exhibit (e) (4)
ALPNET, INC.
A UTAH CORPORATION
CORPORATE OFFICES:
0000 XXXXX XXXXXXXX XXXXX, XXXXX #000
XXXX XXXX XXXX, XXXX 00000-0000
LOAN AND SECURITY AGREEMENT
Lender: XXXXXXX X. XXXXXXXXX, XX
Borrower: ALPNET, INC.
A Utah Corporation
Address: 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx #000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
AMOUNT OF LOAN: $500,000
DATE OF LOAN: 16 July 2001
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "AGREEMENT") is made and entered
into effective the 16th day of July 2001, by and between XXXXXXX X. XXXXXXXXX,
XX, an individual whose address is 00000 Xxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxxxx
00000 (the "LENDER"), and ALPNET, INC., a Utah Corporation, whose address is
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx #000, Xxxx Xxxx Xxxx, Xxxx 00000-0000 (the
"BORROWER").
RECITALS:
A. BORROWER. Borrower is a Utah corporation and is affiliated with the
following companies (referred to herein individually as an "AFFILIATED COMPANY"
and collectively as "AFFILIATED COMPANIES"). Borrower, directly or indirectly,
owns all or a majority of the issued and outstanding stock of the AFFILIATED
COMPANIES.
B. AFFILIATED COMPANIES.
B. 1 US HOLDING COMPANY. a.l.p. Services, Inc. (the "US HOLDING
COMPANY"), a Utah corporation, is a wholly owned subsidiary of the Borrower
and is the United States holding company for various international holding
companies and/or operating companies that are affiliated with the Borrower.
B.2 GERMAN COMPANIES.
B.2.1 GERMAN HOLDING COMPANIES.
(a) ALPNET GmbH HRB 12945, (a) is a corporation that is organized
under the laws of the Federal Republic of Germany; (b) is a wholly owned
subsidiary of the US Holding Company; (c) has a registered share capital of
DM 50,000; and (d) is the limited partner of ALPNET Deutschland GmbH & Co
KG (the "GERMAN OPERATING COMPANY").
(b) ALPNET Verwaltung GmbH i.F. HRB 21414, (a) is a corporation that
is organized under the laws of the Federal Republic of Germany; (b) is a
wholly owned subsidiary of the US Holding Company; (c) has a registered
share capital of 25,000 EURO; and (d) is the general partner of the German
Operating Company.
(c) Both ALPNET GmbH and ALPNET Verwaltung GmbH i.F. are collectively
referred to herein as the "GERMAN HOLDING COMPANIES". The registered share
capital for both German Holding Companies are collectively referred to
herein as "GERMAN HOLDING COMPANIES' SHARES").
B.2.2 GERMAN OPERATING COMPANY. ALPNET Deutschland GmbH & Co. KG is a
limited partnership organized under the laws of the Federal Republic of
Germany and has a registered share capital of DM 100,000. DM 99,500 of the
share capital is
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held by its limited partner, ALPNET GmbH and DM 500 of the share capital is
held by its general partner, ALPNET Verwaltung GmbH i.F. The partnership
interests in the German Operating Company are collectively referred to as
"PARTNERSHIP INTERESTS".
B.2.3 The German Holding Companies and the German Operating Company
shall sometimes be referred to herein collectively as the "GERMAN
COMPANIES." Under German law, no physical certificates evidence the German
Holding Companies' Shares.
C. NEED FOR ADDITIONAL FUNDS. The Borrower has an immediate need for a loan
of $500,000 in order to cover operating costs and expenses of the Borrower. The
Borrower has been unable to obtain financing elsewhere and has therefore
requested that the Lender lend it the sum of $500,000.
D. LENDER'S AGREEMENT TO LEND. In light of the Borrower's immediate need
for a "Loan" (as hereafter defined), the Lender is willing to loan funds if
adequate security and incentives are made available to the Lender.
E. CONSIDERATION OF GERMAN COMPANIES. As a condition of making the Loan,
the Lender has required, among other things, that all of the shares in the
German Holding Companies, together with a pledge of the Partnership Interests
and a pledge of the accounts receivables of the German Operating Company, be
pledged as collateral for the Loan.
F. CONDITIONS OF MAKING LOAN. The Lender is willing to loan the requested
funds and the Borrower is willing to borrow the same upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the promises herein contained, and each
intending to be legally bound hereby, the parties agree as follows:
SECTION 1. DEFINITIONS.
As used herein:
1.01. "ACCOUNTS RECEIVABLES" means the accounts receivables of the German
Operating Company.
1.02. "CLOSING" means the date of this Agreement, or such other date as may
be mutually agreed to by the parties hereto.
1.03. "COLLATERAL" means the property in which the Security Interest is
granted by the Borrower to the Lender pursuant to the provisions of section 4 of
this Agreement.
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1.04. "COLLATERAL DOCUMENTS" means all those certain documents specified in
paragraph 3.01 of this Agreement.
1.05. "GERMAN HOLDING COMPANIES' SHARES" means all of the Shares of the
German Holding Companies.
1.06. "INDEBTEDNESS" means, as to the Borrower, all items of indebtedness,
obligation or liability, whether matured or unmatured, liquidated or
unliquidated, direct or contingent, joint or several, in connection with the
Loan.
1.07. "LAWS" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs or decrees of any government or political subdivision or
agency thereof, or any court or similar entity established by any thereof.
1.08. "LOAN" means the loan that is described in section 2 of this
Agreement.
1.09. "LOAN DOCUMENTS" mean this Agreement, the Note and the Collateral
Documents.
1.10. "NOTE" means that certain promissory note that is described in
section 2 of this Agreement.
1.11. "OBLIGATIONS" means the obligation of the Borrower to pay the
principal and the interest on the Loan as evidenced by the Note, in accordance
with the terms thereof, and to satisfy all of its liabilities to the Lender in
connection with the Loan and the Collateral Documents, whether under this
Agreement or otherwise, whether now existing or hereafter incurred, matured or
unmatured, direct or contingent, joint or several, including any extensions,
modifications, renewals thereof and substitutions therefor.
1.12. "PARTNERSHIP INTERESTS" means the general and limited partnership
interests in the German Operating Company.
1.13. "PERSON" means any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, joint venture, court or
government or political subdivision or agency thereof.
1.14 "REASSIGNMENT CLAIM" means the right to the reassignment of the
remaining outstanding accounts receivables of the German Operating Company, upon
full settlement of the obligations to Baden-Wuttembergische Bank
Akiengesellschaft ("BW BANK").
1.15. "SECURITY INTEREST" means the security interest in the Collateral
that the Borrower grants to the Lender pursuant to the provisions of section 4
of this Agreement and that remains in effect from time to time.
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SECTION 2. THE LOAN.
2.01. GENERAL TERMS. The Lender will lend to the Borrower the sum of FIVE
HUNDRED THOUSAND DOLLARS ($500,000), payable at closing and, subject to the
following terms and conditions:
2.02. THE NOTE. The Loan shall be evidenced by the Note, which shall be
executed and delivered to the Lender in the form of Exhibit "A", attached hereto
and incorporated herein by reference.
