Exhibit 1
_________
NOTE PURCHASE AGREEMENT
Baleine Investment Holdings, Limited Icon Systems Inc.
POB 141 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ Tonnelle House #353, Salt Lake City
Les Banques, St ▇▇▇▇▇▇▇ Utah 84117
Guernsey Gy1 3HS USA
October 15, 1999
Credit Suisse First Boston (Hong Kong) Ltd.
Ladies and Gentlemen:
Baleine Investment Holdings, Limited, a British Virgin Island corporation
(the "Company"), and Icon Systems Inc., a Nevada corporation ("ICON"), agree
with you as follows:
1. AUTHORIZATION OF SECURED NOTES.
The Company will authorize the issue and delivery of its Secured Notes in
aggregate principal amount equal to thirty (30) per cent. of the Promissory
Notes (the term Promissory Notes being defined in Section 2)(the "Secured
Notes", such term to include any such notes issued in substitution therefor
pursuant to Section 14 of this Agreement). The Secured Notes shall be
non-interest bearing, except as otherwise provided in this Agreement, and shall
mature as follows:
Amount Maturity Date
five (5) per cent of face amount of
Promissory Notes. December 15, 1999
five (5) per cent of face amount of February 28, 2000
Promissory Notes.
ten (10) per cent of face amount of June 30, 2000
Promissory Notes.
ten (10) per cent of face amount of December 30, 2000
Promissory Notes.
The Secured Notes shall be substantially in the form set out in Exhibit 1, with
such changes therefrom, if any, as may be approved by you and the Company.
Certain capitalized terms used in this Agreement are defined in Schedule 1;
references to a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement. All of the Schedules and Exhibits to this Agreement are hereby
incorporated by reference herein in their entirety.
2. DELIVERY OF SECURED NOTES; SECURITY DOCUMENTS.
Subject to the terms and conditions of this Agreement, the Company will
issue and deliver to you at the Closing provided for in Section 3, Secured Notes
in the aggregate principal amount equal to thirty (30) per cent. of the
Promissory Notes (as defined below). The Secured Notes are secured by the
Security Documents.
The Secured Notes, together with $5,400,000 (US dollars five million four
hundred thousand) previously paid to you by an Affiliate of the Company, will be
applied to the purchase by the Company from you of promissory notes of PT
Polysindo Eka Perkasa Tbk. (the "Promissory Notes") described in Schedule 2A
hereto. The Promissory Notes will be held by you pursuant to the Pledge
Agreement.
The Promissory Notes identified in Schedule 2B hereto will be delivered to
the Company at the Closing. The balance of the Promissory Notes shall be
delivered to the Company, as provided in Section 11 of this Agreement.
At the Closing the executed Security Documents shall be delivered to you.
All the collateral in the Collateral Pool shall be delivered to the Collateral
Agent.
3. CLOSING.
The issue and delivery of the Secured Notes and the Pledged Shares shall
occur at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, at 10.00 a.m., New York City time, at a closing (the
"Closing") on October 29, 1999 or on such other Business Day as may be agreed
upon by the Company and you. At the Closing the Company will deliver the Secured
Notes in the form of a single Secured Note for each maturity (or such greater
number of Notes in denominations of at least $100,000 (US dollars one hundred
thousand) as you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee). If at the Closing the Company shall
fail to tender such Secured Notes and the Pledged Shares to you as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligations under this Agreement are subject to the fulfillment to
your satisfaction, prior to or at the Closing, of the following conditions:
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4.1. Representations and Warranties.
The representations and warranties of the Company and ICON in this
Agreement shall be correct when made and at the time of the Closing.
4.2. Performance; No Default.
The Company and ICON shall have performed and complied with all agreements
and conditions contained in this Agreement and required to be performed or
complied with by them prior to or at the Closing and, after giving effect to the
issue and delivery of the Secured Notes, no Default or Event of Default shall
have occurred and be continuing. Neither the Company, ICON nor any Subsidiary of
the Company or ICON shall have entered into any transaction since August 1, 1999
that would have been prohibited by Section 12, hereof had such Section applied
since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. Each of the Company and ICON shall have
delivered to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.5 have been
fulfilled.
(b) Secretary's Certificate. (i) The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Secured Notes and this Agreement; (ii) TTI shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Security Documents to which it is a party.
