AMENDMENT NUMBER TEN TO LOAN AND SECURITY AGREEMENT
EXHIBIT
10.5
AMENDMENT
NUMBER TEN
This
AMENDMENT NUMBER TEN TO LOAN AND SECURITY AGREEMENT
(this
“Amendment”)
is
entered into as of June 22, 2005, among ACCERIS
MANAGEMENT AND ACQUISITION, LLC, a
Minnesota limited liability company (“Lender”),
and
ACCERIS
COMMUNICATIONS CORP., a
Delaware corporation formerly known as WorldxChange Corp. (“ACC”)
and
ACCERIS
COMMUNICATIONS INC., a
Florida
corporation formerly known as I-Link, Incorporated (“ACI,”
and,
together with ACC, each individually a “Borrower”
and
together the “Borrowers”),
with
reference to the following:
WHEREAS,
ACC has
previously entered into, and ACI has previously become a party to, that certain
Loan and Security Agreement, dated as of December 10, 2001, with ▇▇▇▇▇
Fargo Foothill, Inc., a California corporation formerly known as Foothill
Capital Corporation (the “Original
Lender”),
as
amended by (i) that certain Amendment Number One to Loan and Security Agreement,
dated as of ▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) that certain Amendment Number Two
to Loan
and Security Agreement, dated as of June 11, 2002, (iii) that certain
Amendment Number Three to Loan and Security Agreement, dated as of July 31,
2003, (iv) that certain Amendment Number Four to Loan and Security Agreement,
dated as of October 14, 2003, (v) that certain Amendment Number Five to Loan
and
Security Agreement, dated as of April 13, 2004, (vi) that certain Amendment
Number Six to Loan and Security Agreement, dated as of July 15, 2004, (vii)
that
certain Amendment Number Seven to Loan and Security Agreement, dated as of
July
15, 2004, (viii) that certain Amendment Number Eight to Loan and Security
Agreement, dated as of October 14, 2004, and (ix) that certain Amendment
Number
Nine to Loan and Security Agreement, dated as of February 9, 2005 (as so
modified and as otherwise heretofore amended, modified or supplemented from
time
to time, the “Agreement”),
pursuant to which the Original Lender made certain loans and financial
accommodations available to Borrower;
WHEREAS,
pursuant to that certain Assignment and Acceptance Agreement dated as of
even
date herewith by an between the Original Lender and the Lender and acknowledged
by the Borrowers and by the Guarantors referred to therein (the “Loan
Assignment Agreement”),
the
Original Lender sold to the Lender and the Lender purchased from the Original
Lender the Agreement, together with the other Loan Documents, interceditor
agreements and other agreements referred to in the Agreement, and all rights
related thereto; and
WHEREAS,
to
induce the Lender to enter into the Loan Assignment Agreement, the Borrowers
have agreed to amend the Agreement as set forth herein, and the Lender has
agreed to amend the Agreement in certain other respects as set forth
herein.
NOW,
THEREFORE,
in
consideration of the foregoing and the mutual covenants herein contained,
and
for other good and valuable consideration, the receipt and sufficiency of
which
are hereby acknowledged, the parties hereby agree as follows:
1. Definitions.
Terms
used herein without definitions shall have the meanings ascribed to them
in the
Agreement.
2. Existing
Indebtedness.
Each
Borrower represents and warrants to the Lender that each of the Agreement,
the
other Loan Documents and all other related loan documents entered into with
the
Original Lender continue in full force and effect in accordance with its
original terms, and the obligations of each Borrower thereunder are not subject
to any defense, counterclaim or right of setoff, or, to the extent that any
such
defense, counterclaim or setoff exists, each of the same are hereby absolutely
and forever waived and released. Each Borrower acknowledges and agrees (i)
that,
as of the date hereof, the outstanding principal amount of Advances plus
interest and all outstanding fees and expenses are $2,689,689.18 and (ii)
that
such obligations (the aggregate amount thereof being referred to as the
“Existing
Indebtedness”),
together with any other existing obligations of either Borrower acquired
by the
Lender from the Original Lender under the Loan Assignment Agreement, are
now
evidenced by and repayable in accordance with the Agreement. Each Borrower
consents to the transactions contemplated by the Loan Assignment Agreement.