2.03. PAYMENT OF PRINCIPAL AND INTEREST. The principal balance of the Loan,
together with all interest accrued thereon, shall be paid according to the terms
of the Note, but in any event shall be due and payable in full on or before 31
December 2001 or at such other time as shall be required by the terms and
provisions of the Note or any of the Loan Documents.
2.04. PREPAYMENTS. The Borrower may prepay the outstanding principal
balance of the note, together with accrued interest thereon, in whole or in
part, at any time before maturity without premium or penalty.
2.05. INTEREST RATE. Interest on the unpaid principal balance under the
Note shall accrue and be payable at the rate of ELEVEN percent (11%) per annum
from the date of the Note until payment in full; subject, however, to the
provisions of the Note. If the interest that is contracted for, charged or
received under the Note (or otherwise in connection with the Loan) would be
usurious under applicable Law, then regardless of any provision in the Note or
the Loan Documents to the contrary, all consideration that constitutes (or is
adjudicated as constituting) such interest shall not exceed the maximum
nonusurious interest rate under applicable Law at the time; any excess interest
that has been collected shall be applied first to reduce the principal balance
of the Note and second to be refunded to the Borrower. In determining whether
the interest rate is usurious, the Lender and the Borrower shall, to the maximum
extent permitted under applicable Law, (a) characterize any nonprincipal payment
as an expense, fee or premium rather than interest; and (b) amortize and spread
all consideration that comprises such interest on the Loan over the full period
of time that any part of the Indebtedness is outstanding.
SECTION 3. CONDITIONS PRECEDENT.
The obligation of the Lender to make the Loan hereunder, and the Borrower's
obligations hereunder, are both subject to the satisfaction of the following
conditions precedent at or before the Closing:
3.01. DOCUMENTS REQUIRED FOR THE CLOSING. The Borrower shall have executed
and delivered to the Lender, prior to the Lender's execution and delivery of
this Agreement, the following:
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3.01.01. GENERAL DOCUMENTS. This Agreement, the Note and all exhibits
hereto and thereto.
3.01.02. SHARE PLEDGE AGREEMENTS. Separate pledge agreements in the form of
a notarial deed by which the German Holding Companies' Shares are pledged to the
Lender as collateral security for the Loan.
3.01.3. PARTNERSHIP PLEDGE AGREEMENT. A pledge agreement by which the
Partnership Interests in the German Operating Company are pledged to the Lender
as collateral security for the Loan
3.01.04 SECURITY ASSIGNMENT AGREEMENT. An agreement by which, after
settlement of the full obligations to the BW Bank, the Reassignment Claim to the
balance of the Accounts Receivables of the German Operating Company is pledged
to the Lender.
3.01.05 RESOLUTION OF BORROWER. A certified (as of the date of the
Closing) copy of a resolution or resolutions of the board of directors of the
Borrower, authorizing the execution, delivery and performance of this Agreement,
the Note, the Share Pledge Agreements, the Partnership Pledge Agreement and the
Security Assignment Agreement, and each other document to be delivered pursuant
hereto or thereto.
3.01.06. RESOLUTIONS OF GERMAN HOLDING COMPANIES. A copy of a resolution of
the board of directors, or another governing body or person of each of the
German Holding Companies authorizing the execution, delivery and performance of
the Share Pledge Agreements, whereby the shares in the German Holding Companies,
and the Security Assignment Agreement, whereby the Partnership Interests in the
German Operating Company, are pledged as Collateral to secure the Borrower's
obligations under the Loan.
3.01.07. RESOLUTIONS OF THE GERMAN OPERATING COMPANY. A copy of a
resolution of the board of directors, or another governing body or person of the
German Operating Company authorizing the execution and delivery and performance
of the Security Assignment Agreement, whereby the accounts receivable of the
German Operating Company are pledged as Collateral, subject to the existing
priority lien of a pledge in favor of BW Bank.
3.01.08. OPINION FROM US COUNSEL. A legal opinion of the Borrower's United
States counsel in a form substantially as per form in Exhibit "___" hereof. Such
opinion shall relate only to the Borrower and to the laws of Utah and the United
States.
3.01.09. OPINIONS FROM BORROWER'S GERMAN LEGAL COUNSEL. A legal opinion
from the Borrower's counsel in Germany regarding the following matters as to the
German Companies (a) that a duly perfected security interest in the German
Holding Companies' Shares has been created in favor of the Lender as security
for the Loan; (b) that a duly perfected security interest in the Partnership
Interests of the German Operating Company has been created in favor of the
Lender as security for the Loan; and (c) that, subject to the existing priority
lien of a pledge in favor of BW Bank, a duly perfected assignment of the
Reassignment Claim in the accounts receivables of the German Operating Company
has been created in favor of the Lender
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as security for the Loan; (d) that all necessary corporate action has been taken
by the German Holding Companies in order to authorize the execution and delivery
of the German Holding Companies' Shares under the relevant Share Pledge
Agreement, the pledge of the Partnership Interests in the German Operating
Company under the relevant Partnership Pledge Agreement; and the assignment of
the Reassignment Claim to the accounts receivable under the Security Assignment
Agreement; (d) such other matters that might be reasonably requested by the
Lender or his legal counsel.
3.02. REVIEW BY LENDER'S COUNSEL. The review and approval by the Lender's
outside legal counsel of the substance and form of all documents evidencing
and/or securing the Loan. Such approval shall not be withheld unreasonably. The
Borrower shall reimburse the Lender for reasonable costs and fees charged by
such outside legal counsel.
3.03. APPROVAL BY OTHER SHAREHOLDERS. The shareholders of each of the
German Holding Companies shall have approved the pledge of the relevant German
Shares under the Share Pledge Agreements and the pledge of the Partnership
Interests under the Partnership Pledge Agreement; the shareholders of the German
Operating Company have approved the assignment of the Reassignment Claim of the
accounts receivables under the Security Assignment Agreement; provided, however,
that the consent for the German Companies may be evidenced by the execution of
appropriate powers of attorney authorizing the execution of the notarial deed
which is the Share Pledge Agreement for the German Holding Companies' Shares.
SECTION 4. COLLATERAL SECURITY AND SECURITY INTEREST THEREIN
4.01. COLLATERAL GENERALLY. As of the effective date of this Agreement, it
is intended that the Collateral shall consist of the property described in
section 4.02 below. The Collateral shall stand as one general, continuing
collateral security for the Loan.
4.02. SECURITY INTEREST AND COMPOSITION OF COLLATERAL. As security for the
prompt satisfaction of the Loan, the Borrower shall cause the German Companies,
to grant, and such parties (to the extent they are parties hereto) hereby grant,
to the Lender a lien upon and a security interest in the following:
4.02.01. GERMAN SHARES. The German Holding Companies' Shares.
4.02.02 PARTNERSHIP INTERESTS. The Partnership Interests in the German
Operating Company.
4.02.03 ACCOUNTS RECEIVABLES. The Reassignment Claim for the German
Operating Company's Accounts Receivables.
4.03. PLEDGE OF GERMAN SHARES. Prior to, on or immediately following the
date of the Closing and in accordance with the customary practice in Germany,
the pledge of the German Holding Companies' Shares shall be appropriately
recorded before a German notary.