4.4. Opinion of Counsel.
(a) You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing from in-house counsel of ICON and the Company
or other local counsel acceptable to you, covering such matters incident to such
transactions as you may reasonably request.
You shall have received an opinion in form and substance satisfactory to
you, dated the date of the Closing from ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, your
special counsel in connection with such transactions and covering such matters
incident to such transactions as you may reasonably request.
4.5. Changes in Corporate Structure.
None of the Company, ICON, TTI and Coastal shall have changed its
jurisdiction of incorporation or been a party to any merger or consolidation and
shall not have succeeded to all or any substantial part of the liabilities of
any other entity.
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4.6. Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
4.7 Security Documents
The Security Documents shall have been executed and delivered to you,
together with the share certificates for the shares pledged under the Pledge
Agreement and the TTI Pledge Agreement, and stock powers for all such shares
executed in blank.
5. [Not Used]
6. MAJORITY CONTROL MINIMUM
6.1 Acquisitions by ICON
If no Default or Event of Default has occurred or is outstanding, ICON may
acquire assets in exchange for the issuance of additional shares so long as ICON
shares which are part of the Collateral Pool, after taking into account the
effect of the issuance of any additional ICON shares, are equal to or greater
than sixty (60) per cent. of the ICON shares then outstanding (the "Majority
Control Minimum").
6.2 Coastal Acquisition
The acquisition of assets by ICON in accordance with Section 6.1 above
shall include, without limitation, the issuance of ICON shares in connection
with the Coastal Acquisition.
7. DEBT RESTRUCTURING AND COLLATERAL SUBSTITUTION
In the event of restructuring of all or substantially all of the
Indebtedness of PT Polysindo Eka Perkasa Tbk. that results in the exchange of
the Promissory Notes for another debt or equity instrument of PT Polysindo Eka
Perkasa Tbk. or any of its group of companies or any other form of consideration
(the "Restructuring Assets"), the Promissory Notes will be released from the
Collateral Pool and replaced by the Restructuring Assets.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company and ICON jointly and severally represent and warrant to you
that:
8.1. Organization; Power and Authority.
The Company and ICON are each corporations duly organized, validly existing
and in good standing under the laws of their jurisdictions of incorporation, and
are duly qualified
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as foreign corporations and in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
and ICON have the corporate power and authority to own or hold under lease the
properties they purport to own or hold under lease, to transact the business
they transact and propose to transact and the Company has the corporate power
and authority to execute and deliver this Agreement and the Secured Notes and to
perform the provisions hereof and thereof.
8.2. Authorization, etc.
This Agreement and the Secured Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Secured Note will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
This Agreement has been duly authorized by all necessary corporate action
on the part of ICON, and this Agreement constitutes a legal, valid and binding
obligation of ICON enforceable against ICON in accordance with its terms, except
as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
8.3. Disclosure.
Since August 1, 1999, there has been no change in the financial condition,
operations, business, properties or prospects of the Company, ICON or any of
their Subsidiaries except changes that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company or to ICON that could reasonably be expected to have a
Material Adverse Effect that has not been set forth herein or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company or ICON specifically for use in connection with the transactions
contemplated hereby.
8.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedules 8.4A and 8.4B contain (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries and ICON's Subsidiaries,
respectively showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by the Company,
ICON and each other Subsidiary, (ii) of the Company's Affiliates, and ICON's
Affiliates, other than Subsidiaries, and (iii) of the Company's and ICON's
directors and senior officers.
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(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 8.4 as being owned by the
Company, ICON and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company, ICON or another Subsidiary of the
Company or ICON free and clear of any Lien (except as otherwise disclosed in
Schedule 8.4).
(c) Each Subsidiary identified in Schedule 8.4 is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary (including ICON) is a party to, or otherwise subject to
any legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 8.4 and customary limitations imposed by corporate
law statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or
ICON, as the case may be, or any of its Subsidiaries that owns outstanding
shares of capital stock or similar equity interests of such Subsidiary.