3. Amendments
to the Agreement.
(a) Section
1.1
of the
Agreement hereby is amended by adding the following defined terms in their
proper alphabetical order or amending and restating the following definitions
in
their entirety, as the case may be:
“Asset
Sale Agreement”
means
that certain Asset Purchase Agreement by and among each Person comprising
Borrower, Counsel, Acceris Management and Acquisition LLC, and North Central
Equity LLC.
“Borrower”
means,
collectively and jointly and severally, Acceris Communications Inc., a Florida
corporation (formerly known as I-Link, Incorporated), also referred to herein
as
“Parent,” and Acceris Communications Corp. (formerly known as WorldxChange
Corp.), a Delaware corporation.
“Existing
Indebtedness”
means,
as of June 22, 2005, outstanding Advances under this Agreement in the amount
of
principal, interest and related fees and expenses is $2,689,689.18, and any
other existing obligations of Borrower evidenced by and repayable in accordance
with this Agreement.
“Loan
Documents”
means
this Agreement, the ACTI Guarantor Security Agreement, the Cash Management
Agreements, the Control Agreements, the Counsel/ACTI Guaranty, the Counsel
Stock
Pledge Agreement, the Counsel 2004 Intercreditor Agreement, the Disbursement
Letter, the Due Diligence Letter, the Fee Letter, the Guaranty, the
Intercreditor Agreement, the Laurus Intercreditor Agreement, the Officer’s
Certificate, the Parent Stock Pledge Agreement, the Stock Pledge Agreement,
the
Subsidiary Stock Pledge Agreement, collateral access agreements for Pittsburgh,
San Diego, and other Borrower locations, any note or notes executed by a
Borrower in connection with this Agreement and payable to Lender, and any
other
agreement, instrument or document entered into, now or in the future, by
a
Borrower or Guarantor in connection with this Agreement or otherwise relating
to, executed in connection with, or arising out of the transactions contemplated
by this Agreement.
“Obligations”
means
all loans, Advances, debts, principal, interest (including any interest that,
but for the provisions of the Bankruptcy Code, would have accrued), premiums,
liabilities (including all amounts charged to Borrower’s Loan Account pursuant
hereto), obligations, fees (including the fees provided for in the Fee Letter),
charges, costs, Lender Expenses (including any fees or expenses that, but
for
the provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties of any kind and description owing by Borrower
to Lender pursuant to or evidenced by the Loan Documents and irrespective
of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all Lender Expenses that Borrower
is required to pay or reimburse by the Loan Documents, by law, or otherwise.
Any
reference in this Agreement or in the Loan Documents to the Obligations shall
include all amendments, changes, extensions, modifications, renewals
replacements, substitutions, and supplements, thereto and thereof, as
applicable, both prior and subsequent to any Insolvency Proceeding.
“Maximum
Revolver Amount”
means
$5,000,000, including without limitation the Existing Indebtedness.
“Tenth
Amendment”
means
that certain Amendment Number Ten to Loan and Security Agreement dated as
of
June 22, 2005, between each Person comprising Borrower and Lender.
