EXHIBIT 10.2
TERM CREDIT AGREEMENT
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THIS TERM CREDIT AGREEMENT (this "Agreement") is made and entered into as
of March 29, 2004, by and among WORLDWATER CORP., a Delaware corporation
("Borrower"), HONG KONG LEAGUE CENTRAL CREDIT UNION, in its capacity as a lender
hereunder ("Hong Kong League"), HIT CREDIT UNION, in its capacity as a lender
hereunder ("HIT"), (HIT and Hong Kong League shall be collectively referred to
as "Lenders"), and SBI ADVISORS, LLC, a California limited liability company, in
its capacity as agent for Lenders ("Agent"), with reference to the following:
WITNESSETH:
WHEREAS, Lenders desire to make a Term Loan to Borrower, and Borrower
desires to borrow from Lenders the amount of such Term Loan, subject to and in
accordance with the terms and conditions set forth herein, and in the Notes; and
WHEREAS, Lenders desire to appoint Agent, and Agent desires to accept such
appointment, to act as agent for and on behalf of Lenders, with respect to the
Term Loan, for the purposes described herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the delivery,
receipt, and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Certain Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, twenty percent (20%) or more of the capital stock
or other Equity Interests having ordinary voting power in the election of
directors, managers or other Persons having the ability to manage the affairs of
that Person, (b) each Person that controls, is controlled by or is under common
control with that Person, (c) each of that Person's officers, directors,
members, managers, joint venturers and partners and (d) in the case of the
Borrower, the immediate family members, spouses and lineal descendants of
individuals who are otherwise Affiliates of the Borrower. For purposes of this
definition, "control" of a Person means the possession, directly or indirectly,
of the power to direct or cause the direction of its management or policies,
whether through the ownership of voting securities, by contract or otherwise.
"Business Day" means a day (a) other than Saturday or Sunday, and (b) on
which commercial banks are open for business in New York, New York, and Los
Angeles, California.
"Closing Date" means the date each of the conditions precedent set forth
in Section 5 hereof is fully satisfied.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.
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"Event of Default" has the meaning set forth in Section 7.
"Interest Rate" has the meaning set forth in Section 2(c).
"Lien" means any mortgage, deed of trust, pledge, security interest,
assignment, deposit arrangement, charge or encumbrance, lien (statutory or
other), or other preferential arrangement (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing or any agreement to give any
security interest).
"Maturity Date" has the meaning set forth in Section 2(b).
"Notes" has the meaning set forth in Section 2(d).
"Person" means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or any other
juridical entity.
"Permitted Lien" means those Liens disclosed on Schedule I attached
hereto.
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"Restricted Payment" means (a) the declaration or payment of any dividend
or the incurrence of any liability to make any other payment or distribution of
cash or other property or assets in respect of a Person's Equity Interests, (b)
any payment on account of the purchase, redemption, defeasance, sinking fund or
other retirement of a Person's Equity Interests or any other payment or
distribution made in respect thereof, either directly or indirectly, (c) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Equity Interests of such Person now or hereafter outstanding, (d) any payment of
a claim for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any such Person's Equity Interests or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (e) any payment, loan,
contribution, or other transfer of funds or other property to any stockholder of
such Person other than payment of compensation in the ordinary course of
business to stockholders who are employees of such Person; and (f) any payment
of management fees (or other fees of a similar nature) by such Person to any
stockholder of such Person or their Affiliates.
"SBIB Term Sheet" means the proposed Term Sheet attached as Schedule II
between Borrower and SBI Brightline VIII LLC.
"Term Loan" has the meaning set forth in Section 2(a).
2. Amount and Terms of the Term Loan.
(a) Term Loan Advance. Subject to the terms and conditions of this
Agreement, each Lender hereby, severally and not jointly, agrees to make a loan
to Borrower (the "Term Loan") on the Closing Date in the aggregate amount of
Eight Hundred Thousand Dollars (U.S.$800,000), which amount may be repaid at any
time prior to the Maturity Date without premium or penalty, but may not be
reborrowed once repaid.