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4.04. PRIORITY OF LIENS. With the exception of the prior existing lien on
the German Operating Company's Accounts Receivables in favor of BW Bank, Lender
shall have a first priority lien on the Collateral.
4.05. ADDITIONAL ACTS. The parties will take such additional steps as the
other reasonably may direct in order to protect and perfect the Lender's
security interest in the Collateral, including, without limitation, appointing
attorneys-in-fact to appear before a notary for the purpose of entering into the
Share Pledge Agreements.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
5.01. BY BORROWER. To induce the Lender to enter into this Agreement, the
Borrower represents and warrants to the Lender as follows:
5.01.01. STATUS OF BORROWER. The Borrower is a corporation which is
duly organized, validly existing and in good standing under the laws of the
State of Utah; the Borrower has the lawful power to own properties and to
engage in the business it conducts; and the Borrower is duly qualified and
in good standing in each jurisdiction in which the character of the
properties owned by the Borrower or the conduct of its business makes such
qualification necessary.
5.01.02. NO ADVERSE IMPACT. The making and performance of the Loan
Documents will not (immediately, with the passage of time, with the giving
of notice or both):
5.01.02.01. OF CORPORATE DOCUMENTS. Violate the articles of
incorporation or the bylaws of the Borrower; violate any Laws; or
result in a default under, and will not be in contravention of or in
conflict with, any contract, agreement or instrument to which the
Borrower is a party or by which the Borrower or its property is bound;
or
5.01.02.02. NO LIENS. Result in the creation or imposition of any
new security interest in, or lien or encumbrance upon, any of the
Collateral except in favor of the Lender.
5.01.03. CORPORATE AUTHORITY. The Borrower has the power and authority
to enter into and perform the Loan Documents, and to incur the Obligations
herein and therein provided for, and has taken all corporate or other
actions necessary to authorize the execution, delivery, and performance of
the Loan Documents.
5.01.04. BINDING DOCUMENTS. The Loan Documents, when executed and
delivered, will be valid, binding and enforceable in accordance with their
respective terms; subject to applicable insolvency, reorganization,
liquidation, moratorium, readjustment or debt or other similar laws
affecting the enforcement of creditors' rights and applicable principles of
equity.
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5.01.05. RIGHTS IN COLLATERAL. The Borrower, either by itself or by
and through the Affiliated Companies, has rights and interests in the
Collateral.
5.01.06. NO ADVERSE ACTIONS. The Borrower is not a party (and to the
best of the Borrower's knowledge, the Affiliated Companies are not parties)
to any pending suits or proceedings by or before any tribunal (whether
judicial, administrative or otherwise) that would have a material adverse
effect on the Borrower's financial condition, or that could impair the
validity, effectiveness or enforceability of, or impair the Borrower's
ability to perform its obligations under the Loan Documents, nor to the
best of the Borrower's knowledge are there any threatened claims or actions
that might become the subject of litigation, which might have a similar
material adverse effect.
5.01.07. NO VIOLATIONS OF SECURITIES LAWS. The Borrower has no
knowledge of the violation of any federal or state securities Laws that
would have a material adverse effect on the Loan transaction.
5.01.08. NO ADVERSE PROCEEDINGS. To the best of the Borrower's
knowledge, (a) neither the German Holding Companies' Shares; (b) the
Partnership Interests; or, (c) the Accounts Receivables are subject to any
materially adverse actions, suits or proceedings, pending, contemplated or
threatened; and, (b) none of the Affiliated Companies is subject to any
bankruptcy, insolvency or receivership proceedings.
5.01.09. NO NOTICE OF VIOLATION OF LAWS. The Borrower has not received
notice of any violations of federal, state or local Laws from governmental
entities or agencies having jurisdiction over the Borrower, which
violations would have a material adverse impact on the financial condition
of the Borrower.
5.01.10. ALL ISSUED CAPITAL. The German Holding Companies' Shares
represent the entire issued share capital of the respective Affiliated
Companies.
5.01.11. NO GOVERNMENTAL CONSENTS. The Borrower's execution, delivery
and performance of the Loan Documents do not require the consent or
approval of any body or governmental authority.
5.01.12. NO DEFAULT. There has occurred and is continuing no "Event of
Default" (as hereafter defined) or any event which with the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
5.01.13. ACCURACY OF INFORMATION. All information submitted by or on
behalf of the Borrower to the Lender in connection with the transaction
which is the subject of this Agreement is true and correct as of the date
hereof and no act or event has occurred which could materially and
adversely affect the Borrower or which could impair the validity,
effectiveness or enforceability of, or impair, the Borrower's ability to
perform its obligations under the Loan Documents.
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5.01.14. TAXES. All tax returns required of the Borrower have either
been filed or extensions for filing the same have been filed; there is no
proposed material tax assessment or liability against the Borrower; and no
extension of time for the assessment of any tax of the Borrower is in
effect or has been requested.
5.01.15. INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
subsidiaries is an "Investment Company" within the meaning of the
Investment Company Act of 1940, as amended.
5.01.16. LICENSE, TRADEMARKS, ETC. The Borrower owns all properties
and has all licenses, trademarks, trademark rights, tradenames, tradename
rights, copyrights, permits and franchises required in order for it to
conduct its business as now or proposed to be conducted, without known
conflict with the rights of others.
5.01.17. EXISTING DEFAULTS. The Borrower is not in default under any
material term of any security agreement, mortgage, indenture, deed of trust
or any other agreement relating to any obligation for borrowed money or
other indebtedness.
5.01.18. COMPLIANCE. The Borrower is in compliance with each order,
writ, injunction, decree and demand applicable to it issued by any judicial
or governmental authority, and to the best of the Borrower's knowledge and
belief, the Borrower is in compliance with existing Laws.
5.02. BY HOLDING COMPANIES. The Borrower and the US Holding Company, in
their capacities as shareholders or upstream parents of the German Holding
Companies, hereby undertake on behalf of the German Holding Companies (and as
shareholders of the German Holding Companies shall cause the German Holding
Companies to comply with) all matters in this paragraph that are deemed to be
undertaken by the German Holding Companies. By their signatures below, each
German Holding Company hereby affirms the grant of a first priority security
interest in that Collateral which is owned by the respective Holding Company in
consideration of the financial accommodation to the Borrower. In addition, each
Holding Company specifically represents and warrants to the Lender as follows;
provided, however, that such warranties and representations are limited to each
Holding Company itself and not the other Holding Company:
5.02.01. HOLDING OF GERMAN HOLDING COMPANY SHARES. The US Holding
Company represents that it is the legal owner of all of the issued and
outstanding shares of the German Holding Companies.
5.02.02. HOLDING OF OPERATING COMPANY SHARES. The German Holding
Companies represent that they are the legal owners of all the issued and
outstanding Partnership Interests of the German Operating Company.
5.02.03. NO LIENS. The Collateral owned by the German Holding Company
is free of all encumbrances.
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5.02.04. CORPORATE STATUS. The Holding Company (a) is a business
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it was incorporated; (b) has the lawful power to own
properties and to engage in the business it conducts; and (c) is duly qualified
and in good standing in each jurisdiction in which the character of the
properties owned by the Holding Company or the conduct of its business makes
such qualification necessary.
