EXHIBIT 10.5
LOAN AGREEMENT
This LOAN AGREEMENT ("Agreement"), dated as of February 23, 1999, is by
and between NA ACQUISITION CORP., a Pennsylvania corporation (the "Borrower")
and ARTRA GROUP INCORPORATED, a Pennsylvania corporation (the "Lender").
RECITALS
A. The Borrower and WorldWide Web NetworX Corporation, a Delaware
corporation ("WWWX," and as hereinafter provided, the "Guarantor") are parties
to an Acquisition Agreement dated on or about the date hereof (the "Acquisition
Agreement"), pursuant to which the Borrower has agreed to acquire from WWWX, and
WWWX has agreed to transfer to the Borrower, certain Assets (as hereinafter
defined).
B. The Lender, the Borrower, and WWWX are parties to an Agreement and
Plan of Merger of even date herewith (the "Merger Agreement"), pursuant to which
WWWX Merger Subsidiary, Inc., a wholly owned subsidiary of the Borrower, will
merge into the Lender (the "Merger").
C. Concurrently with the execution and delivery of the Merger
Agreement, the Lender has agreed to provide certain credit facilities to the
Borrower, for the purposes and on the terms and conditions hereinafter set
forth. This Agreement is the "Loan Agreement" referenced in the recitals to the
Merger Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the following meanings in this
Agreement:
"Acquisition Agreement" shall have the meaning given that term in the
Recitals, and shall include all exhibits, amendments, modifications, and
supplements thereto as may be in effect from time to time.
"Agreement" shall mean this Loan Agreement, together with all exhibits,
amendments, modifications, and supplements hereto as may be in effect from time
to time.
"AsseTrade" shall mean XxxxXxxxx.xxx, Inc., a Delaware corporation.
"AsseTrade Common Stock" shall mean the shares of common stock of
AsseTrade included in the Assets acquired by the Borrower from WWWX pursuant to
the Acquisition Agreement, which shares constitute 25% of the issued and
outstanding shares of voting common stock of AsseTrade.
"Assets" shall mean all of the assets acquired by the Borrower from
WWWX pursuant to the Acquisition Agreement, including without limitation the
BarterOne Assets and the AsseTrade Common Stock.
"BarterOne" shall mean BarterOne, LLC, a Delaware limited liability
company which has been or will be dissolved by WWWX prior to the Merger.
"BarterOne Assets" shall mean all of the assets which were owned by
BarterOne prior to its dissolution by WWWX, and which are being acquired by the
Borrower from WWWX pursuant to the Acquisition Agreement, including without
limitation the worldwide, perpetual licensing rights to the ORBIT System
Software (On-Line Reciprocal Business and Inventory Transaction System), an
electronic commerce system to be used as a transaction tool over the internet.
"Closing" shall mean the execution and delivery to the Lender of all of
the documents, instruments, and agreements required by the terms of this
Agreement, and the delivery to the Borrower of the initial Loan proceeds.
"Closing Date" shall mean the date on which the Closing takes place.
"Collateral" shall mean the Assets and any and all other property of
the Borrower (whether real or personal), in which a lien or security interest
has been granted to the Lender, pursuant to any of the Loan Documents and all
amendments, modifications, exhibits and schedules to any of the foregoing as may
be in effect from time to time.
"Default" shall mean the occurrence of any fact, condition or event
which with the giving of notice or lapse of time, or both, without cure, would
be an Event of Default.
"entrade" shall mean any entity now or hereafter created by the
Borrower to conduct the entrade Business.
"entrade Business" shall mean the business operations of the Borrower
related to the BarterOne Assets, whether conducted through a wholly owned
subsidiary of the Borrower or otherwise.
"entrade Interest" shall mean the Borrower's shares of capital stock,
membership interests, or other equity interests in entrade.
"Event of Default" shall have the meaning given such term in Article VI
of this Agreement.
"Guaranty" shall mean the Guaranty between WWWX and the Lender, dated
as of the date of this Agreement, in form and substance satisfactory to the
Lender, by which the Guarantor agrees to guarantee and act as surety for the
Obligations.
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"Guarantor" shall mean WWWX, as guarantor under the Guaranty.
"Loan" shall have the meaning given such term in Section 2.1 of this
Agreement.
"Loan Documents" shall mean this Agreement, the Note, the Pledge
Agreement, the Security Agreement, the Guaranty, and all other agreements,
amendments, modifications, restatements, certificates, financing statements,
schedules, reports, notices, and exhibits now or hereafter executed or delivered
in connection with any of the foregoing, as may be in effect from time to time.