8.5. Financial Statements.
The Company has delivered to you copies of the financial statements of the
Company, ICON and their Subsidiaries listed on Schedule 8.5. All of said
financial statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial position of
the Company, ICON and their Subsidiaries as of the respective dates specified in
such Schedule and the consolidated results of their operations and cash flows
for the respective periods so specified and have been prepared in accordance
with GAAP or IAAP consistently applied throughout the periods involved except as
set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
8.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this Agreement
and the Secured Notes and by ICON of this Agreement will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Company, ICON or any of
their Subsidiaries under, any indenture, mortgage, deed of trust, loan, purchase
or credit agreement, lease, corporate charter or by-laws, or any other agreement
or instrument to which the Company, ICON or any of their Subsidiaries is bound
or by which the Company, ICON or any of their Subsidiaries or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company, ICON or any of their Subsidiaries or (iii) violate any provision
of
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any statute or other rule or regulation of any Governmental Authority applicable
to the Company or any Subsidiary.
8.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Secured Notes or by ICON of this Agreement.
8.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 8.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company and/or ICON, threatened
against or affecting the Company, ICON or any of their Subsidiaries or any
property of the Company, ICON or any of their Subsidiaries in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company, ICON nor any of their Subsidiaries is in default
under any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation of any Governmental Authority, which default or violation,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
8.9. Taxes.
The Company, ICON and each of their Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have paid all
taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company, ICON or their
Subsidiaries, as the case may be, has established adequate reserves in
accordance with GAAP or IAAP. Neither the Company nor ICON knows of any basis
for any other tax or assessment that could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Company, ICON and each of their Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal income tax
liability, if any, of the Company, ICON and each of their Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended June 30, 1999.
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8.10. Title to Property; Leases.
The Company, ICON and each of their Subsidiaries have good and sufficient
title to their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 8.5 or purported to have been acquired by
the Company, ICON or any of their Subsidiaries after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens prohibited by this Agreement. All leases that individually or
in the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.
8.11. Licenses, Permits, etc.
Except as disclosed in Schedule 8.11,
(a) the Company, ICON and each of their Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company and ICON, no product of the
Company or ICON infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service ▇▇▇▇, trademark, trade name
or other right owned by any other Person; and
(c) to the best knowledge of the Company, and ICON, there is no Material
violation by any Person of any right of the Company, ICON or any of their
Subsidiaries with respect to any patent, copyright, service ▇▇▇▇, trademark,
trade name or other right owned or used by the Company, ICON or any of their
Subsidiaries.
8.12. Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the Secured
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the issuance or sale of
the Secured Notes to the registration requirements of Section 5 of the
Securities Act.
8.13. Existing Indebtedness; Future Liens.
(a) Except as described therein, Schedule 8.13 sets forth a complete and
correct list of all outstanding Indebtedness of the Company, ICON and their
Subsidiaries as of the date of this Agreement, since which date there has been
no material change in the amounts, interest rates, sinking funds, installment
payments or maturities of the Indebtedness of the Company, ICON or their
Subsidiaries. Neither the Company, ICON nor any of their Subsidiaries is in
default and no waiver of default is currently in effect, in the payment of any
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principal or interest on any Indebtedness of the Company, ICON or such
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company, ICON or any Subsidiary that would permit (or that with notice or
the lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 8.13, neither the Company, ICON nor any
of their respective Subsidiaries has agreed or consented to cause or permit in
the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien.