5.02.05. NO ADVERSE IMPACT. The execution, delivery and performance of
this Agreement and the Affiliate Pledge Agreement by the Holding Company will
not (immediately, with the passage of time, with the giving of notice or both):
5.02.05.01. OF CORPORATE DOCUMENTS. Violate the charter, the
articles of incorporation or the bylaws of the Holding Company; violate any
Laws; or result in a default under, and will not be in contravention of or in
conflict with, any contract, agreement or instrument to which the Holding
Company is a party or by which the Holding Company or its property is bound; or
5.02.05.02. NO LIEN. Result in the creation or imposition of any
security interest in, or lien or encumbrance upon, any of the Collateral owned
by the Holding Company except in favor of the Lender.
5.02.06. CORPORATE AUTHORITY. The Holding Company has the power and
authority to enter into and perform its obligations under this Agreement and the
Affiliate Pledge Agreement, and has taken all corporate or other actions
necessary to authorize the execution, delivery and performance of its
obligations under this Agreement and the Share Pledge Agreements.
5.02.07. BINDING DOCUMENTS. This Agreement and the Share Pledge
Agreement, when executed and delivered by the Holding Company, will be valid,
binding and enforceable against the Holding Company in accordance with the terms
of such agreements that are expressly applicable to the Holding Company; subject
to applicable insolvency, reorganization, liquidation, moratorium, readjustment
of debt or other similar laws affecting the enforcement of creditors' rights and
applicable principles of equity.
5.02.08. NO ADVERSE ACTIONS. The Holding Company is not a party to any
pending suits or proceedings by or before any tribunal (whether judicial,
administrative or otherwise) that would have a material adverse effect on the
Holding Company's financial condition, or that could impair the validity,
effectiveness or enforceability of, or impair the Holding Company's ability to
perform its obligations under, this Agreement or the Share Pledge Agreement, nor
to the best of the Holding company's knowledge are there any threatened claims
or actions that might become the subject of litigation, which might have a
similar material adverse effect.
5.02.09. SHARES NOT SUBJECT TO ADVERSE PROCEEDINGS. To the best of the
Holding Company's knowledge, (a) the German Holding Companies' Shares are not
subject to
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any materially adverse actions, suits or proceedings, pending, contemplated or
threatened and (b) the Holding Company is not subject to any bankruptcy,
insolvency or receivership proceedings.
5.02.10. NO NOTICE OF VIOLATION OF LAWS. The Holding Company has not
received notice of any violations of applicable Laws from governmental entities
or agencies having jurisdiction over the Holding Company, which violations would
have a material adverse impact on the financial condition of the Holding
Company.
5.02.11. NO GOVERNMENTAL CONSENTS. The Holding Company's execution,
delivery and performance of this Agreement and the Share Pledge Agreement, does
not require the consent or approval of any body or governmental authority.
5.02.12. TAXES. All tax returns required of the Holding Company have
been filed, or extensions for filing the same have been filed; there is no
proposed material tax assessment or liability against the Holding Company; and
no extension of time for the assessment of any tax of the Holding Company is in
effect or has been requested.
5.02.13. LICENSE, TRADEMARKS, ETC. The Holding Company owns all
properties and has all licenses, trademarks, trademark rights, tradenames,
tradename rights, copyrights, permits an franchises required in order for it to
conduct its business as now or proposed to be conducted, without known conflict
with the rights of others.
5.02.14. EXISTING DEFAULTS. The Holding Company is not in default
under any material term of any security agreement, mortgage, indenture, deed of
trust or any other agreement relating to any obligation for borrowed money or
other indebtedness.
5.02.15. COMPLIANCE. The Holding Company is in compliance with each
order, writ, injunction, decree and demand applicable to it issued by any
judicial or governmental authority, and to the best of the Holding Company's
knowledge and belief, the Holding Company is in compliance with existing Laws.
5.03. BY THE OPERATING COMPANY. The Borrower and the US Holding Company, in
their capacities as upstream parents of the German Operating Company, hereby
undertake on behalf of the German Operating Company (and as upstream parent of
the German Operating Company shall cause the German Operating Company to comply
with) all matters in this paragraph that are deemed to be undertaken by the
German Operating Company. In consideration of (a) the financial accommodation to
the Borrower, the German Operating Company specifically represents and warrants
to the Lender as follows:
5.03.01. CORPORATE STATUS. The Operating Company (a) is a business
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it was incorporated; (b) has the lawful power to own
properties and to engage in the business it conducts; and (c) is duly qualified
and in good standing in each jurisdiction in which the character of the
properties owned by the Operating Company or the conduct of its business makes
such qualification necessary.
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5.03.02. NO ADVERSE IMPACT. The execution, delivery and performance of
this Agreement by the Operating Company will not (immediately, with the passage
of time, with the giving of notice or both) violate the charter, the articles of
incorporation or the bylaws of the Operating Company; violate any Laws; or
result in a default under, and will not be in contravention of or in conflict
with, any contract, agreements or instrument to which the Operating Company is a
party or by which the Operating Company or its property is bound.
5.03.03. CORPORATE AUTHORITY. The Operating Company has the power and
authority to enter into and perform its obligations under this Agreement and has
taken all corporate or other actions necessary to authorize the execution,
delivery and performance of its obligations under the Agreement.
5.03.04. BINDING DOCUMENTS. This Agreement, when executed and
delivered by the Operating Company, will be valid, binding and enforceable
against the Operating Company in accordance with the terms hereof that are
expressly applicable to the Operating Company; subject to applicable insolvency,
reorganization, liquidation, moratorium, readjustment of debt or other similar
laws affecting the enforcement of creditors' rights and applicable principles of
equity.
5.03.05. NO ADVERSE ACTIONS. The Operating Company is not a party to
any pending suits or proceedings by or before any tribunal (whether judicial,
administrative or otherwise) that would have a material adverse effect on the
Operating Company's financial condition, or that could impair the validity,
effectiveness or enforceability of, or impair the Operating Company's ability to
perform its obligations under, this Agreement, nor to the best of the Operating
Company's knowledge are there any threatened claims or actions that might become
the subject of litigation, which might have a similar material adverse effect.
5.03.06. NO BANKRUPTCY. The Operating Company is not subject to any
bankruptcy, insolvency or receivership proceedings.
5.03.07. NO NOTICE OF VIOLATION OF LAWS. The Operating Company has not
received notice of any violations of applicable Laws from governmental entities
or agencies having jurisdiction over the Operating Company, which violations
would have a material adverse impact on the financial condition of the Operating
Company.
5.03.08. NO GOVERNMENTAL CONSENTS. The Operating Company's execution,
delivery and performance of this Agreement does not require the consent or
approval of any body or governmental authority.
5.03.09. TAXES. All tax returns required of the Operating Company have
been filed or extensions for filing the same have been filed; there is no
proposed material tax assessment or liability against the Operating Company; and
no extension of time for the assessment of any tax of the Operating Company is
in effect or has been requested.
5.03.10. LICENSE, TRADEMARKS, ETC. The Operating Company owns all
properties and has all licenses, trademarks, trademark rights, tradenames,
tradename rights,
13
copyrights, permits and franchises required in order for it to conduct its
business as now or proposed to be conducted, without known conflict with the
rights of others.
