EXHIBIT 10.36
EXECUTION COPY
AMENDED AND RESTATED TERM CREDIT AGREEMENT
THIS TERM CREDIT AGREEMENT (this "Agreement") is made and entered into
as of June 22, 2006, by and between STONEPATH HOLDINGS (HONG KONG) LIMITED
("Borrower") and SBI BRIGHTLINE, a Delaware limited liability company,
("Lender"). This Agreement amends and restates that certain Term Credit
Agreement, dated as of June 19, 2006, by and between the parties, in its
entirety.
WITNESSETH:
WHEREAS, Lender desires to make a Term Loan to Borrower, and Borrower
desires to borrow from Lender the amount of such Term Loan, subject to and in
accordance with the terms and conditions set forth herein, and in the Term Note
agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the delivery,
receipt, and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Business Day" means a day (a) other than Saturday or Sunday, and (b)
on which commercial banks are open for business in New York, New York, and Los
Angeles, California.
"Closing Date" means the date each of the conditions precedent set
forth in SECTION 5 hereof is fully satisfied.
"Dollars" and "$" means the lawful currency of the United States of
America.
"Event of Default" has the meaning set forth in SECTION 7.
"Interest Rate" has the meaning set forth in SECTION 2(c).
"Maturity Date" has the meaning set forth in SECTION 2(b).
"Note" has the meaning set forth in SECTION 2(d).
"Person" means an individual, corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization or any other
juridical entity.
"Term Loan" has the meaning set forth in SECTION 2(a).
2. Amount and Terms of the Term Loan.
(a) Term Loan Advance. Subject to the terms and conditions of
this Agreement, Lender hereby agrees to make a loan to Borrower (the "Term
Loan") on the Closing Date in the principal amount of FOUR MILLION U.S. DOLLARS
(U.S.$4,000,000), which amount may be repaid at any time prior to the Maturity
Date without premium or penalty, but may not be reborrowed once repaid.
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(b) Term. All unpaid principal and accrued but unpaid interest
of the Term Loan shall, subject to subsection (c) below, be payable in full on
June 19, 2008 (the "Maturity Date").
(c) Interest Rate and Interest Payments. Borrower shall pay,
interest on the unpaid principal amount of the Term Loan from the Closing Date
until the Maturity Date, at a rate equal to ten percent (10.0%) per annum on a
basis of a 360 day year (the "Interest Rate"). Subject to Section 2(e) and 2(g)
below, interest on the outstanding principal amount of the Term Loan shall be
due and payable to Lender, monthly in arrears, on the last Business Day of each
calendar month, commencing on the first of such dates following, the Closing
Date until the Maturity Date, at which time all accrued but unpaid interest
shall be due and payable.
(d) Promissory Note. The Term Loan shall be evidenced by a
promissory note (the "Note") in the form of Exhibit "A" attached hereto, duly
executed and delivered to Lender by Borrower.
(e) Interest on Event of Default. Upon the occurrence and
during the continuance of an Event of Default, Borrower agrees to pay interest
on the entire unpaid principal amount of the Term Loan, as well as on any
interest or other amount past due, from the date of such Event of Default until
the date the same is cured in full, payable on demand, at a fluctuating rate per
annum equal at all times to the Interest Rate plus three percent (3.0%).
(f) Manner of Payment. All payments of principal or interest
hereunder or under the Note shall be made in United States dollars and delivered
to Lender in immediately available funds on the date due at such place as Lender
may from time to time designate.
(g) Limitation on Interest Rate. In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder and
charged or collected by Lender or any holder of the Note exceed the highest rate
permissible under any law which a court of competent jurisdiction shall, in a
final determination, deem applicable hereto. In the event that such a court
determines that Lender has charged or received interest hereunder or under the
Note in excess of the highest applicable rate, the rate in effect hereunder and
under the Note shall automatically be reduced to the maximum rate permitted by
applicable law and Lender shall apply all interest paid in excess of the maximum
lawful rate to the principal balance of the amounts outstanding hereunder and
under the Note. It is the intent of the parties hereto that Borrower not pay or
contract to pay, and that Lender not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Borrower to Lender under applicable law.