"Merger Agreement" shall have the meaning given that term in the
Recitals, and shall include all exhibits, amendments, modifications, and
supplements thereto as may be in effect from time to time.
"Note" shall have the meaning given such term in Section 2.5 of this
Agreement.
"Obligations" shall mean the obligations of the Borrower to pay the
principal, any interest and any other liabilities of the Borrower under this
Agreement and the other Loan Documents in accordance with the terms thereof.
"Pledge Agreement" shall mean the pledge agreement between the Borrower
as pledgor and the Lender as pledgee, dated as of the date of this Agreement, in
form and substance satisfactory to the Lender, by which the Borrower pledges the
Pledged Securities to the Lender.
"Pledged Securities" shall mean the AsseTrade Common Stock and (if
applicable) the entrade Interest.
"Security Agreement" shall mean the security agreement between the
Borrower and the Lender, dated as of the date of this Agreement, in form and
substance satisfactory to the Lender, pursuant to which the Borrower grants to
the Lender a first priority lien and security interest in the Assets and any and
all other property now or hereinafter owned by the Borrower, including without
limitation the Borrower's Accounts, Chattel Paper, Contracts, Documents,
Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory,
Investment Property and Proceeds, as such terms are defined in the Uniform
Commercial Code enacted in the Commonwealth of Pennsylvania ("UCC").
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ARTICLE II
CREDIT ACCOMMODATIONS
2.1 Loan. Subject to the terms and conditions hereof and in reliance on
the representations and warranties made by the Borrower and/or WWWX in this
Agreement, the Guaranty and the Merger Agreement, the Lender agrees to lend to
the Borrower up to $2,000,000 (the "Loan"). The Borrower agrees to use the
proceeds of the Loan only for the following purposes:
(a) $800,000 shall be used to fund a portion of the cash
purchase price for the Assets payable to WWWX under the terms of the Acquisition
Agreement; and
(b) the balance shall be used to fund the working capital
needs of the entrade Business.
2.2 Disbursement of Loan Proceeds. At the Closing the Lender shall make
an initial disbursement of the Loan proceeds to the Borrower in the amount of
$800,000, to fund the cash payment to WWWX as set forth in section 2.1(a), plus
$600,000, to fund the working capital needs of the entrade Business during the
first 90 days following the Closing Date, for an aggregate initial disbursement
of $1,400,000. If at the end of the aforesaid 90 day period (a) closing under
the Merger Agreement has not occurred, and the Merger Agreement has not been
otherwise terminated, (b) no Default has occurred and is continuing under this
Agreement or any of the other Loan Documents, and (c) the Borrower has made a
written request for additional funds (collectively, the "Conditions to
Subsequent Disbursements"), then upon receipt of such notice the Lender shall
promptly make a second disbursement of the Loan proceeds to the Borrower in the
amount of $200,000, to fund the working capital needs of the entrade Business
for the following 30 days. The Lender shall thereafter make up to two additional
disbursements of $200,000 each, at the end of the aforesaid 30 day period and at
the end of the next succeeding 30 day period, provided that in each such
instance the Conditions to Subsequent Disbursements have been met at such time.
In no event shall the advances of Loan proceeds hereunder at any time exceed
$2,000,000 in the aggregate, plus accrued interest.
2.3 Payments. Except as otherwise provided in Section 6.5 of the Merger
Agreement, the entire outstanding principal balance of the Loan shall be due and
payable in one lump sum payment on that date (the "Maturity Date") which is the
earlier to occur of (a) the "Closing Date" defined in the Merger Agreement, or
(b) the date on which the Merger Agreement is otherwise terminated and the
Merger abandoned. Payment shall be by wire transfer of good funds to such
account or accounts as the Lender shall by notice in writing advise the
Borrower.
2.4 Interest. During the period from the Closing Date through the
Maturity Date, the Loan shall bear interest at the applicable Federal rate,
which shall accrue monthly and be added to the principal balance. After the
occurrence and during the continuance of an Event of Default, interest on the
outstanding principal balance of the Loan shall accrue and be payable, on
demand,
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at a per annum rate (the "Default Rate") equal to the lesser of (a) twelve
percent (12%) per annum, or (b) the maximum rate of interest permissible under
applicable laws.