9. INFORMATION AS TO COMPANY AND ICON.
9.1. Financial and Business Information.
The Company and ICON shall deliver to you:
(a) Quarterly Statements -- within sixty (60) days after the end of
each quarterly fiscal period in each fiscal year of the Company and ICON
duplicate copies of,
(i) consolidated balance sheets of the Company, ICON and their
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company, ICON and their Subsidiaries, for such
quarter and (in the case of the second, third and fourth quarters) for the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP or IAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the companies
being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that delivery within the
time period specified above of copies of a Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this Section 6.1(a) with respect to the Person filing such report;
(b) Annual Statements -- within one hundred and five (105) days after
the end of each fiscal year of the Company and ICON duplicate copies of,
(i) a consolidated balance sheet of the Company, ICON and their
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company, ICON and their Subsidiaries, for such
year,
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setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
or IAAP, and accompanied
(A) by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP or IAAP, and that the examination
of such accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they have reviewed this
Agreement and stating further whether, in making their audit, they have become
aware of any condition or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it being understood
that such accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an audit in
accordance with generally accepted auditing standards or did not make such an
audit),
provided that the delivery within the time period specified above of an
Annual Report on Form 10-K for such fiscal year (together with an annual report
to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with the
Securities and Exchange Commission, together with the accountant's certificate
described in clause (B) above, shall be deemed to satisfy the requirements of
this Section 6.1(b) with respect to the Person filing such report;
(c) SEC and Other Reports -- promptly upon their becoming available, one
copy of (i) each financial statement, report, notice or proxy statement sent by
the Company, ICON or any of their Subsidiaries to public securities holders
generally, and (ii) each regular or periodic report, each registration statement
and each prospectus and all amendments thereto filed by the Company, ICON or any
of their Subsidiaries with the Securities and Exchange Commission and of all
press releases and other statements made available generally by the Company,
ICON or any of their Subsidiaries to the public concerning developments that are
Material;
(d) Notice of Default or Event of Default -- promptly, and in any event
within five (5) days after a Responsible Officer becoming aware of the existence
of any Default or Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder, a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto;
(e) Notices from Governmental Authority -- promptly, and in any event
within thirty (30) days of receipt thereof, copies of any notice to the Company,
ICON or any of their Subsidiaries from any Federal, state or other Governmental
Authority relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect; and
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(f) Requested Information -- with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company, ICON or any of their
Subsidiaries or relating to the ability of the Company or ICON to perform their
obligations hereunder or relating to the ability of the Company to perform its
obligations under this Agreement and under the Secured Notes as from time to
time may be reasonably requested by any such holder of Secured Notes.
9.2. Officer's Certificate.
Each set of financial statements delivered pursuant to Section 9.1 hereof
shall be accompanied by a certificate of a Senior Financial Officer of the
Company (a "Compliance Certificate") setting forth:
(a) Covenant Compliance -- a statement that the Company, ICON and each of
their Subsidiaries are in compliance with all covenants and obligations under
this Agreement; and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company, ICON
and their Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the certificate
and that such review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an Event of Default or,
if any such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
9.3. Inspection.
The Company and ICON shall permit you and your representatives upon prior
appointment to visit the offices of the Company, ICON and their Subsidiaries to
examine the books of account, records, reports and other papers (the "Company
Information") and to make copies and extracts therefrom.
10. PREPAYMENT OF THE NOTES.
10.1. Optional Prepayments
The Company may, at its option, upon notice as provided below, prepay at
any time all, or from time to time, a portion of the Secured Notes, in an amount
not less than $1,000,000 (US dollars one million) at one hundred (100) per cent
of the principal amount so prepaid. The Company will give you not less than two
(2) Business Days written notice of each optional prepayment under this Section
10. Each such notice shall specify a prepayment date and the aggregate principal
amount of the Secured Notes to be prepaid on such date.
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10.2. Credit for Partial Prepayments.
In the case of each partial prepayment of the Secured Notes, the principal
amount of the Secured Notes to be prepaid shall be applied as a credit to the
Company's obligation to pay the Secured Notes in inverse order of maturity.
11. DELIVERY OF PROMISSORY NOTES TO COMPANY
Subject to the terms and conditions of the Pledge Agreement, the Company
shall give you notice of its repayment of the Secured Notes as the same are paid
in accordance with their terms. So long as no Default or Event of Default has
occurred and is continuing, you shall deliver the Promissory Notes to the
Company upon payment by the Company of the amount due in accordance with Section
1 hereof on December 15, 1999 and any other amounts due with respect to such
payments.
12. AFFIRMATIVE COVENANTS.
The Company and ICON covenant that so long as any of the Secured Notes are
outstanding:
12.1. Compliance with Law.
The Company and ICON will and will cause each of their Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
12.2. Insurance.
The Company and ICON will and will cause each of their Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
12.3. Maintenance of Properties.
The Company and ICON will and will cause each of their Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent
the Company, ICON or any of their Subsidiaries from discontinuing the operation
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and the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
12.4. Payment of Taxes and Claims.
The Company and ICON will and will cause each of their Subsidiaries to file
all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company, ICON or any of their
Subsidiaries, provided that neither the Company, ICON nor any of their
Subsidiaries need pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by the Company, ICON or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and
the Company, ICON or a Subsidiary has established adequate reserves therefore in
accordance with GAAP or IAAP on the books of the Company, ICON or such
Subsidiary or (ii) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
12.5. Corporate Existence, etc.
The Company and ICON will at all times preserve and keep in full
force and effect its corporate existence. Subject to Section 13.2 the Company
and ICON will and will cause each other to at all times preserve and keep in
full force and effect the corporate existence of each of its Subsidiaries
(unless merged into the Company, ICON or a Subsidiary) and all rights and
franchises of the Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise could not, individually or
in the aggregate, have a Material Adverse Effect.