(b) Repayment. The Term Loan shall be repaid as follows: Four Hundred
Thousand ($400,000) of the principal amount (the "Initial Amortization Amount")
will be due and payable within three days after receipt by Borrower of the
proceeds from the $0.17 Tranche, as such term is defined in the SBIB Term Sheet;
and all remaining unpaid principal of and accrued interest on the Term Loan
(including, but not limited to the Initial Amortization Amount if not
theretofore made) shall, be payable on the earliest of (the "Maturity Date"),
(i) the date six months from the Closing Date, (ii) the effective date under the
Securities Act of 1933, as amended, of the registration statement referred to in
the SBIB Term Sheet and (iii) a default or event of default by Borrower of any
of the agreements evidencing the transaction contemplated in the SBIB Term
Sheet.
(c) Interest Rate and Interest Payments. Borrower shall pay interest on
the unpaid principal amount of the Term Loan from the Closing Date until the
Maturity Date, at a rate equal to eighteen percent (18%) per annum (the
"Interest Rate") calculated on the basis of a 360 day year. Subject to Section
2(e) and 2(g) below, interest on the outstanding principal amount of the Term
Loan shall be due and payable to Agent, for the ratable benefit of Lenders, in
advance (i) on the Closing Date and, (ii) thereafter, on the last Business Day
of each calendar month, commencing on the first of such dates following the
Closing Date until the Maturity Date, at which time all accrued but unpaid
interest shall be due and payable.
(d) Promissory Notes. The Term Loan shall be evidenced by two promissory
notes (collectively, the "Notes") in the forms of Exhibit "A-1" and Exhibit
"A-2" attached hereto, duly executed and delivered to Agent by Borrower.
(e) Interest on Event of Default. Upon the occurrence and during the
continuance of an Event of Default, Borrower agrees to pay interest on the
entire unpaid principal amount of the Term Loan, as well as on any interest or
other amount past due, from the date of such Event of Default until the date the
same is cured in full, payable on demand, at a rate per annum equal at all times
to the Interest Rate plus two percent (2.0%).
(f) Manner of Payment. All payments of principal or interest hereunder or
under the Notes shall be delivered to Agent, for the ratable benefit of Lenders,
in immediately available funds on the date due at such place as Agent may from
time to time designate.
(g) Limitation on Interest Rate. In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest hereunder and charged or
collected by Agent or Lenders or any holder of a Note exceed the highest rate
permissible under any law which a court of competent jurisdiction shall, in a
final determination, deem applicable hereto. In the event that such a court
determines that Agent or any Lender has charged or received interest hereunder
and under the Notes, in excess of the highest applicable rate, the rate in
effect hereunder and under the Notes, shall automatically be reduced to the
maximum rate permitted by applicable law, and Agent and Lenders shall apply all
interest paid in excess of the maximum lawful rate first to amounts owed
pursuant to Section 9(d) and thereafter to the principal balance of the amounts
outstanding hereunder and under the Notes. It is the intent of the parties
hereto that Borrower not pay or contract to pay, and that Agent and Lenders not
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by Borrower to Agent and Lenders
under applicable law.
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3. Representations and Warranties. In order to induce Agent and Lenders to enter
into this Agreement and to make the Term Loan contemplated hereunder, Borrower
hereby represents and warrants to Agent and Lenders as follows:
(a) Legal Status. Borrower is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of Delaware. Borrower
is qualified or licensed to do business, and is in good standing as a foreign
corporation in all jurisdictions in which such qualification or licensing is
required or in which the failure to so qualify or to be so licensed could have a
material adverse effect on Borrower.
(b) Authorization and Validity. This Agreement and the Notes have been
duly authorized, and upon their execution and delivery in accordance with the
provisions hereof and thereof will constitute legal, valid and binding
agreements and obligations of Borrower, enforceable in accordance with their
respective terms.
(c) No Conflict. The execution, delivery, and performance by Borrower of
this Agreement and the Notes do not and will not conflict with the terms of the
Certificate of Incorporation or bylaws of Borrower, violate any provision of any
judgment, decree or order of any court or governmental authority by which
Borrower is bound, or any provision of any law or regulation applicable to
Borrower, or result in a breach of or constitute a default under any contract,
obligation, indenture, or other instrument to which Borrower is a party or by
which Borrower may be bound.