2.5 Note. The obligations of the Borrower to repay the aggregate
outstanding principal under the Loan and to pay accrued interest thereon shall
be evidenced by a promissory note of the Borrower (the "Note"), in form and
substance satisfactory to the Lender, to be executed and delivered to the Lender
concurrently with the execution and delivery of this Agreement.
2.6 Prepayment. The Borrower shall be permitted to make prepayments
with respect to the Loan without premium or penalty.
2.7 Collateral Security. (a) As security for the prompt payment,
performance, satisfaction and discharge when due of all the Obligations, the
Borrower shall execute and deliver or shall cause to be executed and delivered
to the Lender, concurrently with the execution of this Agreement, the Pledge
Agreement, the Security Agreement, and such other documents and agreements as
may be required to perfect a first-priority lien and security interest in the
Assets, the Pledged Securities, and any and all other assets of the Borrower, in
favor of the Lender.
(b) Notwithstanding the foregoing, it is acknowledged and agreed by the
Lender that, following the Closing, the Borrower may transfer the BarterOne
Assets to entrade. The Lender hereby consents to the aforesaid transfer,
provided that: (i) entrade shall take title to the BarterOne Assets under and
subject to the Lender's first priority lien and security interest therein, and
shall execute and deliver to the Lender such UCC financing statements and other
documents as may be required to assure the continued perfection of the Lender's
security interest therein, and (ii) the entrade Interest shall be pledged to the
Lender under the terms and conditions of the Pledge Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
In order to induce the Lender to execute and deliver this Agreement and
to make the Loan available to the Borrower, the Borrower represents and warrants
to the Lender that, as of the date hereof:
3.1 Organization and Good Standing. The Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania, and is duly licensed or qualified to do business
as a foreign corporation and is in good standing under the laws of any other
state of the United States in which the character of its properties or in which
the transaction of its business makes such qualification necessary, except where
the failure to be so qualified or to be in good standing would not have a
material adverse effect on its financial condition.
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3.2 Authorization, Validity and Effect of Loan Documents. The Borrower
has the requisite corporate power and authority to execute and deliver this
Agreement and the other Loan Documents. The consummation by the Borrower of the
transactions described herein has been duly authorized by all requisite
corporate action, and neither the execution and delivery of this Agreement nor
the consummation of the transactions described herein by the Borrower
constitutes a violation or breach of applicable law or any contract or
instrument to which the Borrower is a party or by which it is bound, or any
order, writ, injunction, decree or judgment applicable to it, or constitutes a
default (or would but for the giving of notice or lapse of time or both,
constitute a default) under any contract or instrument to which the Borrower is
a party or by which it is bound, or conflicts with or violates any provision of
the Articles of Incorporation or By-Laws of the Borrower. Without limiting the
generality of the foregoing provisions, the execution and delivery by the
Borrower of this Agreement and the other Loan Documents and the consummation of
the transactions described herein and therein will not, to the Borrower's
knowledge, (i) result in a violation or default or give to any other person any
rights, including rights of termination, cancellation or acceleration under any
applicable law, rule or regulation, any agreement, instrument or policy to which
the Borrower is a party or may be bound, (ii) result in any judgment, order,
injunction, decree or ruling of any court or governmental authority to which the
Borrower is a party or subject or (iii) require any authorization, consent,
approval, exemption or other action by any court or administrative or
governmental body which has not been obtained or any notice to or filing with
any court or administrative or governmental body which has not been given or
done. This Agreement has been duly executed and delivered by the Borrower and
constitutes the valid and binding obligation of the Borrower enforceable in
accordance with its terms.
3.3 Pending Litigation. There are no actions, suits, proceedings or
investigations pending, or, to the knowledge of the Borrower, threatened against
or affecting the Borrower before any court, arbitrator or administrative or
governmental body which, in the aggregate, would reasonably be expected to
adversely affect any action taken or to be taken by the Borrower under this
Agreement and the other Loan Documents or which, in the aggregate, would
reasonably be expected to materially adversely affect the properties or
financial position of the Borrower, or the ability of the Borrower to perform
its obligations under this Agreement and the other Loan Documents.
3.4 Title to Collateral. The Borrower owns outright, and has good and
marketable title to, all of the Collateral free and clear of all liens, pledges,
mortgages, security interests, conditional sales contracts or other encumbrances
or conflicting claims of any nature whatsoever, except as otherwise disclosed in
the Acquisition Agreement.