13. NEGATIVE COVENANTS.
The Company and ICON covenant that so long as any of the Secured
Notes are outstanding:
13.1. Transactions with Affiliates.
The Company and ICON will not and will not permit the Company, ICON or any
of their Subsidiaries to enter into directly or indirectly any transaction or
Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate, except in the ordinary course and pursuant to
the reasonable requirements of the Company's, ICON's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company,
ICON or such Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
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13.2. Merger, Consolidation, etc.
The Company and ICON will not and will not permit any of their Subsidiaries
to consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person.
13.3 Sale of Assets
The Company and ICON will not and will not permit any of their Subsidiaries
(whether by a single transaction or a number of related or unrelated
transactions and whether at the same time or over a period of time) to sell or
otherwise dispose of, outside the ordinary course of its business, any asset.
13.4 Restriction or Share Redemptions and Distributions
The Company and ICON will not and will not permit any of their Subsidiaries
to:
(a) redeem, purchase or otherwise acquire any shares of capital stock; or
(b) pay any dividend or make any other distribution in respect of any
class of its shares except (i) any distribution or dividend made by a
Subsidiary to ICON or the Company, and (ii) any distribution or
dividend made to any public shareholders where a distribution or
dividend is being made by Coastal to ICON .
13.5 Repayment of Indebtedness
The Company and ICON will not and will not permit their Subsidiaries to
repay any Indebtedness other than in accordance with the terms of this Agreement
except the repayment of Indebtedness listed in Schedule 8.13 of this Agreement.
13.6 Restriction on Investments
The Company and ICON will not and will not permit their Subsidiaries to
make any new or additional investments except those investments listed in
Schedule 13.6..
13.7 Restriction on Indebtedness
The Company and ICON will not and will not permit any of their Subsidiaries
to incur any additional Indebtedness other than Indebtedness arising in the
ordinary course of its business.
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13.8 Restriction on Issue of Capital Stock
The Company and ICON will not and will not permit any of their Subsidiaries
to issue any capital stock except as provided in this Agreement and except the
Coastal rights issue the details of which are set out in Schedule 13.8..
13.9 Liens.
The Company and ICON will not and will procure that none of the Company,
ICON or their Subsidiaries will create or agree or attempt to create or permit
to subsist (in favor of any person other than you) any lien over the whole or
any part of its undertaking or assets (including, without limitation revenues)
present or future or agree to do so except liens arising in the ordinary course
of its business.
13.10 Restrictions on Dividends of Subsidiaries, etc.
The Company and ICON will not, and will not permit any of their
Subsidiaries to enter into any agreement which would restrict any Subsidiary's
ability or right to pay dividends to, or make advances to or investments in, the
Company or ICON or, if such Subsidiary is not directly owned by the Company or
ICON, the "parent" Subsidiary of such Subsidiary.
14. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any Secured Note when the same
becomes due and payable, whether at maturity or by declaration or otherwise; or
(b) the Company or ICON defaults in the performance of or compliance with
any term contained in this Agreement; or
(c) (i)TTI defaults in the performance of or compliance with any term
contained in the TTI Pledge Agreement or the Guaranty; (ii) the Company defaults
in the performance of or compliance with any term contained in the Pledge
Agreement; or
(d) an Event of Default shall have occurred and be continuing under the
Pledge Agreement; or
(e) (i) any representation or warranty made in writing by or on behalf of
the Company or ICON or by any officer of the Company or ICON in this Agreement
or in any writing furnished in connection with the transactions contemplated
hereby proves to have been false or incorrect in any material respect on the
date as of which made; (ii) any representation or warranty made in writing by or
on behalf of the Company or TTI by any officer of the Company
15
or TTI in any of the Security Documents or in any writing furnished in
connection with the transactions contemplated therein proves to have been false
or incorrect in any material respect on the date as of which made; or
(f) (i) the Company, ICON or any of their Subsidiaries is in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or interest on any Indebtedness that is outstanding in an aggregate
principal amount of at least $10,000,000 (US dollars ten million) beyond any
period of grace provided with respect thereto, or (ii) the Company, ICON or any
of their Subsidiaries is in default in the performance of or compliance with any
term of any evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $10,000,000 (US dollars ten million) or of any mortgage,
indenture or other agreement relating thereto or any other condition exists, and
as a consequence of such default or condition such Indebtedness has become, or
has been declared (or one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the passage of
time or the right of the holder of Indebtedness to convert such Indebtedness
into equity interests), (x) the Company, ICON or any of their Subsidiaries has
become obligated to purchase or repay Indebtedness before its regular maturity
or before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $10,000,000 (US dollars ten million), or (y) one or
more Persons have the right to require the Company, ICON or any of their
Subsidiaries so to purchase or repay such Indebtedness; or
(g) the Company, ICON, any of their Subsidiaries, TTI or Coastal (i) is
generally not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or any
other petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv)
consents to the appointment of a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi)
takes corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters an
order appointing, without consent by the Company, ICON, any of their
Subsidiaries, TTI or Coastal a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial part
of its property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company, ICON, any of
their Subsidiaries, TTI or Coastal or any such petition shall be filed against
the Company, ICON, any of their Subsidiaries, TTI or Coastal and such petition
shall not be dismissed within sixty (60) days; or
(i) a final judgment or judgments for the payment of money aggregating in
excess of $1,000,000 (US dollars one million) are rendered against one or more
of the Company, ICON and any of their Subsidiaries and which judgments are not,
within sixty (60) days after entry
16
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay; or
(j) any Security Document ceases to be effective; or
(k) any security given under the Security Document ceases to be
perfected.
15. REMEDIES ON DEFAULT, ETC.
15.1. Acceleration.
(a) If an Event of Default with respect to the Company or ICON described in
paragraph (f) or (g) of Section 14 (other than an Event of Default described in
clause (i) of paragraph (f) or described in clause (vi) of paragraph (f) by
virtue of the fact that such clause encompasses clause (i) of paragraph (f)) has
occurred, all the Secured Notes then outstanding shall automatically become
immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than fifty (50) per cent in principal amount of the
Secured Notes at the time outstanding may at any time at its or their option, by
notice or notices to the Company, declare all the Secured Notes then outstanding
to be immediately due and payable.
(c) If an Event of Default described in paragraph (a) of Section 1 has
occurred and is continuing, any holder or holders of Secured Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Secured Notes held
by it or them to be immediately due and payable.
Upon any Secured Notes becoming due and payable under this Section 15.1,
whether automatically or by declaration, such Secured Notes will forthwith
mature and the entire unpaid principal amount of such Secured Notes, shall all
be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived.
15.2. Other Remedies.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Secured Notes have become or have been declared
immediately due and payable under Section 15.1, the holder of any Secured Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Secured Note, or for an injunction against a violation of any of the terms
hereof or thereof, or in aid of the exercise of any power granted hereby or
thereby or by law or otherwise.
15.3 Foreclosure
(a) Upon an Event of Default, the Collateral Agent may foreclose upon the
assets in the Collateral Pool according to the following procedure:
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(i) any assets in the Collateral Pool (selected at the sole
discretion of the Collateral Agent) may be sold in a commercially reasonable
manner, according to U.S. law, and the sale proceeds applied to satisfaction of
the amounts still due in respect of the unpaid Secured Notes plus interest at
the Default Rate;
(ii) once the proceeds from the sale of assets in the Collateral Pool
equals the amount of the unpaid Secured Notes plus default interest, any
remaining and unsold assets in the Collateral Pool will be relieved of their
pledge and delivered to the Pledgor.
(b) Notwithstanding Section 15.3(a) above, if the payment due of
December 15, 1999 under Section 1 hererof is not paid on such date, you agree
that you shall not foreclose upon the assets in the Collateral Pool until
January 15, 2000 and will not sell such assets prior to February 28, 2000
provided that no other Event of Default has occurred and is continuing.