3. Representations and Warranties. In order to induce Lender to enter
into this Agreement and to make the Term Loan contemplated hereunder, Borrower
hereby represents and warrants to Lender as follows:
(a) Legal Status. Borrower is a corporation duly incorporated,
validly existing, and in good standing under the laws of Hong Kong. Borrower is
qualified or licensed to do business, and is in good standing as a foreign
corporation in all jurisdictions in which such
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qualification or licensing is required or in which the failure to so qualify or
to be so licensed could have a material adverse effect on Borrower.
(b) Authorization and Validity. This Agreement and the Note
have been duly authorized, and upon their execution and delivery in accordance
with the provisions hereof and thereof will constitute legal, valid and binding
agreements and obligations of Borrower, enforceable in accordance with their
respective terms.
(c) No Conflict. The execution, delivery, and performance by
Borrower of this Agreement and the Note do not and will not conflict with the
terms of the Certificate of Incorporation or bylaws of Borrower, violate any
provision of any judgment, decree or order of any court or governmental
authority by which Borrower is bound, or any provision of any law or regulation
applicable to Borrower, or result in a breach of or constitute a default under
any contract, obligation, indenture, or other instrument to which Borrower is a
party or by which Borrower may be bound.
(d) No Consents. The execution, delivery, and performance by
Borrower of this Agreement and the Note do not and will not require any
authorization, approval, or other action by, or notice to or filing with, any
governmental authority, regulatory body, or any other person or entity.
(e) Use of Proceeds. No proceeds of the Term Loan will be used
to acquire any equity security of a class that is registered pursuant to Section
12 of the Securities Exchange Act of 1934, as amended. Borrower shall use TWO
MILLION U.S. DOLLARS (U.S.$2,000,000) of the Term Loan to satisfy in full
Borrower's debts and obligations under (i) the Term Credit Agreement by and
between Borrower, Hong Kong League Central Credit Union and SBI Advisors, LLC, a
California limited liability company, dated October 27, 2004, and as amended on
October 26, 2005, and the note in the principal amount of ONE MILLION U.S.
DOLLARS (U.S.$1,000,000) issued in connection therewith, (ii) the Term Credit
Agreement by and between Borrower, Hong Kong League Central Credit Union and SBI
Advisors, LLC, a California limited liability company, dated February 17, 2006
and the note in the principal amount of FIVE HUNDRED THOUSAND U.S. DOLLARS
(U.S.$ 500,000) issued in connection therewith, and (iii) the Term Credit
Agreement by and between Borrower, Curried Clover, LLC and SBI Advisors, LLC,
dated February 17, 2006 and the note in the principal amount of FIVE HUNDRED
THOUSAND U.S. DOLLARS (U.S.$500,000) issued in connection therewith. The other
TWO MILLION U.S. DOLLARS (U.S.$2,000,000) of the Term Loan shall be new working
capital to be used by Borrower as Borrower deems fit.
(f) Margin Stock. Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation G or U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of the Term Loan will be used to purchase or
carry any margin stock or extend credit to others for the purpose of purchasing
or carrying any margin stock, or be used for any purpose which violates or is
inconsistent with the provisions of Regulation X of said Board of Governors.
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4. Covenants. Borrower hereby covenants that until all amounts
outstanding hereunder and under the Note have been indefeasibly paid in full, it
shall:
(a) Punctual Payments. Punctually pay the interest and
principal with respect to the Term Loan as provided herein and in the Note.
(b) Existence. Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its existence and comply with
the provisions of all documents pursuant to which it is organized and/or which
govern its continued existence; maintain all licenses, permits, governmental
approvals, rights, privileges, and franchises necessary for the conduct of its
business; and conduct its business in an orderly and regular manner and in
accordance with all laws, rules, regulations, and orders of any governmental
authority having jurisdiction over it or its business.
(c) Books and Records. Maintain adequate books and records in
accordance with US GAAP consistently applied, and permit any representative
agent of Lender, at any reasonable time, to inspect, audit and examine such
books and records; to make copies of the same, and to inspect its assets and
properties.