(d) No Consents. The execution, delivery, and performance by Borrower of
this Agreement and the Notes do not and will not require any authorization,
approval, or other action by, or notice to or filing with, any governmental
authority, regulatory body, or any other person or entity.
(e) Use of Proceeds. No proceeds of the Term Loan will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended.
(f) Margin Stock. 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 the Term Loan will be used to purchase or carry any
margin stock or extend credit to others for the purpose of purchasing or
carrying any margin stock, or be used for any purpose which violates or is
inconsistent with the provisions of Regulation X of said Board of Governors.
4. Covenants. Borrower hereby covenants that until all amounts outstanding
hereunder and under the Notes have been indefeasibly paid in full, it shall:
(a) Punctual Payments. Punctually pay the interest and principal with
respect to the Term Loan as provided herein and in the Notes.
(b) Existence. Do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its existence and comply with the
provisions of all documents pursuant to which it is organized and/or which
govern its continued existence; maintain all licenses, permits, governmental
approvals, rights, privileges, and franchises necessary for the conduct of its
business; and conduct its business in an orderly and regular manner and in
accordance with all laws, rules, regulations, and orders of any governmental
authority having jurisdiction over it or its business.
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(c) Books and Records. Maintain adequate books and records in accordance
with generally accepted accounting principles consistently applied, and permit
any representative of Agent or any Lender, at any reasonable time, to inspect,
audit and examine such books and records, to make copies of the same, and to
inspect its assets and properties.
(d) No Liens. Not create or permit to exist any Lien on or with respect to
any property whatsoever of Borrower except for Permitted Liens.
(e) Fundamental Changes. Not (i) liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution), (ii) merge with or consolidate into any
Person, (iii) purchase or otherwise acquire all or substantially all of any
business, division or product line of any Person or all or substantially all of
the assets, equity interests, obligations or other securities of any Person, or
(iv) sell, transfer, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets.
(f) Transactions with Related Parties. Not enter into any transaction,
including the purchase, sale or exchange of property or the rendering of any
services, with any Affiliate, or any officer or director thereof (a "Related
Party"), or enter into, assume or suffer to exist any employment or consulting
contract with any Related Party, except a transaction or contract which is in
the ordinary course of Borrower's business and which is upon fair and reasonable
terms not less favorable to Borrower than it would obtain in a comparable arm's
length transaction with a Person not a Related Party
(g) Restricted Payments. Not declare, make, pay or set aside any funds for
the payment of any Restricted Payment.
5. Conditions Precedent to Term Loan. The obligation of Lenders to make the Term
Loan shall be subject to the condition precedent that Agent shall have received
each of the following, each in form and substance satisfactory to Agent:
(a) This Agreement, duly executed by all of the parties hereto;
(b) The Notes, duly executed by Borrower;
(c) A Warrant in favor of Agent to purchase 400,000 shares of the Common
Stock of Borrower in the form attached hereto as Exhibit B;
(d) A Registration Rights Agreement in favor of Agent in the form attached
hereto as Exhibit C duly executed by Borrower; and
(e) Such additional supporting documents as Agent or its counsel, or any
Lender or its counsel, may reasonably request.
6. Survival of Representations and Warranties. Borrower covenants, warrants and
represents to Agent and Lenders that all representations and warranties of
Borrower contained in this Agreement or the Notes shall be true at the time of
Borrower's execution of this Agreement and the Notes, shall survive the
execution, delivery and acceptance thereof by Agent and the parties thereto and
the closing of the transactions described therein or related thereto.
7. Events of Default. The occurrence of any of the following shall constitute an
"Event of Default" and shall, at the option of Lenders (except for subparagraph
(e) in which case all amounts shall be automatically accelerated), require
immediate payment in full of all sums then remaining unpaid hereunder and under
the Notes:
(a) Failure to Pay the Notes. The failure of Borrower to pay any
principal, interest or other amount due under the Notes when due and payable.