5.03.11. EXISTING DEFAULTS. The Operating Company is not in default
under any material term of any security agreement, mortgage, indenture, deed of
trust or any other agreement relating to any obligation for borrowed money or
other indebtedness.
5.03.12. COMPLIANCE. The Operating Company is in compliance with each
order, writ, injunction, decree and demand applicable to it issued by any
judicial or governmental authority, and to the best of the Operating Company's
knowledge and belief, the Operating Company is in compliance with existing Laws.
5.03.13 EXISTING BW BANK PLEDGE. The Borrower agrees with respect to
the existing pledge of the Accounts Receivable in favor of BW Bank, that it will
not increase or cause to be increased (1) the maximum available loan amount
beyond its current agreed upon level; and (2) the current allowable ratio
between the available loan amount and the value of the Accounts Receivables.
5.04. SURVIVAL. All of the representations and warranties that are set
forth in paragraphs 5.01, 5.02 and 5.03 hereof shall survive until all
Obligations are satisfied in full.
SECTION 6. COVENANTS.
6.01. BORROWER'S COVENANTS. The Borrower hereby covenants and agrees with
the Lender that, so long as any of the Obligations remain unsatisfied and
without obtaining the prior written consent of the Lender, it will comply with
the following covenants:
6.01.01. INTEREST IN COLLATERAL. The Borrower will maintain its
interest in the Collateral that it owns as of the date hereof.
6.01.02. RECORDS. The Borrower agrees to keep and maintain at the
Borrower's primary finance office located in Croydon, UK, or at such other place
as the Lender may approve, true and complete books and records of accounts in
connection with its operations. The Borrower will, when reasonably requested so
to do, make available for inspection by duly authorized representatives of the
Lender any of its books and records, and will furnish the Lender any information
regarding its business affairs and financial condition within a reasonable time
after written request therefor; provided, however, that the Lender will not
disclose to third parties or disclose any proprietary information or trade
secrets obtained from such inspections.
6.01.03. LEGAL EXISTENCE AND LAWS. The Borrower will take all
necessary steps to preserve its legal existence; will materially comply with all
applicable present and future Laws and all material agreement(s) to which it is
subject; will maintain its business as presently conducted; will maintain all of
its rights, privileges and franchises necessary in the normal conduct of its
business; and will conduct its business in an orderly, efficient and regular
manner.
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6.01.04. ADVERSE MATTERS. The Borrower will promptly give written
notice to the Lender of the occurrence of the following:
6.01.04.01. ADVERSE CONDITIONS. Any condition or event that, with
the giving of notice or passage of time or both, could have a material adverse
effect on the financial condition, business or operations of the Borrower,
including, without limitation, the commencement or threat of any action, suit,
claim or proceeding against or investigation of the Borrower that could
materially and adversely affect the Borrower or that could impair the Borrower's
ability to perform its obligations under the Loan Documents; and
6.01.04.02. EVENT OF DEFAULT. Any Event of Default or any event,
which with the giving of notice or the lapse of time, or both, would constitute
and Event of Default and the action the Borrower proposes to take with respect
thereto.
6.01.05. COLLATERAL DOCUMENTS. The Borrower will comply with the terms
and conditions of the Collateral Documents.
6.01.06. REPORTS. The Borrower shall provide copies or each quarterly
Form 10Q (no later than 45 days after the end of each calendar quarter) filed
with the United States Securities and Exchange Commission (the "SEC").
6.01.07. ENCUMBRANCES. The Borrower will not further encumber the
Collateral or allow any Affiliated Company to further encumber the Collateral.
In particular, except for the existing accounts receivable pledge in favor of BW
Bank, the Borrower shall not, without the prior written consent of the Lender,
create, incur, assume or suffer to exist any mortgage, deed of trust, lien,
security interest or other encumbrance on any Collateral or any portion thereof.
6.01.08. PAYMENT OF TAXES, ETC. The Borrower shall pay and discharge,
or cause to be paid and discharged, promptly all taxes, assessments and
governmental charges or levies imposed upon it or upon its properties or upon
any part thereof, before the same shall become in default, except those being
contested in good faith and for which reserves or other arrangements that are
reasonably satisfactory to the Lender have been made.
6.01.09. OTHER INDEBTEDNESS. The Borrower shall promptly pay and
discharge any and all indebtedness, liens, charges, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any of its properties prior to the date on which penalties accrue thereon,
except those being contested in good faith and for which reserves or other
arrangements that are satisfactory to the Lender have been made.
6.01.10. INSURANCE. The Borrower shall, at all times, keep and
maintain insurance to such extent and against such risks as is customary for
companies of comparable size in the same or similar business and property in the
same general area.
15
6.02. COVENANTS OF GERMAN HOLDING COMPANIES. The Borrower and the US
Holding Company, in their capacities as shareholders or upstream parents of the
German Holding Companies, hereby undertake on behalf of the German Holding
Companies (and as shareholders of the German Holding Companies shall cause the
German Holding Companies to comply with) all matters in this paragraph that are
deemed to be undertaken by the German Holding Companies. In consideration of the
financial accommodation to the Borrower, and so long as any of the Obligations
remain unsatisfied, each Holding Company specifically covenants and agrees with
the Lender as follows:
6.02.01. OWNERSHIP AND ENCUMBRANCES. The Holding Company will
maintain, and will not further encumber, its ownership interest in the German
Holding Companies' Shares that it owns during the term of this Agreement.
6.02.02. DOCUMENTS. The Holding Company will comply with its
obligations under the Share Pledge Agreement.
6.02.03. CAPITALIZATION. The Holding Company will maintain sufficient
capital in order to comply with the laws of Germany.
6.03. COVENANTS OF OPERATING COMPANY. The Borrower and the US Holding
Company, in their capacities as shareholders or upstream parents of the German
Operating Company hereby undertake on behalf of the German Operating Company
(and as shareholders of the German Operating Company shall cause the German
Operating Company to comply with) all matters in this paragraph that are deemed
to be undertaken by the German Operating Company. In consideration of the
financial accommodation to the Borrower, and so long as any of the Obligations
remain unsatisfied, the German Operating Company specifically covenants and
agrees with the Lender as follows: provided, however, that the German Operating
Company may request the Lender's prior written consent to vary or waive any one
or more of the following provisions on one or more occasions, which consent
shall not be unreasonably withheld:
6.03.01. LOANS AND ADVANCES TO OFFICERS. The Operating Company will
not make any loan or advance to any officer, shareholder, director or employee
of the Operating Company or pay any salary to any executive or management
personnel of the Borrower (except for [a] loans or advances made in the ordinary
course of business, [b] reasonable compensation payments that conform to
existing compensation plans and that are approved by the Operating Company's
board of directors or manager, as the case may be and existing loans, if any)
that would have a material adverse affect on the value of the assets of the
Operating Company.
6.03.02. SERVICE AGREEMENTS. Except in the ordinary course of
business, the Operating Company shall not cause service agreements or customer
accounts to be transferred from the Operation Company to the Borrower or to the
Affiliated Companies, which transfers might have the effect (either individually
or in the aggregate) of materially reducing the profitability of the Operating
Company.