5. Conditions Precedent to Term Loan. The obligation of Lender to make
the Term Loan shall be subject to the condition precedent that Lender shall have
received each of the following, each in form and substance satisfactory to
Lender:
(a) This Agreement, duly executed by the parties hereto;
(b) The Note, duly executed by Borrower;
(c) A Security Deed, duly executed by the parties hereto;
(d) An undertaking by all relevant shareholders of the
Borrower to amend the articles of association of the Borrower so that paragraph
(D) of the definition of "Triggering Event" in Article 2 shall be replaced with
the following or such other provision as the Lender may consider appropriate:
"(D) the material breach or default by the Company of any of the
material provisions or material obligations of the Company under the Term Credit
Agreement dated on or about June 19, 2006 by and between the Company and SBI
Brightline, LLC, as amended or modified from time to time. Without prejudice to
the generality of the foregoing, any late payment of any interest and/or
installment shall be deemed to be a material breach."
(e) An undertaking by all relevant shareholders of the
Borrower to amend the articles of association of the Borrower to add an
additional "Triggering Event" in Article 2 in the event of the Company's
payment of dividends on the Preferred Shares in additional Preferred Shares
rather than in cash, which event shall result in the right, at the holder's
option, to redeem such Preferred Shares at par value (i.e., ONE HUNDRED U.S.
DOLLARS (U.S. $100) per share).
(f) An undertaking by all relevant shareholders of the
Borrower to amend the articles of association of the Borrower to permit the
voluntary redemption by Borrower of its Preferred Shares.
6. Survival of Representations and Warranties. Borrower covenants,
warrants and represents to Lender that all representations and warranties of
Borrower contained in this Agreement or the Note shall be true at the time of
Borrower's execution of this Agreement and the Note, and shall survive the
execution, delivery and acceptance thereof by Lender and the parties thereto and
the closing of the transactions described therein or related thereto.
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7. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" and shall, at the option of Lender, require
immediate payment in full of all sums then remaining unpaid hereunder and under
the Note:
(a) Failure to Pay the Note. The failure of Borrower to pay
any principal, interest or other amount due under the Note when due and payable.
(b) Breach of Covenant, Representation or Warranty. The
failure of Borrower to perform or observe any covenant, condition or agreement
contained in this Agreement (other than the payment obligations, the breach of
which shall be governed by subsection (a) above) where such failure is not cured
within ten (10) Business Days after receipt of written notice thereof from
Lender, or any representation or warranty made or deemed made under or in
connection with this Agreement that was false or misleading in any material
respect when made.
(c) Non-Payment of Indebtedness. Borrower shall default in the
payment when due of any indebtedness for borrowed money if the effect of any
such default is to cause or permit the acceleration of such indebtedness, or to
permit the holder of the note evidencing such indebtedness to cause the same to
become due prior to its stated maturity.
(d) Insolvency. Borrower shall become insolvent; admit in
writing its inability to pay its debts as they mature; make an assignment for
the benefit of creditors; or if bankruptcy proceedings or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted by or against it and, if instituted against it, the same is not
dismissed within thirty (30) days of the filing thereof.
(e) Dissolution. Any order, judgment, or decree shall be
entered against Borrower decreeing its involuntary dissolution or split up and
such order shall remain undischarged and unstayed for a period in excess of
thirty (30) days; or Borrower shall otherwise dissolve or cease to exist.
(f) Cross Default. Any default by Stonepath Group, Inc., or
any of its domestic subsidiaries under the several agreements with Laurus Master
Fund, Ltd. ("Laurus"), dated August 31, 2005 (the "Laurus Agreements"), which is
not waived by Laurus within thirty (30) days thereof, including, but not limited
to any failure to pay any principal, interest or other amount due, when due and
payable under the Laurus Agreements.