(b) Breach of Covenant, Representation or Warranty. The failure of
Borrower to perform or observe any covenant, condition or agreement contained in
this Agreement (other than the payment obligations, the breach of which shall be
governed by subsection (a) above) where such failure is not cured within five
(5) Business Days, or any representation or warranty made or deemed made by any
of them under or in connection with this Agreement shall prove to have been
false or misleading in any material respect when made.
(c) Cross-Default. The occurrence and continuance of a default or event of
default under any of the documents contemplated by the SBIB Term Sheet.
(d) Liens. Borrower creates, incurs, assumes or suffers to exist any Lien
upon or with respect to any of its properties or assets whether now owned or
hereafter acquired, including, without limitation, any governmental, tax, or
judgment Lien, other than Permitted Liens, and fails to have the same removed or
released within two Business Days after the creation thereof.
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(e) Insolvency. Borrower shall become insolvent; admit in writing its
inability to pay its debts as they mature; make an assignment for the benefit of
creditors; or if bankruptcy proceedings or other proceedings for relief under
any bankruptcy law or any law for the relief of debtors shall be instituted by
or against it and, if instituted against it, the same is not dismissed within
sixty (60) days of the filing thereof.
(f) Dissolution. Any order, judgment, or decree shall be entered against
Borrower decreeing its involuntary dissolution or split up and such order shall
remain undischarged and unstayed for a period in excess of sixty (60) days; or
Borrower shall otherwise dissolve or cease to exist.
(g) Certain Judgments and Orders. A levy or writ of attachment or
garnishment or other like judicial process is filed or issued against or upon
Borrower, or a final judgment or order for the payment of money in excess of
$500,000 which is not fully covered by insurance is rendered against Borrower
and remains unpaid, unbonded, unvacated or unstayed for a period of 30 days
after the entry thereof.
8. Remedies. If an Event of Default shall occur, (a) all amounts outstanding
hereunder and under the Notes, notwithstanding any term of this Agreement or the
Notes to the contrary, shall at Agent's option and without notice to Borrower
become immediately due and payable, without presentment, demand, protest or
notice of dishonor, all of which are hereby expressly waived by Borrower, and
(b) Agent shall have all rights, powers and remedies available hereunder, or
accorded by law. All rights, powers and remedies of Agent in connection with
this Agreement and the Notes may be exercised at any time by Agent and from time
to time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.
9. Agent.
(a) Appointment and Authorization. Each Lender, for itself and its
successors and assigns, hereby irrevocably appoints Agent as its agent (and
Agent hereby accepts such appointment) to take such actions on its behalf and to
exercise such powers under this Agreement or the Notes as are herein or therein
delegated to Agent or are, in the judgment of Agent, reasonably incidental to
the rights and powers so delegated. Agent shall not by reason of this Agreement
have any fiduciary relationship to any Lender, but shall act solely as an agent
for Lenders; nor shall Agent have any agency or fiduciary relationship to
Borrower. The provisions of this Section 9 are solely for the benefit of Agent
and Lenders, and Borrower shall have no right as a third party beneficiary
hereof.
(b) Approval of Lenders. In performing its functions under this Agreement,
except as otherwise expressly provided herein, Agent shall have the authority
(but not the obligation), on behalf of Lenders, to make any decision, to take
any action or refrain from taking any action and to give any consent or waiver
that it may deem advisable; provided, however, that the written approval of
Lenders shall be required for any amendment, modification, termination or waiver
of any provision of this Agreement or the Notes, or any action or assertion of
rights (or any rescission of any such action or assertion of rights) against
Borrower upon the occurrence of an Event of Default.
(c) No Implied Duties; Agent's Exercise of Discretion. The only duties and
obligations of Agent under this Agreement or the Notes are those which are
expressly set forth herein or therein. Agent shall be entitled to use its
discretion in exercising or refraining from exercising any rights which may be
so vested in it, or in taking or refraining from taking any action which it may
be so empowered to take, unless the matter is one as to which Agent may not act
or refrain from acting without the prior written approval of Lenders pursuant to
Section 9(b) above. Notwithstanding the foregoing, Agent shall not be required
to act or not act in accordance with Lenders' instructions if to do so would
result, in the reasonable judgment of Agent, in a substantial risk of liability
to Agent or would be contrary to this Agreement or the Notes or applicable law.