(b) Section
1.1
of the
Agreement hereby is amended by deleting the definitions of “Acceris Accounts,”“Acceris Availability,”“Acceris Base Rate Margin,”“Acceris Borrowing Base,”“Acceris Dilution,”“Acceris Dilution Reserve,”“Acceris Direct Billed
Accounts,”“Acceris Direct Billed Borrowing Base,”“Acceris Direct Billed
Dilution,”“Acceris Direct Billed Dilution Reserve,”“Acceris Loan Account,”
Acceris Revolver Advances,”“Acceris Revolver Usage,”“ACT Transactions,”“Aggregate Availability,”“Applicable Prepayment Premium,”“Availability,”“Bank
Product Agreements,”“Bank Product Obligations,”“Bank Products,”“Bank Product
Reserves,”“Base Rate,”“Base Rate Loan,”“Base Rate Margin,”“Billing and
Collection Charges Reserve,”“Billing Reserve,”“Borrowing Base,”“Borrowing
Base Certificate,”“Dilution,”“Dilution Reserve,”“Direct Billed Accounts,”“Eligible Accounts,”“Eligible RSL Direct Billed Accounts,”“Eligible Acceris
Accounts,”“Eligible Acceris Direct Billed Accounts,”“Excess Availability,”“Excess RSL Availability,”“Former RSL Customers,”“Funding Date,”“Funding
Losses,”“Hedge Agreement,”“ILEC,”“L/C,”“L/C Disbursement,”“L/C
Undertaking,”“LED Confirmation Statement,”“LEC Reserves,”“Letter of Credit,”“Letter of Credit Usage,”“Net Issuance Proceeds,”“Overadvance,”“Required
Availability,”“Revolver Block Amount,”“Revolver Usage,”“RSL Availability,”“RSL Borrowing Base,”“RSL Clearinghouse Accounts,”“RSL Dilution,”“RSL
Dilution Reserve,”“RSL Direct Billed Accounts,”“RSL Note,”“RSL Loan Account,”“RSL Revolver Advances,”“RSL Revolver Usage,”“Telecommunication Taxes,”“Telecommunication Tax Reserve,”“Underlying Issuer,”“Underlying Letter of
Credit,” and “▇▇▇▇▇ Fargo.”
(c) Sections
2.1, 2.2, 2.3, 2.4, 2.5 and 2.6
of the
Agreement are hereby amended and restated in their entirety as set forth
on
Schedule 2A hereto.
(d) Section
2.8
of the
Agreement is hereby amended to replace the reference to “Base Rate Loans”
therein to “Advances.”
(e) Sections
2.9, 2.10, 2.11, 2.12, 2.13 and 2.14
of the
Agreement are hereby amended and restated in their entirety as set forth
on
Schedule 2B hereto.
(f) Section
2.16
of the
Agreement is hereby deleted in its entirety.
(g) The
introductory clause in Section
3.3
is
hereby amended and restated as follows:
Lender’s
discretionary consideration of any request for an Advance (or to extend any
other credit hereunder) shall be subject to the following conditions
precedent:
(h) Sections
3.4, 3.5 and 3.6
of the
Agreement are hereby amended and restated in their entirety as set forth
on
Schedule 3 hereto.
(i) Section
6.2 of the Agreement is hereby amended to (i) delete, in subsection (a),
the
phrase “and a calculation of the Borrowing Base as of such date,” (ii) by
amending and restating subsection (d) in its entirety to read “intentionally
omitted,” and (iii) delete, in subsection (e), the phrase “together with a
reconciliation to the detailed calculation of the Borrowing Base previously
provided to Lender.”
(j) The
second sentence of Section 6.18 is hereby deleted in its entirety.
(k) Section
7.1
of the
Agreement is hereby amended by amending and restating each of subsections
(e)
and (f) thereof in their entirety to read “intentionally omitted.”
(l) Section
7.3(c)
of the
Agreement is hereby amended and restated in its entirety as
follows:
(c) Convey,
sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or series of transactions, all or any substantial part of its
assets
(other than pursuant to a Permitted Disposition or pursuant to the Asset
Sale
Agreement).
(m) Section
7.20
of the
Agreement is hereby deleted in its entirety.
(n) Section
8.13 of the Agreement is hereby amended and restated in its entirety as
follows:
If
the
obligation of Guarantor under the Guaranty, or of the guarantors under the
Counsel/ACTI Guaranty, or of any other guarantor under any guaranty of any
of
the Obligations is limited, terminated or revoked by operation of law or
by the
applicable guarantor thereunder; or
(o) Section
8.15
of the
Agreement is hereby amended to replace the period at its end with “; or”, and
the Agreement is hereby further amended to add thereafter the following new
Section
8.16:
8.16 If
the
Asset Sale Agreement is terminated or the transactions contemplated thereby
are
not consummated in accordance with the provisions thereof.