8. Conversion of Preferred Shares. Following the effectiveness of the
amendment in Section 5(e) above, immediately upon any default by Stonepath
Group, Inc., or any of its domestic subsidiaries under the several agreements
with Laurus Master Fund, Ltd., dated August 31, 2005 (the "Laurus Agreements"),
including, but not limited to any failure to pay any principal, interest or
other amount due, when due and payable under the Laurus Agreements, Borrower
shall permit Hong Kong League Central Credit Union ("HKLCCU") to redeem the
thirty thousand (30,000) shares of the Borrower's Preferred Shares issued to
HKLCCU pursuant to an Exchange Agreement dated October 7, 2005, by and among
Borrower, STONEPATH GROUP, INC., HKLCCU, and SBI ADVISORS, LLC, at par value
(i.e., ONE HUNDRED U.S. DOLLARS (U.S.$100) per share), if such shares remain
outstanding at that time.
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9. Remedies. If an Event of Default shall occur, all amounts
outstanding hereunder or under the Note, notwithstanding any term of this
Agreement or the Note to the contrary, shall at Lender's option and without
notice to Borrower become immediately due and payable, without presentment,
demand, protest or notice of dishonor, all of which are hereby expressly waived
by Borrower. All rights, powers and remedies of Lender in connection with this
Agreement and the Note may be exercised at any time by Lender and from time to
time after the occurrence of an Event of Default, are cumulative and not
exclusive, and shall be in addition to any other rights, powers or remedies
provided by law or equity.
10. Miscellaneous.
(a) Failure or Indulgence Not Waiver. No failure or delay on
the part of Lender, or any holder of the Note in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof or of any other right, power or privilege.
(b) Modification. No modification, amendment or waiver of any
provision of this Agreement or the Note, nor the consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall have
been approved by Lender and shall be in writing signed by Lender and, with
respect to any amendment, Borrower. Such waiver or consent shall then be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in the same, similar or other circumstances.
(c) Notices. Except as otherwise expressly provided herein,
any notice herein required or permitted to be given shall be in writing and
shall be deemed effective when personally delivered, mailed, telecopied (with a
confirming copy sent by mail) or delivered by telex to the appropriate party at
the address set forth below (or at such other address as may be designated by
either party in a written notice sent in accordance with this Section):
If to Borrower: Stonepath Holdings (Hong Kong) Limited
Xxxx 0000, 00xx Xxxxx, Xxxxxxx Xxxxx
000 Xxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx
Xxxx Xxxx
with a copy to: Stonepath Group, Inc.
0000 Xxxxxxx Xxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Corporate Counsel
Telecopy No.: 000-000-0000
If to Lender: SBI Brightline, LLC
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Telecopy No.: 000-000-0000
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(d) Severability. In case any provision in this Agreement or the Note
shall be invalid, illegal or unenforceable, such provision shall be severable
from the remainder of such contract and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
(e) Applicable Law. This Agreement and the Note, and the rights and
obligations of the parties thereto, shall be governed by the laws of Hong Kong
and the parties hereby submit to the non-exclusive jurisdiction of the courts of
Hong Kong.
(f) Assignability. Borrower shall not assign its rights or obligations
hereunder, or under the Note to any other Person without the prior written
consent of Lender, and any attempted assignment in violation hereof shall be
null and void ab initio. Lender shall have the right to freely assign its rights
and obligations hereunder and no consent or approval from Borrower is required
in connection with any such assignment.
(g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(h) Section Headings. The various headings used in this Agreement are
inserted for convenience only and shall not affect the meaning or
interpretations of this Agreement or any provision hereof.
(i) Attorneys' Fees. In the event any party institutes any action or
proceeding to enforce the terms and conditions of this Agreement or the Note,
the prevailing party shall be entitled to reasonable attorneys' fees and costs.
(j) WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE,
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT, THE NOTE OR THE SUBJECT MATTER HEREOF AND THEREOF OR ANY DOCUMENT
RELATING HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING OR WHETHER IN CONTRACT, TORT OR OTHERWISE.
(k) Integration. This Agreement, the Note, and the Security Deed
reflect the entire understanding of the parties with respect to the transactions
contemplated hereby and shall not be contradicted or qualified by any other
agreement, oral or written, whether before or after the date hereof.