6.03.03. DISPOSITION OF ASSETS. The Operating Company shall not sell,
transfer, lease, license or in any way dispose of all material part of the
business, undertaking,
16
property or other assets of the Operating Company, whether by a single
transaction or a series of transactions, related or not.
6.03.04. INTELLECTUAL PROPERTY. Save as part of the normal trading
practice of the Operating Company, the Operating Company shall not enter into
any agreement or other arrangement for the sale, licensing, assignment or
disposal howsoever to any third party of any rights in respect of the
intellectual property owned by the Operating Company.
6.03.05. TYPE OF ACTIVITIES. The Operating Company shall carry out
only the business or related activities of the Operating Company as currently
carried on and not make or permit any material alteration (including cessation)
to the general nature of such business after the date hereof.
6.03.06. ACQUISITION OF ASSETS. The Operating Company shall not enter
into any material contract or any agreement for the acquisition of any assets or
equipment in excess of DM 100,000 for such transactions in any fiscal year.
6.03.07. NEW ENTITIES. The Operating Company shall not create any
subsidiaries or enter into any partnership or joint venture arrangement with any
other Person.
6.03.08. CONTRACTS WITH DIRECTORS. The Operating Company shall not
enter into any transaction, arrangement or agreement (other than [a] in the
ordinary course of business, [b] service agreements and [c] existing contracts,
if any) with or for the benefit of any director of the Borrower, the Affiliated
Companies or the Operating Company or a Person connected with any such director.
6.03.09. REPORTS. The Operating Company shall furnish the Lender (or
his nominee) with:
6.03.09.01. QUARTERLY ACCOUNTS. Quarterly management operating
statements for the Operating Company (no later than 30 days after the end of
each quarter).
6.03.09.02. Annual ACCOUNTS. Annual Accounts of the Operating
Company within 3 months of the end of each year or such further period as the
parties may agree, which accounts shall be audited if required either by the SEC
or by the law of the jurisdiction in which the Operating Company is
incorporated.
6.03.09.03. NOTICE OF MEETINGS. Reasonable notice of all meetings
of the boards of directors of the Operating Company and supply minutes of all
such meetings.
6.03.09.04. OTHER INFORMATION. Such further information as may
from time to time be reasonably required by the Lender (or his nominee) as to
all matters relating to the business, the financial position and the affairs of
the Operating Company.
17
6.03.10. OPERATING BUDGETS. The Operating Company shall not later than
one calendar month before the end of its financial year adopt detailed operating
budgets for the Operating Company in respect of the next financial year of the
Operating Company.
6.03.11. PROFIT SHARE PLANS. The Operating Company shall not establish
any profit sharing, profit related bonus or incentive scheme.
6.03.12. DIVIDENDS AND MANAGEMENT FEES. The Operating Company shall
not pay, make nor declare any dividend or any management fees or other
distributions to its shareholders, the Affiliated Companies, the Borrower or any
other person, firm or partnership under the control of the Borrower or any
subsidiary or holding company thereof in respect of the profits, assets or
reserves of the Operating Company nor enter into any agreement for the same,
unless the Operating Company is profitable as shown by the audited accounts of
the Operating Company and such actions will not result in the Operating Company
making or showing a loss. Nothing that is contained in the foregoing provision
shall prohibit the Operating Company from repaying the principal and interest on
any bona fide loans that are presently owed to , the Affiliated Companies, the
Borrower or any other person, firm or partnership under the control of the
Borrower or any subsidiary or holding company thereof.
6.03.13. SHARE CAPITAL. The Operating Company shall not: (a) make any
increase, reduction or other alteration in the authorized or issued share
capital of the Operating Company; (b) enter into any agreement for the same; (c)
grant any option to subscribe or other right to call for shares of the Operating
Company; (d) issue any securities convertible into shares of the Operating
Company; (e) or enter into any agreement for the same; or (f) repurchase or
redeem any such shares; except as any of the foregoing might be necessary in
order to comply with relevant laws, including, without limitation, legal
capitalization requirements in the country of Germany.
6.03.14. ARTICLES OF ASSOCIATION. No member of the Operating Company
shall make any material alteration to its memorandum or articles of association
unless the same is necessary in order to comply with the laws of the country of
Germany, including, without limitation, changing registered offices or
reflecting new shareholders (in accordance with this Agreement).
6.03.15. INDEMNITY. The Operating Company shall not give any guarantee
or indemnity other than (a) the endorsement of checks for collection in the
ordinary course of business and (b) any guarantees to the Lender in connection
with the Loan.
6.03.16. DEBENTURE. The Operating Company shall not create or issue
any debenture, mortgage, charge or other security on its assets, except to
secure (a) outside borrowings that are permissible under the provisions of
paragraph 6.03.03 hereof; (b) purchase money contracts that are permissible
under the provisions of paragraph 6.03.07; or (c) the Loan pursuant to the
provisions of the Affiliate Pledge Agreement.
6.03.17. LOANS TO AFFILIATES. The Operating Company shall not make any
loans (including loans to Affiliated Companies, to the Borrower or to any of the
Borrower's
18
subsidiaries) other than (a) credit given in the normal course of
trading on the Operating Company's usual terms of trading; (b) loans that are
made when the Operating Company is profitable, as shown by the accounts of the
Operating Company.
6.03.18. CAPITAL COMMITMENT. The Operating Company shall not enter
into any material capital commitment (whether or not on lease, rental agreement
or hire purchase) or any other capital commitment which, when aggregated with
all other capital financial year, becomes or would be material and exceeds, for
the combined German companies, the amount of DM 100,000.
6.03.19. BANK ACCOUNTS. At the request of the Lender, the Operating
Company shall make available to the Lender (or his nominee) monthly statements
of bank accounts of the Operating Company.
6.03.20. DEFAULTS UNDER LOANS. The Operating Company shall not commit
any act of default under the provisions applicable to any loan or debt of the
Operating Company including (but not limited to) default in the repayment of
such loan or debt on the matuity thereof or on the expiration of any grace
period therefor, which default would resulting the loan or debt becoming
prematurely repayable or the security therefor becoming unenforceable.
6.03.21. RECORDS. The Operating Company agrees to keep and maintain at
the Operating Company's principal office, or at such other place as the Lender
may approve, true and complete books and records of accounts in connection with
its operations. The Operating Company will, when reasonably requested so to do,
make available for inspection by duly authorized representatives of the lender
any of its books and records, and will furnish the Lender any information
regarding its business affairs and financial condition within a reasonable time
after written request therefor; provided, however, that the Lender will not
disclose to third parties or disclose any proprietary information or trade
secrets obtained from such inspections.
6.03.22. LEGAL EXISTENCE AND LAWS. The Operating Company will take all
necessary steps to preserve its legal existence; will materially comply with all
applicable present and future Laws and all material agreement(s) to which it is
subject; and will maintain all of its rights, privileges and franchises
necessary in the normal conduct of its business.