3.5 No Untrue Statements. To the Borrower's knowledge, neither this
Agreement, the Loan Documents nor any other document, certificate or statement
furnished or to be furnished by the Borrower or by any other party to the Lender
in connection herewith contains, or at the time of delivery will contain, any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained herein and therein not
misleading.
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ARTICLE IV
CONDITIONS PRECEDENT TO THE LENDER'S OBLIGATIONS
As a condition precedent to the Lender's obligations hereunder, the
Borrower shall deliver or cause to be delivered to the Lender at the Closing the
following:
(a) This Agreement, duly executed by the Borrower;
(b) The Note, duly executed by the Borrower;
(c) The Security Agreement, duly executed by the Borrower;
(d) The Pledge Agreement, duly executed by the Borrower;
(e) The Guaranty, duly executed by WWWX;
(f) Such other documents, instruments, and agreements as
the Lender may reasonably request
ARTICLE V
AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower hereby covenants and agrees that from the Closing Date
until satisfaction in full of the Obligations, unless the Lender shall otherwise
consent in writing, the Borrower shall do the following:
5.1 Use of Proceeds. Use the proceeds of the Loan for the purposes
specified in Section 2.1 of this Agreement.
5.2 Taxes. Pay all taxes, assessments, charges and levies imposed upon
it or on any of its property (including the Collateral) as and when due, and
provide evidence of payment thereof to the Lender if the Lender so requests,
except where contested in good faith by lawful and appropriate proceedings.
5.3 Notice of Litigation or other Proceedings. Give prompt notice to
the Lender of: (a) the existence of any dispute, (b) the institution of any
litigation, administrative proceeding or governmental investigation involving
the Borrower or (c) the entry of any judgment, decree or order against or
involving the Borrower, any of which would materially and adversely affect the
financial condition or property (including the Collateral) of the Borrower or
affect the enforceability of this Agreement or any of the other Loan Documents.
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5.4 Notice of Events of Default. Give prompt notice to the Lender if
the Borrower becomes aware of the occurrence of any Default or Event of Default
hereunder or under the Merger Agreement.
5.5 Further Actions. At the Borrower' own expense, cooperate and join
with the Lender in taking all such further actions as the Lender, in its sole
judgment, shall deem necessary to effectuate the provisions of the Loan
Documents.
ARTICLE VI
EVENTS OF DEFAULT
An event of default ("Event of Default") under this Agreement shall be
deemed to exist if any one or more of the following events occurs and is
continuing, whatever the reason therefor:
6.1 Borrower' Failure to Pay. The Borrower fails to pay any amount of
principal, interest, or other sums as and when due to the Lender under this
Agreement or any of the Loan Documents, whether upon stated maturity,
acceleration, or otherwise.
6.2 Breach of Covenants or Conditions. The Borrower fails to perform or
observe any other material, term, covenant, agreement or condition in this
Agreement or any of the other Loan Documents, and has not remedied and fully
cured such non-performance, non-observance, violation of or non-compliance
within thirty (30) days after the earlier of (a) the date that the Borrower has
knowledge of such violation, or (b) the date that the Borrower has written
notice thereof from the Lender.
6.3 Defaults in Other Agreements. The Borrower fails to perform or
observe any material term, covenant, agreement or condition contained in, or
there shall occur any material default under or as defined in, (a) any other
agreement applicable to the Borrower or by which it is bound which shall not be
remedied within the period of time (if any) within which such other agreement
permits such default to be remedied, unless such default is waived in writing by
the other party thereto or excused as a matter of law; or (b) any agreement the
Borrower has with the Lender, including without limitation the Merger Agreement.
6.4 Agreements Invalid. The validity, binding nature of, or
enforceability of any material term or provision of any of the Loan Documents is
disputed by, on behalf of, or in the right or name of the Borrower or any
material term or provision of any such Loan Document is found or declared to be
invalid, avoidable, or non-enforceable by any court of competent jurisdiction.
6.5 False Warranties; Breach of Representations. Any warranty or
representation made by the Borrower and/or WWWX in this Agreement, the Merger
Agreement, the Guaranty or any other Loan Document or in any certificate or
other writing delivered under or pursuant to this Agreement or any other Loan
Document, or in connection with any provision of this Agreement or
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related to the transactions described herein shall prove to have been false or
incorrect or breached in any material respect on the date as of which made.