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IN WITNESS WHEREOF, the parties hereto do execute this Agreement as of
the date first above written.
"BORROWER"
STONEPATH HOLDINGS
(HONG KONG) LIMITED
By: /s/ XXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxx
---------------------------------------
Its: President and Chief Financial Officer
----------------------------------------
"LENDER"
SBI BRIGHTLINE, LLC
By: /s/ XXXXXX XXXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxxx
---------------------------------------
Its: Managing Member
----------------------------------------
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EXECUTION COPY
EXHIBITS
Exhibit "A" - Term Note
EXECUTION COPY
EXHIBIT A
TO THE TERM CREDIT AGREEMENT
FORM OF TERM NOTE
TERM NOTE
Hong Kong
U.S.$4,000,000 June 19, 2006
FOR VALUE RECEIVED, the undersigned, STONEPATH HOLDINGS (HONG KONG)
LIMITED, a Hong Kong corporation (the "Borrower"), HEREBY UNCONDITIONALLY
PROMISES TO PAY to the order of SBI BRIGHTLINE, a Delaware limited liability
company (the "Lender"), without offset or counterclaim, the principal sum of
FOUR MILLION U.S. DOLLARS (U.S.$4,000,000) on or before the Maturity Date (as
such term is defined in the Credit Agreement referred to below). The Borrower
further promises to pay interest on the Term Loan outstanding hereunder from
time to time at the interest rates, and payable on the dates, set forth in the
Credit Agreement referred to below. This Term Note may be prepaid at any time
prior to the Maturity Date without premium or penalty.
1. Payment. Both principal and interest are payable in lawful money of
the United States of America and in immediately available funds to the Lender at
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, XX 00000, or such other
place as the Lender may designate in writing to the Borrower from time to time.
2. Record Keeping. The Lender shall record the amount of principal and
interest due and payable from time to time hereunder, each payment thereof and
the resulting unpaid principal balance hereof, in the Lender's internal records,
and any such recordation shall be rebuttable presumptive evidence of the
accuracy of the information so recorded; provided, however, that the Lender's
failure so to record shall not limit or otherwise affect the obligations of the
Borrower hereunder and under the Credit Agreement to repay the principal of and
interest on the Term Loan.
3. Credit Agreement. This Term Note is the Note referred to in, and is
subject to and entitled to the benefits of, that certain Term Credit Agreement,
dated of even date herewith (as amended, modified, renewed or extended from time
to time, the "Credit Agreement") between the Borrower, the Lender and certain
other parties thereto. Unless otherwise defined herein, capitalized terms used
herein shall have the respective meanings assigned to them in the Credit
Agreement. The Credit Agreement provides, among other things, for acceleration
(which in certain cases shall be automatic) of the maturity hereof upon the
occurrence of certain stated events, in each case without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived.
4. Limitation on Interest Rate. In no contingency or event whatsoever
shall the aggregate of all amounts deemed interest hereunder or under the Credit
Agreement and charged
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or collected by the Lender or any holder of this Term Note exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final determination, deem applicable hereto. In the event that such a court
determines that the Lender has charged or received interest hereunder or under
the Credit Agreement in excess of the highest applicable rate, the rate in
effect hereunder and under the Credit Agreement shall automatically be reduced
to the maximum rate permitted by applicable law and the Lender shall apply all
interest paid in excess of the maximum lawful rate to reduce the principal
balance of the amounts outstanding hereunder and under the Credit Agreement. It
is the intent of the parties hereto that the Borrower not pay or contract to
pay, and that the Lender not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of the maximum rate of
interest that may be paid by the Borrower to the Lender under applicable law.
5. Governing Law. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF HONG KONG AND BORROWER HEREBY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF HONG KONG.
STONEPATH HOLDINGS (HONG KONG) LIMITED
By: /s/ XXXXXX XXXXXX
----------------------------------
Name: Xxxxxx Xxxxxx
--------------------------------
Its: President and Chief Financial
Officer
---------------------------------
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