(p) Section
12 of
the
Agreement is
hereby
amended to amend and restate the notice address for Lender as
follows:
If
to
Lender: Acceris
Management and Acquisition, LLC, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(q) Section
16.10
of the
Agreement is hereby deleted in its entirety.
(r) Exhibit
C-1 of the Agreement is hereby amended to (i) address the form of Compliance
Certificate to Lender, and (ii) restate in its entirety the first sentence
of
the Compliance Certificate to read, “Reference is made to that certain Loan and
Security Agreement, dated as of December 10, 2001, among Acceris
Communications Inc. (“ACI”), Acceris Communications Corp. (formerly known as
WorldxChange Corp., “ACC,” and, with ACI, “Borrower”) and Acceris Management and
Acquisition, LLC (“Lender”), as assignee of ▇▇▇▇▇ Fargo Foothill, Inc. (formerly
known as Foothill Capital Corporation), as amended.”
4. Representations
and Warranties.
Each of
the Borrowers hereby represents and warrants to Lender that (a) the
execution, delivery, and performance of this Amendment and of the Agreement,
as
amended by this Amendment, are within its corporate powers, have been duly
authorized by all necessary corporate action, and are not in contravention
of
any law, rule, or regulation, or any order, judgment, decree, writ, injunction,
or award of any arbitrator, court, or governmental authority, or of the terms
of
its charter or bylaws, or of any contract or undertaking to which it is a
party
or by which any of its properties may be bound or affected, (b) this
Amendment and the Agreement, as amended by this Amendment, constitute the
legal,
valid, and binding obligation of such Borrower, enforceable against such
Borrower in accordance with its terms, (c) this Amendment has been
duly
executed and delivered by such Borrower, and (d) no Default or Event of Default
has occurred and is continuing. Any misrepresentation or breach of warranty
under this Amendment shall be deemed an Event of Default.
5. Choice
of Law.
The
validity of this Amendment, its construction, interpretation and enforcement,
and the rights of the parties hereunder, shall be determined under, governed
by,
and construed in accordance with the laws of the State of
California.
6. Counterparts;
Facsimile Execution.
This
Amendment may be executed in any number of counterparts and by different
parties
and separate counterparts, each of which when so executed and delivered,
shall
be deemed an original, and all of which, when taken together, shall constitute
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Amendment by facsimile transmission shall be effective as delivery
of a manually executed counterpart of this Amendment. Any party delivering
an
executed counterpart of this Amendment by facsimile transmission also shall
deliver a manually executed counterpart of this Amendment but the failure
to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amendment.
7. Release.
As to
each and every claim released under this Amendment, each Borrower hereby
represents that it has received the advice of legal counsel with regard to
the
releases contained herein, and having been so advised, each of them specifically
waives the benefit of the provisions of Section 1542 of the Civil Code of
California which provides as follows:
“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW
OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF
KNOWN BY HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
As
to
each and every claim released hereunder, each Borrower also waives the benefit
of each other similar provision of applicable federal or state law, if any,
pertaining to general releases after having been advised by its legal counsel
with respect thereto. Each Borrower hereby agrees, represents, and warrants
that
it has not voluntarily, by operation of law or otherwise, assigned, conveyed,
transferred or encumbered, either directly or indirectly, in whole or in
part,
any right to or interest in any claim released under this Agreement.
8. Effect
on Loan Documents.
(a) The
Agreement, as amended hereby, and the other Loan Documents shall be and remain
in full force and effect in accordance with its respective terms and hereby
is
ratified and confirmed in all respects. The execution, delivery, and performance
of this Amendment shall not, except as expressly set forth herein, operate
as a
waiver of or, except as expressly set forth herein, as an amendment of, any
right, power, or remedy of Lender as in effect prior to the date hereof.
The
waivers, consents, and modifications herein are limited to the specifics
hereof,
shall not apply with respect to any facts or occurrences other than those
on
which the same are based, shall not excuse future non-compliance with the
Agreement, and shall not operate as a consent to any further or other matter,
under the Loan Documents.