6.03.23. ADVERSE MATTERS. The Operating Company will promptly give
written notice to Lender of the occurrence of the following:
6.03.23.01. ADVERSE CONDITIONS. Any condition or event that, with
the giving of notice or passage of time or both, could have a material adverse
effect on the financial condition, business or operations of the Operating
Company, including, without limitation, the commencement or threat of any
action, suit, claim or proceeding against or investigation of the Operating
Company that could materially and adversely affect the Operating Company or that
could impair the Operating Company's ability to perform its obligations under
this Agreement; and
19
6.03.23.02. EVENT OF DEFAULT. Any Event of Default or any event
which with the giving of notice or the lapse of time, or both, would constitute
an Event of Default and the action the Operating Company proposes to take with
respect thereto.
6.03.24. PAYMENT OF TAXES, ETC. The Operating Company shall pay and
discharge, or cause to be paid and discharged, promptly all taxes, assessments
and governmental charges or levies imposed upon it or upon its properties or
upon any part thereof, before the same shall become in default, except those
being contested in good faith and for which reserves or other arrangements that
are reasonably satisfactory to the Lender have been made.
6.03.25. OTHER INDEBTEDNESS. The Operating Company shall promptly pay
and discharge any and all indebtedness, liens, charges, all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any of its properties prior to the date on which penalties
accrue thereon, except those being contested in good faith and for which
reserves or other arrangements that are satisfactory to the Lender have been
made.
6.03.26. INSURANCE. The Operating Company shall, at all times, keep
and maintain insurance to such extent and against such risks as is customary for
companies of comparable size in the same or similar business and property in the
same general area.
6.03.27. SHAREHOLDER EQUITY. The Operating Company shall not take,
allow to be taken or omit to take any action that would reduce or impair the
shareholder equity of the Operating Company that was shown on the Operating
Company's balance sheet as of 31 December 2000.
SECTION 7. DEFAULT.
7.01. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events or defaults, and the failure to cure or remove the same within
the time periods that are set forth in paragraph 7.02 hereof, shall constitute
an event of default ("EVENT OF DEFAULT") hereunder and under the other Loan
Documents:
7.01.01. NOTE. The Borrower or any Affiliated Company shall fail to
pay when due any installment of principal and/or interest, any fee or any other
amount payable hereunder or under the Note.
7.01.02. OBLIGATIONS. The Borrower or any Affiliated Company shall
fail to observe or perform any other Obligation to be observed or performed by
it hereunder or under the Loan Documents.
7.01.03. INSOLVENCY. (a) The Borrower or any Affiliated Company
becomes insolvent, admits its inability to pay its debts as they mature, or
makes an assignment for the benefit of any of its creditors; or (b) upon the
commencement of proceedings in bankruptcy, or for reorganization of the Borrower
or any Affiliated Company (or for the readjustment of any of its debts) under
relevant bankruptcy law (including, without limitation,
20
the U.S. federal bankruptcy code), or under any other laws, whether state or
federal, for the relief of debtors, now or hereafter existing; or (c) the
Borrower or any Affiliated Company applies for or consents to the appointment of
a receiver, trustee, or similar officer for it or for all or any substantial
part of its property or business, or such receiver, trustee or similar officer
is appointed; or (d) any proceedings shall be instituted for the dissolution or
the full or partial liquidation of the Borrower or any Affiliated Company; or
(e) the Borrower or any Affiliated Company shall discontinue business or
materially change the nature of its business.
7.01.04. LOSS OF COLLATERAL. Any money judgment, writ or warrant of
attachment, or similar process is entered or filed against the Borrower, any of
the Collateral or any material portion of the assets of the Borrower and (a)
remains unvacated, unbonded, unstayed, undismissed or undischarged for a period
of thirty (30) days or in any event later than five (5) days before the date of
any proposed sale thereunder (such time periods prevailing over the time periods
that are described in paragraph 7.02 hereof); or (b) the Borrower has not
appealed the same in good faith to the Lender's satisfaction.
7.01.05. DOCUMENTS SUCCESSFULLY CONTESTED. Any stockholder or creditor
of the Borrower or the Affiliated Companies shall maintain a suit or action
contesting the validity or enforceability of the Loan Documents, and such suit
or action shall not be dismissed or otherwise settled within forty-five days
after the date of commencement of the suit or action (such time period
prevailing over the time periods that are described in paragraph 7.02 hereof).
7.01.06. OTHER CREDIT AGREEMENTS. The Borrower shall fail to make any
payment when due under, or shall fail to perform or observe any material term or
covenant contained in, any other credit agreement.
7.01.07. MISREPRESENTATION. Any representation or warranty made by or
on behalf of the Borrower herein or in any Loan Document or made pursuant hereto
or thereto, or otherwise in connection with the transactions contemplated hereby
or thereby, or any report, certificate, financial or other instrument furnished
in connection with this Agreement or any other Loan Document shall prove to be
false or incorrect in any material respect, or omits to state a material fact
required to be stated therein in order to make the statements contained therein,
in the light of the circumstances under which made, not misleading, on the date
made.
7.01.08. ADVERSE CONDITIONS. The condition, financial or otherwise, of
the Borrower shall suffer any material adverse change in the reasonable judgment
of the Lender; or any event shall occur which, in the reasonable judgment of the
Lender, might materially and adversely affect the Borrower's ability to perform
its obligations under the Loan Documents.
7.02. CURE PERIODS. Notwithstanding any provision of the Loan
Documents to the contrary, if any of the defaults or events that are described
in paragraph 7.01 hereof occur, then the Lender shall give the Borrower (and
also any of the Holding Companies whose Collateral is affected by the event or
default) written notice of the occurrence of such event or default. If the
Borrower (or the affected Holding Company) fails to cure such default within the
time periods indicated in this paragraph, or if the event continues after the
expiration of such time periods,
21
then the Lender may immediately, and without further notice to the Borrower or
to any Affiliated Company, exercise its remedies under paragraph 7.03 hereof.
The time periods for cure are as follows:
7.02.01. NOTE DEFAULT. Five days for the failure to pay amounts that
are due under the Note.
7.02.02. OTHER MONETARY DEFAULT. Ten days for the failure to pay any
sum of money that is required to be paid under any of the Loan Documents.
7.02.03. OTHER DEFAULTS. Fifteen days for any other default that is
described in paragraph 7.01.
7.02.04. SPECIFIC CURE PERIODS. Any other cure period that is
specifically set forth in another provision of the Loan Documents and that by
its terms overrides the provisions of this paragraph 7.02.
7.03. ACCELERATION. Upon the occurrence of any Event of Default, all
Obligations shall immediately become due and payable without further action or
written notice of any kind.
7.04. REMEDIES. Upon the occurrence and during the continuance of any Event
of Default, the Lender, at its option, and without notice to the Borrower, may
do one or more of the following, in such order as it may determine:
7.04.01. UCC REMEDIES. The Lender shall have all the rights and
remedies allowed by applicable Laws including, without limitation, the Uniform
Commercial Code as codified in governing state Laws. In that regard, the Lender
may, upon twenty-one (21) days' prior written notice to the Borrower (or a
shorter reasonable period if the Collateral threatens to decline speedily in
value), sell or otherwise dispose of all or part of the Collateral in a
commercially reasonable manner. Out of the proceeds of that sale or other
disposition, the Lender may retain an amount equal to the principal and interest
then due and owing on the Note, together with all of the Lender's expenses of
the sale (including all reasonable legal fees and expenses). The Lender shall
pay any balance of the sale/disposition proceeds to the Borrower. If the
proceeds of the sale/disposition are insufficient to cover the outstanding
principal and interest due under the Note, together with such expenses of the
sale/disposition, the Borrower shall remain liable to the Lender for any
deficiency. At any public sale, the Lender may, of it is the highest bidder,
purchase any or all of the Collateral.