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(d) Indemnification. Lenders, severally, shall indemnify, defend and hold
harmless Agent and its shareholders, directors, officers, employees, agents,
attorneys and Affiliates and their respective successors and assigns (the
"Agent's Parties") pro rata according to their respective pro rata interests in
the Term Loan, from and against any and all liabilities, obligations, demands,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
(including, without limitation, attorneys' fees and expenses and court costs,
whether or not suit is filed) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent's Parties in any
way relating to or arising out of this Agreement, the Notes or any action taken
or omitted to be taken by Agent's Parties in connection with this Agreement or
the Notes, except that no Lender shall be liable to Agent's Parties for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of any of Agent's Parties. Further, each
Lender, severally, shall reimburse Agent upon demand for that Lender's ratable
share of any costs or expenses incurred by Agent in connection with the
amendment, waiver, refinancing, restructuring (including a restructuring
incident to a bankruptcy reorganization) or enforcement of this Agreement or the
Notes.
10. Miscellaneous.
(a) Failure or Indulgence Not Waiver. No failure or delay on the part of
Agent, Lender, or any holder of a Note in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof or of any other right, power or privilege.
(b) Modification. No modification, amendment or waiver of any provision of
this Agreement or the Notes, nor the consent to any departure by Borrower
therefrom, shall in any event be effective unless the same shall have been
approved by Agent and Lenders and shall be in writing signed by Agent and
Lenders and, with respect to any amendment, Borrower. Such waiver or consent
shall then be effective only in the specific instance and for the purpose for
which given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in the same, similar or other
circumstances.
(c) Notices. Except as otherwise expressly provided herein, any notice
herein required or permitted to be given shall be in writing and shall be deemed
effective when personally delivered, mailed, telecopied (with a confirming copy
sent by mail) or delivered by telex to the appropriate party at the address set
forth below (or at such other address as may be designated by either party in a
written notice sent in accordance with this Section):
If to Borrower: Worldwater Corp.
Pennington Business Park
00 Xxxxx 00 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx
Attention: President
Telecopy No.: 000-000-0000
If to Hong Hong Kong League Central Credit Union
Kong League Party Xxxx 0-0, X/X, Xxx Xxx Xxxxx
Xxxxxxx Credit Xxxx Xxxx Estate, Kowloon, Hong Kong
Union: Telecopy No.: x000-0000-0000
with a copy to: SBI Advisors, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy No.: 000-000-0000
If to HIT
Credit Union: HIT Credit Union
Berth 4, Block 2, 2/F Container Xxxx Xxxx, Xxxxx Xxxx
Xxxxx Xxx Xxxxxxxxxxx, Xxxx Xxxx Telecopy No.:
x000-0000-0000
with a copy to: SBI Advisors, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy No.: 000-000-0000
If to Agent: SBI Advisors, LLC
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy No.: 000-000-0000
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(d) Severability. In case any provision in this Agreement or the Notes
shall be invalid, illegal or unenforceable, such provision shall be severable
from the remainder of such contract and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(e) Applicable Law. This Agreement, the Notes and the rights and
obligations of the parties thereto shall be governed by the laws of the State of
California, exclusive of its conflicts of laws and choice of laws rules that
would or may cause the application of the laws of any jurisdiction other than
the State of California.
(f) Assignability. Borrower shall not assign its rights or obligations
hereunder, or under the Notes to any other Person without the prior written
consent of Agent and Lenders, and any attempted assignment in violation hereof
shall be null and void ab initio. Agent and Lenders shall have the right to
assign their rights and obligations hereunder and no consent or approval from
Borrower is required in connection with any such assignment.
(g) 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.
(h) Section Headings. The various headings used in this Agreement are
inserted for convenience only and shall not affect the meaning or
interpretations of this Agreement or any provision hereof.