(b) Upon
and
after the effectiveness of this Amendment, each reference in the Agreement
to
“this Agreement”, “hereunder”, “herein”, “hereof” or words of like import
referring to the Agreement, and each reference in the other Loan Documents
to
“the Agreement”, “thereunder”, “therein”, “thereof” or words of like import
referring to the Agreement, shall mean and be a reference to the Agreement
as
modified and amended hereby.
(c) To
the
extent that any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any terms or conditions of the Agreement,
after giving effect to this Amendment, such terms and conditions are hereby
deemed modified or amended accordingly to reflect the terms and conditions
of
the Agreement as modified or amended hereby.
[Signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as
of the date first written above.
ACCERIS
COMMUNICATIONS CORP.,
a
Delaware corporation
By:______________________________
Name:
Title:
a
Florida
corporation
By:______________________________
Name:
Title:
ACCERIS
MANAGEMENT AND ACQUISITION, LLC,
a
Minnesota limited liability company
By:______________________________
Name:
Title:
REAFFIRMATION
AND CONSENT
All
capitalized terms used herein but not otherwise defined herein shall have
the
meanings ascribed to them in that certain Loan and Security Agreement, dated
as
of December 10, 2001 (as amended, restated, supplemented or otherwise
modified, the “Loan Agreement”), by and among Acceris Communications Corp., a
Delaware corporation formerly known as WorldxChange Corp. (“ACC”)
and
Acceris Communications Inc.,
a
Florida
corporation formerly known as I-Link, Incorporated (“ACI,”
and,
together with ACC, the “Borrowers”),
and
Acceris Management and Acquisition, LLC, a Minnesota limited liability company
(the “Lender”),
as
assignee of ▇▇▇▇▇ Fargo Foothill, Inc., a California corporation, or in
Amendment Number Ten to Loan and Security Agreement, dated as of June 22,
2005,
by and between the Borrowers and Lender (the “Amendment”). Each of the
undersigned hereby (a) represents and warrants to Lender that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its powers, have been duly authorized by all necessary action, and
are
not in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter or bylaws, or of any contract or
undertaking to which it is a party or by which any of its properties may
be
bound or affected; (b) consents to the transactions contemplated by
the
Amendment; (c) acknowledges and reaffirms its obligations owing to
Lender
under any Loan Documents to which it is a party; and (d) agrees that
each
of the Loan Documents to which it is a party is and shall remain in full
force
and effect. Although the undersigned has been informed of the matters set
forth
herein and has acknowledged and agreed to same, it understands that Lender
has
no obligations to inform it of such matters in the future or to seek its
acknowledgment or agreement to future amendments, and nothing herein shall
create such a duty. Delivery of an executed counterpart of this Reaffirmation
and Consent by facsimile transmission shall be equally as effective as delivery
of an original executed counterpart of this Reaffirmation and Consent. Any
party
delivering an executed counterpart of this Reaffirmation and Consent by
facsimile transmission also shall deliver an original executed counterpart
of
this Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect
of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of California.
IN
WITNESS WHEREOF, the undersigned has caused this Reaffirmation and Consent
to be
executed as of the date of the Amendment.
CPT-1
HOLDINGS, INC.,
a
Delaware corporation, as a Guarantor
By:_______________________________
Title:______________________________
ACCERIS
COMMUNICATIONS TECHNOLOGIES, INC.,
a
Delaware corporation, as a Guarantor
By:_______________________________
Title:______________________________
MIBRIDGE,
INC.,
a
Utah
corporation, as a Guarantor
By:_______________________________
Title:______________________________
COUNSEL
CORPORATION,
an
Ontario corporation, as a Guarantor
By:_______________________________
Title:______________________________
COUNSEL
COMMUNICATIONS LLC,
a
Delaware limited liability company, as a Guarantor
By:_______________________________
Title:______________________________
COUNSEL
CORPORATION (US),
a
Delaware corporation, as a Guarantor
By:_______________________________
Title:______________________________
Schedule
2A
2.1
Advances.
(a)
With
respect to advances by Lender to Borrower under this Agreement (“Advances”),
Borrower acknowledges and agrees that Lender shall not be obligated to make
any
further Advances, and that Lender may in its sole discretion refuse to make
any
further Advances hereunder for any reason whatsoever or for no reason. The
aggregate amount of the Existing Indebtedness and all Advances which Lender
may
determine in its sole discretion to make under this Agreement will not, in
any
event, exceed the Maximum Revolver Amount.