6.6 Judgments. A final judgment or judgments is entered, or an order or
orders of any judicial authority or governmental entity is issued against the
Borrower (such judgment(s) and order(s) hereinafter collectively referred to as
("Judgment"): (a) for payment of money, which Judgment, in the aggregate would
have a material adverse effect on the financial condition of the Borrower or (b)
for injunctive or declaratory relief which would have a material adverse effect
on the financial condition of the Borrower, and such Judgment is not discharged
or execution thereon or enforcement thereof stayed pending appeal, within thirty
(30) days after entry or issuance thereof, or, in the event of such a stay, such
Judgment is not discharged within thirty (30) days after such stay expires.
6.7 Bankruptcy or Insolvency.
(a) Either the Borrower or the Guarantor becomes insolvent, or
generally fails to pay, or is generally unable to pay, or admits in writing its
inability to pay, its debts as they become due or applies for, consents to, or
acquiesces in, the appointment of a trustee, receiver or other custodian, as the
case may be, of a substantial part of its property, or makes a general
assignment for the benefit of creditors.
(b) Either the Borrower or the Guarantor commences any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any state or federal bankruptcy or insolvency law, or any dissolution or
liquidation proceeding.
(c) Any bankruptcy, reorganization, debt arrangement, or other
case or proceeding under any state or federal bankruptcy or insolvency law, or
any dissolution or liquidation proceeding, is involuntarily commenced against or
in respect of either the Borrower or the Guarantor, and such involuntary case or
proceeding shall remain undismissed and unstayed for a period of sixty (60)
days, or an order for relief is entered in any such case or proceeding.
(d) A trustee, receiver, or other custodian is appointed for
either the Borrower or the Guarantor of a substantial part of its property.
ARTICLE VII
REMEDIES
7.1 Acceleration; Setoff.
(a) Automatically upon the occurrence of any Event of Default
described in Section 6.7 of this Agreement, and in the sole discretion of the
Lender upon the occurrence of any other Event of Default, the unpaid principal
balance of the Loan, all interest accrued and unpaid thereon (if any), and all
other amounts and Obligations payable by the Borrower under this
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Agreement and the other Loan Documents shall immediately become due and payable
in full, all without protest, presentment, demand, or further notice of any kind
to the Borrower, all of which are expressly waived by the Borrower;
(b) Upon the occurrence of any one or more Events of Default,
the Lender may proceed to protect and enforce its rights under this Agreement
and the other Loan Documents by exercising such remedies as are available to the
Lender in respect thereof under applicable law, either by suit in equity or by
action at law, or both, whether for specific performance of any provision
contained in this Agreement or any of the other Loan Documents or in aid of the
exercise of any power granted in this Agreement or any of the other Loan
Documents; and
(c) The Borrower waives and releases any right to require the
Lender to collect any of the Obligations from any item of its assets and
properties under any theory of marshaling of assets, or otherwise, and
specifically authorizes the Lender to apply any proceeds of such assets and
properties ("Proceeds") against any of the Obligations in any manner that the
Lender may determine.
(d) The Lender shall apply all Proceeds first, to the payment
of the reasonable costs and expenses incurred by the Lender in connection with
collection; second, in payment of the Obligations evidenced by the Note
(including any interest thereon) or any extension, renewal, refinancing or
refunding thereof, first to interest and then to principal; and third, in
payment of Obligations (including interest thereon) other than those described
above; and
(e) If such Proceeds are insufficient to pay all of the
foregoing and any other amounts required by law, the Borrower shall be liable
for any deficiency.
ARTICLE VIII
MISCELLANEOUS
8.1 Remedies Cumulative; No Waiver. The rights, powers and remedies of
the Lender provided in this Agreement and the other Loan Documents are
cumulative and not exclusive of any right, power or remedy provided by law or
equity, and no failure or delay on the part of the Lender in the exercise of any
right, power, or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power, or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy.
8.2 Notices. Every notice and communication under this Agreement or any
of the other Loan Documents shall be in writing and shall be given by either (a)
hand-delivery, (b) first class mail (postage prepaid), (c) reliable overnight
commercial courier (charges prepaid), or (d) telecopy or other means of
electronic transmission, if confirmed promptly by any of the methods specified
in clauses (a), (b) and (c) of this sentence, to the addresses for notices to
the parties set forth in the Merger Agreement. Notice given by telecopy or other
means of electronic transmission shall be deemed to have been given and received
when sent if sent on a business day, otherwise on the next business day
immediately thereafter. Notice by overnight courier shall be deemed to have been
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given and received on the date scheduled for delivery. Notice by mail shall be
deemed to have been given and received three (3) calendar days after the date
first deposited in the United States Mail. Notice by hand delivery shall be
deemed to have been given and received upon delivery. A party may change its
address by giving written notice to the other party as specified herein.