(i) Attorneys' Fees. In the event any party institutes any action or
proceeding to enforce the terms and conditions of this Agreement or the Notes,
the prevailing party shall be entitled to reasonable attorneys' fees and costs.
(j) WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE NOTES, OR THE SUBJECT MATTER HEREOF AND THEREOF OR ANY DOCUMENT
RELATING HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING OR WHETHER IN CONTRACT, TORT OR OTHERWISE.
(k) Integration. This Agreement, the Notes and the Exhibits hereto reflect
the entire understanding of the parties with respect to the transactions
contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, whether before or after the date hereof.
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IN WITNESS WHEREOF, the parties hereto do execute this Agreement as of the date
first above written.
"BORROWER"
WORLDWATER CORP., a Delaware corporation
By: _______________________________________
Name: _____________________________________
Its:
"AGENT"
SBI ADVISORS, LLC, solely in its capacity as Agent hereunder
By: ______________________________________
Name: _____________________________________
Its: _____________________________________
"LENDERS"
HONG KONG LEAGUE CENTRAL CREDIT UNION
By: _______________________________________
Name: _____________________________________
Its: _____________________________________
HIT CREDIT UNION
By: _______________________________________
Name: _____________________________________
Its: _____________________________________
EXHIBITS
Exhibit "A-1" - Term Note (Hong Kong League)
Exhibit "A-2" - Term Note (HIT Credit Union)
Exhibit "B" - Warrant
Exhibit "C" - Registration Rights Agreement
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EXHIBIT A-1
OF THE TERM CREDIT AGREEMENT
FORM OF TERM NOTE
TERM NOTE
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U.S. $694,736.84 Los Angeles, California
March 29, 2004
FOR VALUE RECEIVED, the undersigned, WORLDWATER CORP., a Delaware
corporation (the "Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of HONG KONG LEAGUE CENTRAL CREDIT UNION (the "Lender"), without offset or
counterclaim, the principal sum of Six Hundred Ninety Four Thousand Seven
Hundred Thirty-Six Dollars and Eighty Four Cents(U.S.$694,736.84) on or before
the Maturity Date (as such term is defined in the Credit Agreement referred to
below). The Borrower further promises to pay interest on the Term Loan
outstanding hereunder from time to time at the interest rates, and payable on
the dates, set forth in the Credit Agreement referred to below. This Term Note
may be prepaid at any time prior to the Maturity Date without premium or
penalty.
1. Payment. Both principal and interest are payable in lawful money of the
United States of America and in immediately available funds to the Lender at
Berth 0, Xxxxx 0, 0/X, Xxxxxxxxx Xxxx Xxxx, Xxxxx Xxxx Xxxxx, New Territories,
Hong Kong, or such other place as the Agent may designate in writing to the
Borrower from time to time.
2. Record Keeping. The Agent shall record the amount of principal and
interest due and payable from time to time hereunder, each payment thereof and
the resulting unpaid principal balance hereof, in the Lender's internal records,
and any such recordation shall be rebuttable presumptive evidence of the
accuracy of the information so recorded; provided, however, that the Lender's
failure so to record shall not limit or otherwise affect the obligations of the
Borrower hereunder and under the Credit Agreement to repay the principal of and
interest on the Term Loan.
3. Credit Agreement. This Term Note is one of the Notes referred to in,
and is subject to and entitled to the benefits of, that certain Term Credit
Agreement, dated of even date herewith (as amended, modified, renewed or
extended from time to time, the "Credit Agreement") between the Borrower, the
Lender, and certain other parties thereto. Unless otherwise defined herein,
capitalized terms used herein shall have the respective meanings assigned to
them in the Credit Agreement. The Credit Agreement provides, among other things,
for acceleration (which in certain cases shall be automatic) of the maturity
hereof upon the occurrence of certain stated events, in each case without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived.
