as any
of the parties hereto may hereafter designate by notice to the other parties
given in accordance with this Section 6.5:
1) if to the Borrower:
XxxxxxxXxxxxxxxxx.xxx, Inc.
0000 Xxxxxxxxx Xxxx., 0xx Xxxxx
Xxx Xxxx, Xxxxxxxxxx
Attn: Ramy El-Batrawi
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy of any notice to:
Nida & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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2) if to the Lender:
Ultimate Holdings, Ltd.
13 Parliament St.
Xxxxxxxx, XX 12
Bermuda
Attn: Xxxxxxxx Xxxxxxxx
Telephone:
Telecopier: (000) 000 0000
With a copy of any notice to:
======================
---------------------
----------------------
Telephone:
Telecopier:
Any such notice or communication shall be deemed to have been duly given on the
fifth (5th) day after being so mailed, the next business day after delivery by
overnight courier, when received when sent by telecopy or upon receipt when
delivered personally.
Section 6.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures may be
exchanged by telecopy, with original signatures to follow. Each of the parties
hereto agrees that it will be bound by its own telecopied signature and that it
accepts the telecopied signatures of the other parties to this Agreement. The
original signature pages shall be forwarded to the Borrower or its counsel and
the Borrower or its counsel will provide all of the parties hereto with a copy
of the entire Agreement.
Section 6.7 Amendments. This Agreement may only be amended by a writing
duly executed by all of the parties hereto.
Section 6.8 Severability. If any term or provision of this Agreement or any
other document executed in connection herewith shall be determined to be illegal
or unenforceable, all other terms and provisions hereof and thereof shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.
Section 6.9 Governing Law. EXCEPT TO THE EXTENT THAT THE LAW OF ANOTHER
JURISDICTION IS EXPRESSLY SELECTED IN A DOCUMENT, THIS AGREEMENT, THE NOTES AND
ALL AMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO OR THERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
Section 6.10 Applicable Venue. The venue for any suit brought hereon shall
be the County of Los Angeles, California, the parties hereto hereby waiving any
claim or defense that such forum is not convenient or proper. Each party agrees
that any such court shall have in personal jurisdiction over it and consents to
service of process in any manner authorized by Illinois law.
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Section 6.11 Entire Agreement. This Agreement, the Note, and any other
instrument delivered with respect thereto contain the entire agreement of the
parties hereto with respect to the transactions contemplated hereby and thereby
and supersede all previous oral and written, and all previous contemporaneous
oral negotiations, commitments and understandings.
Section 6.12 Further Assurances. Each party agrees promptly to execute and
deliver such documents and to take such other acts as are reasonably necessary
to effectuate the purposes of this Agreement.
Section 6.13 Headings. The headings contained herein are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 6.14 Waiver of Jury Trial. EACH PARTY HEREBY AGREES TO WAIVE ITS
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT, THE NOTE OR ANY OTHER BASIC DOCUMENTS OR AGREEMENTS RELATING
TO THE NOTE OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT, THE NOTE OR ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE NOTE.
Section 6.15 Assignments. The Borrower may not assign its rights or
obligations hereunder or under the Note without the prior written consent of the
Lender.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the
date first set forth above.
LENDER: ULTIMATE HOLDINGS, LTD.,
a Bermuda limited company
By:____________________________
Name: ___________________
Title: ____________________
BORROWER: XXXXXXXXXXXXXXXXX.XXX, INC.,
a Delaware corporation
By:____________________________
Name: ___________________
Title: ____________________