(b)
Lender may make further Advances on any basis deemed appropriate by Lender
from
time to time. Lender may change from time to time, at its sole discretion
and
without notice to Borrower, the standards, criteria or formulae used by Lender
in determining whether to make any Advance.
(c)
Amounts borrowed pursuant to this Section may be repaid at any time during
the
term of this Agreement.
(d)
The
Obligations shall be fully binding and enforceable without any note or other
evidence of indebtedness. Nevertheless, if Lender so requests, Borrower will
duly execute and deliver to Lender a promissory note in negotiable form payable
on demand to the order of Lender in a principal amount equal to, at Lender’s
discretion, either the Maximum Revolver Amount or the principal balance of
Obligations then outstanding to Lender under this Agreement, together with
interest as set forth in Section
2.6.
2.2 Intentionally
omitted.
2.3
Borrowing
Procedures and Settlements.
(a) Procedure
for Borrowing.
Borrower
will request Advances from Lender in such manner as Lender may from time
to time
prescribe. Borrower acknowledges and agrees that Lender may make Advances
in any
amount and in any manner requested orally or in writing by an Authorized
Person.
In requesting any Advances under this Agreement, Borrower shall be deemed
to
represent and warrant to Lender that, as of the date of the proposed Advance,
the representations and warranties contained in this Agreement and the other
Loan Documents will be true and correct in all material respects on and as
of
such date, as though made on and as of such date (except to the extent that
such
representations and warranties relate solely to an earlier date).
(b) Making
of Advances. Lender
may disburse the proceeds of any Advance by deposit with any bank to or for
the
account of either Person comprising Borrower or to or for the account of
any
third party designed by any Authorized Person, or by an instrument payable
to
either Person comprising Borrower or to any such third party delivered to
any
Authorized Person or to any such third party, or in any other manner deemed
appropriate by Lender.
2.4
Payments.
(a) Payments
by Borrower. Borrower
hereby promises to pay the Obligations (including principal, interest,
fees, costs
and
expenses) in Dollars in full to Lender as and when due and payable under
the
terms of this Agreement and the other Loan Documents. All payments by Borrower
shall be made at the offices of Lender in Minneapolis, Minnesota, unless
Lender
designates a different place of payment by written notice to either Person
comprising Borrower.
(b) Application
of Payments.
All
payments shall be remitted to Lender and all such payments, and all proceeds
of
Accounts or other Collateral received by Lender, may be applied to pay any
or
all Advances or other indebtedness of Borrower under this Agreement in any
manner or order of application as Lender may elect. In the event of a direct
conflict between this provision and other provisions contained in any other
Loan
Document, this provision shall control and govern.
2.5
Intentionally
omitted.
2.6
Interest
Rate, Payments, and Calculations.
(a) Interest
Rate. All
Obligations that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate
equal to ten percent (10%).
(b) Payment.
Interest
and all other fees payable hereunder shall be due and payable, in arrears,
on
the first day of each month at any time that Obligations hereunder are
outstanding, and all Obligations shall be due and payable on the Maturity
Date.
Each Person comprising Borrower hereby authorizes Lender, from time to time
without prior notice to Borrower, to charge such interest and fees, all Lender
Expenses (as and when incurred), the fees and costs provided for in Section
2.11
(as and
when accrued or incurred), and all other payments as and when due and payable
under any Loan Document to Borrower’s Loan Account, which amounts thereafter
shall constitute Advances hereunder and shall accrue interest at the rate
then
applicable to Advances hereunder. Any interest not paid when due shall be
compounded by being charged to Borrower’s Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances.
(c) Computation.
All
interest and fees chargeable under the Loan Documents shall be computed on
the
basis of a 360 day year for the actual number of days elapsed.
(d) Intent
Limit Charges to Maximum Lawful Rate.