4. Limitation on Interest Rate. In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest hereunder or under the Credit
Agreement and charged or collected by the Lender or any holder of this Term Note
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lender has charged or received
interest hereunder or under the Credit Agreement in excess of the highest
applicable rate, the rate in effect hereunder and under the Credit Agreement
shall automatically be reduced to the maximum rate permitted by applicable law
and the Lender shall apply all interest paid in excess of the maximum lawful
rate to reduce the principal balance of the amounts outstanding hereunder and
under the Credit Agreement. It is the intent of the parties hereto that the
Borrower not pay or contract to pay, and that the Lender not receive or contract
to receive, directly or indirectly in any manner whatsoever, interest in excess
of the maximum rate of interest that may be paid by the Borrower to the Lender
under applicable law.
5. Governing Law. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, EXCLUSIVE OF ITS CONFLICTS
OF LAWS AND CHOICE OF LAWS RULES THAT WOULD OR MAY CAUSE THE APPICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.
WORLDWATER CORP.
By: ___________________________
Name: _________________________
Its: __________________________
X-0
XXXXXXX X-0
OF THE TERM CREDIT AGREEMENT
FORM OF TERM NOTE
TERM NOTE
---------
U.S. $105,263.16 Los Angeles, California
March 29, 2004
FOR VALUE RECEIVED, the undersigned, WORLDWATER CORP., a Delaware
corporation (the "Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of HIT CREDIT UNION (the "Lender"), without offset or counterclaim, the
principal sum of One Hundred Five Thousand Two Hundred Sixty Three Dollars and
Sixteen Cents (U.S.$105,263.16) on or before the Maturity Date (as such term is
defined in the Credit Agreement referred to below). The Borrower further
promises to pay interest on the Term Loan outstanding hereunder from time to
time at the interest rates, and payable on the dates, set forth in the Credit
Agreement referred to below. This Term Note may be prepaid at any time prior to
the Maturity Date without premium or penalty.
1. Payment. Both principal and interest are payable in lawful money of the
United States of America and in immediately available funds to the Lender at
Berth 0, Xxxxx 0, 0/X, Xxxxxxxxx Xxxx Xxxx, Xxxxx Xxxx Xxxxx, New Territories,
Hong Kong, or such other place as the Agent may designate in writing to the
Borrower from time to time.
2. Record Keeping. The Agent shall record the amount of principal and
interest due and payable from time to time hereunder, each payment thereof and
the resulting unpaid principal balance hereof, in the Lender's internal records,
and any such recordation shall be rebuttable presumptive evidence of the
accuracy of the information so recorded; provided, however, that the Lender's
failure so to record shall not limit or otherwise affect the obligations of the
Borrower hereunder and under the Credit Agreement to repay the principal of and
interest on the Term Loan.
3. Credit Agreement. This Term Note is one of the Notes referred to in,
and is subject to and entitled to the benefits of, that certain Term Credit
Agreement, dated of even date herewith (as amended, modified, renewed or
extended from time to time, the "Credit Agreement") between the Borrower, the
Lender, and certain other parties thereto. Unless otherwise defined herein,
capitalized terms used herein shall have the respective meanings assigned to
them in the Credit Agreement. The Credit Agreement provides, among other things,
for acceleration (which in certain cases shall be automatic) of the maturity
hereof upon the occurrence of certain stated events, in each case without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived.
4. Limitation on Interest Rate. In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest hereunder or under the Credit
Agreement and charged or collected by the Lender or any holder of this Term Note
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lender has charged or received
interest hereunder or under the Credit Agreement in excess of the highest
applicable rate, the rate in effect hereunder and under the Credit Agreement
shall automatically be reduced to the maximum rate permitted by applicable law
and the Lender shall apply all interest paid in excess of the maximum lawful
rate to reduce the principal balance of the amounts outstanding hereunder and
under the Credit Agreement. It is the intent of the parties hereto that the
Borrower not pay or contract to pay, and that the Lender not receive or contract
to receive, directly or indirectly in any manner whatsoever, interest in excess
of the maximum rate of interest that may be paid by the Borrower to the Lender
under applicable law.
5. Governing Law. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, EXCLUSIVE OF ITS CONFLICTS
OF LAWS AND CHOICE OF LAWS RULES THAT WOULD OR MAY CAUSE THE APPICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.
WORLDWATER CORP.
By: ____________________________
Name: __________________________
Its: ___________________________
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