8.3 Survival of Covenants. This Agreement and all covenants,
agreements, representations and warranties made herein and in any certificates
delivered pursuant hereto shall survive the making of the Loan and the execution
and delivery of the Note and shall continue in full force and effect until all
of the Obligations have been fully paid, performed, satisfied and discharged.
8.4 Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts and by the different parties on separate counterparts.
Each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement.
8.5 Headings. The headings of sections have been included herein for
convenience only and shall not be considered in interpreting this Agreement.
8.6 Judicial Proceedings. Each party to this Agreement agrees that any
suit, action or proceeding, whether claim or counterclaim, brought or instituted
by any party hereto or any successor or assign of any party, on or with respect
to this Agreement or the dealings of the parties with respect hereto, shall be
tried only by a court and not by a jury. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH
SUIT, ACTION OR PROCEEDING. Further, each party waives any right it may have to
claim or recover, in any such suit, action or proceeding, any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. THE BORROWER ACKNOWLEDGES AND AGREES THAT THIS
SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE LENDER
WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION
WERE NOT A PART OF THIS AGREEMENT.
8.7 Governing Law. This Agreement shall be construed in accordance with
and governed by the internal laws of the Commonwealth of Pennsylvania.
8.8 Integration. This Agreement, together with the Merger Agreement and
the other Loan Documents constitute the sole agreement of the parties with
respect to the subject matter hereof and thereof and supersede all oral
negotiations and prior writings with respect to the subject matter hereof and
thereof.
8.9 Amendment and Waiver. No amendment of this Agreement, and no waiver
of any one or more of the provisions hereof shall be effective unless set forth
in writing and signed by the parties hereto. Any such waiver, consent or
approval shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on the Borrower in any case shall
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entitle the Borrower to any other or further notice or demand in the same,
similar or other circumstances.
8.10 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto; provided however, that the Borrower shall not assign this Agreement, or
any rights or duties arising hereunder, without the express prior written
consent of the Lender, which consent shall not be unreasonably withheld.
8.11 Severability of Provisions. Any provision in this Agreement that
is held to be inoperative, unenforceable, voidable, or invalid in any
jurisdiction shall, as to that jurisdiction, be ineffective, unenforceable, void
or invalid without affecting the remaining provisions in any other jurisdiction,
and to this end the provisions of this Agreement are declared to be severable.
8.12 Consent to Jurisdiction and Service of Process. The Borrower
hereby consents that any action or proceeding against it be commenced and
maintained in any court within the Commonwealth of Pennsylvania or in the United
States District Court for the Eastern District of Pennsylvania by service of
process on any officer of the Borrower or by mailing a copy of the summons and
complaint by certified mail, return receipt requested, to the address of the
Borrower; and the Borrower hereby agrees that the courts of the Commonwealth of
Pennsylvania and the United States District Court for the Eastern District of
Pennsylvania shall have jurisdiction with respect to the subject matter hereof
and the person of the Borrower. Notwithstanding the foregoing, the Lender, in
its absolute discretion may also initiate proceedings in the courts of any other
jurisdiction in which the Borrower may be found or in which any of its
properties may be located.
8.13 Indemnification.
(a) If, after receipt of any payment of all or any part of the
Obligations, the Lender is compelled to surrender such payment to any person or
entity for any reason (including, without limitation, a determination that such
payment is void or voidable as a preference or fraudulent conveyance, an
impermissible setoff, or a diversion of trust funds), then this Agreement and
the other Loan Documents shall continue in full force and effect, and the
Borrower shall be liable for, and shall indemnify, defend and hold harmless the
Lender with respect to the full amount so surrendered.
(b) The provisions of this Section shall survive the
termination of this Agreement and the other Loan Documents and shall be and
remain effective notwithstanding the payment of the Obligations, the
cancellation of the Note, or any other action which the Lender may have taken in
reliance upon its receipt of such payment. Any cancellation of the Note, or
other such action shall be deemed to have been conditioned upon any payment of
the Obligations having become final and irrevocable.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed on the date first above written.
ATTEST: NA ACQUISITION CORP.
By: __________________________ By: ____________________
Title: Title:
ARTRA GROUP INCORPORATED
By: ____________________
Title:
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