15.4. Rescission.
At any time after the Secured Notes have been declared due and
payable pursuant to paragraph (b) of Section 15.1, the holders of more than
fifty per cent. (50)% in principal amount of the Secured Notes then outstanding,
by written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all principal of any Security Notes
that are due and payable and are unpaid other than by reason of such
declaration, and any overdue interest in respect of the Secured Notes, at the
Default Rate, (b) all Events of Default and Defaults, other than non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 19, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Secured Notes. No rescission and annulment under this Section 15.3 will extend
to or affect any subsequent Event of Default or Default or impair any right
consequent thereon.
15.5. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any
Secured Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Secured Note upon
any holder thereof shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise. The Company will pay to the holder of each Secured Note
on demand such further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection under this
Section 13, including, without limitation, reasonable attorneys' fees, expenses
and disbursements.
15.6. Interest
(a) Upon any Secured Note becoming due and payable in accordance with
its terms, upon acceleration, or upon the occurrence of an Event of Default and
when an Event of Default has occurred and is continuing, the Secured Note shall
bear interest at the Default Rate.
(b) In the event that the payment due on December 15, 1999 under
Section 1 hereof is not made by January 15, 2000 then a payment of $1,000,000
(US dollars one million)
18
shall be due and payable to you. If this amount remains unpaid after February
28, 2000 Default Rate interest shall accrue in accordance with paragraph (a)
above from that date.
16. REGISTRATION; EXCHANGE; SUBSTITUTION OF SECURED NOTES.
16.1. Registration of Notes.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Secured Notes. The name
and address of each holder of one or more Secured Notes, each transfer thereof
and the name and address of each transferee of one or more Secured Notes shall
be registered in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Secured Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes hereof, and
the Company shall not be affected by any notice or knowledge to the contrary.
The Company shall give to any holder of a Secured Note that is an Institutional
Investor promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered holders of Secured Notes.
16.2. Transfer and Exchange of Notes.
Upon surrender of any Secured Note at the principal executive office
of the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Secured Note or his attorney duly authorized in writing and accompanied by the
address for notices of each transferee of such Note or part thereof), the
Company shall execute and deliver, at the Company's expense (except as provided
below), one or more new Secured Notes (as requested by the holder thereof) in
exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Secured Note. Each such new Secured Note
shall be payable to such Person as such holder may request and shall be
substantially in the form of Schedule 1. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Secured Notes. Secured Notes shall not be transferred in
denominations of less than $100,000, (US dollars one hundred thousand) provided
that if necessary to enable the registration of transfer by a holder of its
entire holding of Secured Notes, one Secured Note may be in a denomination of
less than $100,000 (US dollars one hundred thousand). Any transferee, by its
acceptance of a Secured Note registered in its name (or the name of its
nominee), shall be deemed to have made the representation set forth in Section
9.2.
16.3. Replacement of Secured Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any
Secured Note (which evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and, in the case of mutilation, upon surrender and
cancellation thereof, the Company at its own expense shall execute and deliver,
in lieu thereof, a new Secured Note.
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17. PAYMENTS ON SECURED NOTES.
17.1. Place of Payment.
Subject to Section 17.2, payments of principal, becoming due and
payable on the Secured Notes shall be made in New York, New York at the
principal office of a bank or trust company in New York City designated by you.
17.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Secured
Note, and notwithstanding anything contained in Section 17.1 or in such Secured
Note to the contrary, the Company will pay all sums becoming due on such Secured
Note by the method and at the address specified for such purpose below your name
in Schedule 8, or by such other method or at such other address as you shall
have from time to time specified to the Company in writing for such purpose,
without the presentation or surrender of such Secured Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Secured Note, you shall surrender such Secured Note for cancellation,
reasonably promptly after any such request, to the Company at its principal
executive office or at the place of payment most recently designated by the
Company pursuant to Section 17.1. Prior to any sale or other disposition of any
Secured Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon or surrender such Secured
Note to the Company in exchange for a new Note or Notes pursuant to Section
16.2. The Company will afford the benefits of this Section 17.2 to any
Institutional Investor that the direct or indirect transferee of any Secured
Note purchased by you under this Agreement and that has made the same agreement
relating to such Secured Note as you have made in this Section 17.2.