7.04.02. ENFORCEMENT OF SECURITY. The Lender may enforce all or any
portion of any security granted hereunder or under any Loan Document, including,
without limitation, any of the Share Pledge Agreements; Partnership Pledge
Agreement; or, the Security Assignment Agreement
7.04.03. OTHER REMEDIES. The Lender may pursue any other right or
remedy granted under any Loan Document or provided by law or in equity or
otherwise available to the Lender.
22
7.05. NO WAIVER OF REMEDIES. No waiver of any breach of or default under
any provision of any of the Loan Documents shall constitute or be construed as a
waiver by the Lender of any subsequent breach of or default under that or any
other provision of any of the Loan Documents.
7.06. REMEDIES NOT EXCLUSIVE. No remedy herein or in any of the other Loan
Documents conferred upon the Lender is intended to be exclusive of any other
remedy herein or in any other agreement between the parties hereto or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law, in
equity or by statute.
SECTION 8. INDEMNIFICATION.
The Borrower and the German Companies knowingly and voluntarily do hereby
indemnify and hold harmless the Lender (and its agents, employees, attorneys,
successors, assigns and personal representatives) from and against any and all
claims, demands, losses, judgments, damages or liabilities (including, without
limitation, court costs, costs of discovery, expenses and attorney's fees), or
any legal actions in respect thereof, by any person or entity relating to,
directly or indirectly, the following: (a) the making of the Loan by the Lender
to the Borrower; (b) the pledging of the Collateral by the Holding Companies;
(c) the violation of any securities law requirement of any pertinent country or
state, or (e) any other action arising from this transaction.
SECTION 9. GENERAL PROVISIONS.
The following provisions also are an integral part of this Agreement:
9.01. CONSTRUCTION. The provisions of this Agreement shall be in addition
to those of any pledge or security agreement, note or other evidence of
liability held by the Lender in connection with the Loan, all of which shall be
construed as complementary to each other. Nothing herein contained shall prevent
the Lender from enforcing any or all of such other notes or pledge or security
agreements in accordance with their respective terms.
9.02. FURTHER ASSURANCES. From time to time, the parties will execute and
deliver to each other such additional documents and will provide such additional
information as the other party may reasonably require in order to carry out the
terms of this Agreement and be informed of the Borrower's status and affairs.
Without limiting the generality of the foregoing, at the Lender's request, the
German Companies shall modify their respective Affiliate Pledge Agreements so as
to include therein the specific representations and covenants that are made by
such parties under the provisions of articles 4, 5 and 6 and this section 9.02.
9.03. ENFORCEMENT AND WAIVER BY THE LENDER. The Lender shall have the right
at all times to enforce the provisions of the Loan Documents in strict
accordance with the terms hereof and thereof, notwithstanding an conduct or
custom on the part of the Lender in refraining from so doing at any time or
times. The failure of the Lender at any time or times to enforce its rights
23
under such provisions, strictly in accordance with the same, shall not be
construed as having created a custom in any way or manner contrary to specific
provisions of this Agreement or as having in any way or manner modified or
waived the same. All rights and remedies of the Lender are cumulative and
concurrent and the exercise of one right or remedy shall not be deemed a waiver
or release of any right or remedy.
9.04. EXPENSES OF THE LENDER. The Borrower will pay all expenses, including
the reasonable fees and expenses of legal counsel for the Lender, incurred in
connection with the making of the Loan and/or the administration, amendment,
modification or enforcement of the Loan Documents and the collection or
attempted collection of the Note, whether any default is ultimately cured or
whether the Lender is obligated to pursue remedies hereunder, including such
fees and expenses incurred before legal action, during the pendency of legal
action, and continuing to all such fees and expenses in connection with any
appeal to higher courts arising out of transactions associated herewith. The
rights of the Lender hereunder shall survive the termination of this Agreement.
9.05. NOTICES. Any notices, consents or other communications required or
permitted by this Agreement shall be in writing and shall be deemed received
either (a) upon personal delivery or actual receipt thereof; (b) within two (2)
days after such notice is deposited in the United States Mail, first-class
postage prepaid and certified and addressed to the parties at the following
addresses; or (c) the next business day after deposit with an overnight delivery
service addressed to the parties at the following addresses:
9.05.01 If to the Borrower:
ALPNET, INC.
0000 X. Xxxxxxxx Xx., Xxxxx #000
Xxxx Xxxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxx
10.05.02. If to the Lender:
XXXXXXX X. XXXXXXXXX, XX
00000 Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
or to such other address(es) as any party may designate in writing.
9.06. APPLICABLE LAW. The substantive laws of (a) the Sate of California,
or (b) at the Lender's sole option, the State of Utah, shall govern the
construction of this Agreement and the rights and remedies of the parties
hereto. In that regard, the parties expressly submit themselves to the
jurisdiction of (y) California State courts and/or the United States District
Court for the Central District of California (if the Lender elects California
law); or (z) Utah State courts and/or
24
the United States District Court for the District of Utah, Central Division (if
the Lender elects Utah law), in any action or proceeding arising out of this
Agreement. The Borrower acknowledges that the foregoing provision is a material
inducement to the Lender to make the Loan.
9.07. BINDING EFFECT, ASSIGNMENT AND ENTIRE AGREEMENT. This Agreement shall
inure to the benefit of, and shall be binding upon, the respective successors
and permitted assigns of the parties hereto. The Borrower has no right to assign
any of its rights or delegate any of its obligations hereunder without the prior
written consent of the Lender. This Agreement, and the documents executed and
delivered pursuant hereto, constitute the entire agreement between the parties
relating to the Loan, and may be amended only by a writing signed on behalf of
each party.
9.08. SEVERABILITY. If any provision of this Agreement shall be held
invalid under any applicable Laws, then such invalidity shall not affect any
other provision of this Agreement that can be given effect without such invalid
provision and, to that end, the provisions hereof are severable.
9.09. TIME OF ESSENCE. Time is the essence hereof.
9.10. MISCELLANEOUS. Any request made or consent given hereunder at any
time by the then holder of the Note shall be binding on any transferee of the
Note. The singular of any term used in this Agreement or in any of the other
documents mentioned herein or contemplated hereby shall include the plural as
appropriate. The use of any gender hereunder shall include the other genders as
appropriate.
9.11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. Copies of original
counterpart signature pages that are transmitted to the other party by facsimile
telecopier, which are then followed by delivery of the original counterpart
signature page pursuant to the provisions of paragraph 9.05 hereof, shall be
deemed to be fully executed and delivered.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
"BORROWER"
ATTEST: ALPNET, INC.,
a Utah corporation
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------------- -------------------------------
Xxxxx X. Xxxxxx Xxxx X. Xxxxxxx
Secretary Vice President Finance
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"LENDER"
/s/ Xxxxxxx X. Xxxxxxxxx, XX
-------------------------------
Xxxxxxx X. Xxxxxxxxx, XX
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