In no
event shall the interest rate or rates payable under this Agreement, plus
any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrower and Lender, in executing and delivering
this Agreement, intend legally to agree upon the rate or rates of interest
and
manner of payment stated within it; provided,
however,
that,
anything contained herein to the contrary notwithstanding, if said rate or
rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso
facto,
as of
the date of this Agreement, Borrower is and shall be liable only for the
payment
of such maximum as allowed by law, and payment received from Borrower in
excess
of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such
excess.
Schedule
2B
2.9
Designated
Account.
Lender
is
authorized to make the Advances under this Agreement based upon telephonic
or
other instructions received from anyone purporting to be an Authorized Person,
or without instructions if pursuant to Section 2.6(b). Borrower agrees to
establish and maintain the Designated Account with the Designated Account
Bank
for the purpose of receiving the proceeds of the Advances requested by Borrower
and made by Lender hereunder. Unless otherwise agreed by Lender and Borrower,
any Advance requested by Borrower and made by Lender hereunder shall be made
to
the Designated Account.
2.10 Maintenance
of Loan Account; Statements of Obligations.
Lender
shall maintain an account on its books in the name of Borrower (the “Loan
Account”) on which Borrower will be charged with all Advances made by Lender to
Borrower or for Borrower’s account and with all other payment Obligations
hereunder or under the other Loan Documents, including, accrued interest,
fees
and expenses, and Lender Expenses. In accordance with Section 2.8, the Loan
Account will be credited with all payments received by Lender from Borrower
or
for Borrower’s account, including all amounts received in the Lender’s Account
from any Cash Management Bank. Lender shall render statements regarding the
Loan
Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Expenses owing,
and
such statements shall be conclusively presumed to be correct and accurate
and
constitute an account stated between Borrower and Lender unless, within 30
days
after receipt thereof by Borrower, Borrower shall deliver to Lender written
objection thereto describing the error or errors contained in any such
statements.
2.11
Fees.
Borrower
shall pay to Lender the following fees and charges, which fees and charges
shall
be non-refundable when paid (irrespective of whether this Agreement is
terminated thereafter):
(a)Fee
Letter Fees.
As and
when due and payable under the terms of the Fee Letter, Borrower shall pay
to
Lender the fees set forth in the Fee Letter, and
(b) Audit
and Valuation Charges.
Audit
and valuation fees and charges as follows (i) a fee of $850 per day, per
auditor, plus out-of-pocket expenses for each financial audit of Borrower
performed by personnel employed by Lender, (ii) if implemented, a one time
charge of $5,000 plus out-of-pocket expenses for expenses for the establishment
of electronic collateral reporting systems, and (iii) after the occurrence
and
during the continuance of an Event of Default, the actual charges paid or
incurred by Lender if it elects to employ the services of one or more third
Persons to perform financial audits of Borrower or to assess Borrower’s business
valuation.
2.12 Intentionally
omitted.
2.13 Intentionally
omitted.
2.14 Intentionally
omitted.
Schedule
3
3.4
Term. This
Agreement shall become effective upon the execution and delivery hereof by
Borrower and Lender and shall continue in full force and effect for a term
ending on _______, 200_ (the “Maturity Date”). The foregoing notwithstanding,
Lender shall have the right to terminate this Agreement immediately and without
notice upon the occurrence and during the continuation of an Event of
Default.
3.5
Effect
of Termination.
On the
date of termination of this Agreement, all Obligations immediately shall
become
due and payable without notice or demand. No termination of this Agreement,
however, shall relieve or discharge Borrower of its duties, Obligations,
or
covenants hereunder and the Lender’s Liens in the Collateral shall remain in
effect until all Obligations have been fully and finally discharged. When
this
Agreement has been terminated and all of the Obligations have been fully
and
finally discharged irrevocably, Lender will, at Borrower’s sole expense, execute
and deliver any UCC termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable
form)
as are reasonably necessary to release, as of record, the Lender’s Liens and all
notices of security interests and liens previously filed by Lender with respect
to the Obligations.
3.6
Early
Termination by Borrower.
Borrower
has the option, at any time, to terminate this Agreement by paying to Lender,
in
cash, the Obligations in full.