18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Secured Notes, the purchase or
transfer by you of any Secured Note or portion thereof or interest therein and
the payment of any Secured Note, and may be relied upon by any subsequent holder
of a Secured Note, regardless of any investigation made at any time by or on
behalf of you or any other holder of a Secured Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Secured Notes embody the entire agreement and understanding between you,
the Company, and ICON and supersede all prior agreements and understandings
relating to the subject matter hereof.
19. AMENDMENT AND WAIVER.
19.1. Requirements.
20
This Agreement and the Secured Notes may be amended, and the
observance of any term hereof or of the Secured Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the holders of a majority in aggregate principal amount of the
Secured Notes at the time outstanding except that (a) no amendment or waiver
will be effective as to you unless consented to by you in writing, and (b) no
such amendment or waiver may, without the written consent of the holder of each
Secured Note at the time outstanding affected thereby, (i) subject to the
provisions of Section 15 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of the Secured Notes,
(ii) change the percentage of the principal amount of the Secured Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 5, 10, 14(a), 14(b), 15 or 19.
19.2. Solicitation of Holders of Secured Notes.
The Company will provide the Collateral Agent with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable each holder of Secured Notes to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of
the provisions hereof or of the Secured Notes. The Company will deliver executed
or true and correct copies of each amendment, waiver or consent effected
pursuant to the provisions of this Section 19 to the Collateral Agent promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Secured Notes.
19.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 19
applies equally to all holders of Secured Notes and is binding upon them and
upon each future holder of any Secured Note and upon the Company without regard
to whether such Secured Note has been marked to indicate such amendment or
waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Secured Note nor any delay in exercising any rights
hereunder or under any Secured Note shall operate as a waiver of any rights of
any holder of such Note. As used herein, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
20. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified
for such communications in Schedule 8, or at such other address as you or it
shall have specified to the Company and/or ICON, as applicable, in writing,
21
(ii) if to any other holder of any Secured Note, to such holder at
such address as such other holder shall have specified to the Company and/or
ICON, as applicable, in writing, or
(iii)if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Mr C ▇▇▇▇▇ at such other address as the
Company shall have specified to the holder of each Note in writing.
(iv) if to ICON, to ICON at ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ to the attention of Mr C ▇▇▇▇▇, or at such other address as
ICON shall have specified to you in writing.
Notices under this Section 20 will be deemed given only when actually received.
21. MISCELLANEOUS.
21.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Secured Note) whether so expressed or not.
21.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Secured Notes to the contrary
notwithstanding, any payment on any Secured Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of any interest payable
on such next succeeding Business Day.
21.3. Severability.
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
21.4 Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
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21.5 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
21.6 Governing Law.
This Agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
21.7 Consent to Jurisdiction and Venue.
The Company and ICON hereby irrevocably (i) agree that any suit,
action or other legal proceeding arising out of or relating to this Agreement or
any Secured Note may be brought in a court of record in the State of New York or
in the courts of the United States of America located in such State, (ii)
consent to the jurisdiction of each such court in any such suit, action or
proceeding, and (iii) waive any objection which may have to the laying of venue
of any such claim that any such suit, action or proceeding has been brought in
an inconvenient forum and covenants that it will not seek to challenge the
jurisdiction of any such court or seek to oust the jurisdiction of any such
court, whether on the basis of inconvenient forum otherwise. The Company and
ICON irrevocably consent to the service of any and all process in any such suit,
action or proceeding by mail copies of such process to either of them at the
address for notices provided in Section 20. The Company and ICON agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. All mailings under this Section 21.7 shall be by registered or
certified mail, return receipt requested. Nothing in this Section 21.7 shall
affect your right to serve legal process in any other manner permitted by law or
affect your right to bring any suit, action or proceeding against the Company or
ICON or any of its properties in the courts of any other jurisdiction.
21.8 Waiver of Jury Trial
The Company, ICON and you hereby irrevocably waive trial by jury in
any legal action or proceeding relating to this Agreement or the Secured Notes
and for any counterclaim related thereto.
21.9 Agent for Service of Process
The Company and ICON hereby irrevocably appoint and designate CT
Corporation System, or any other person having and maintaining a place of
business in the State of New York whom the Company and ICON may from time to
time hereafter designate (having
23
given thirty (30) days' notice thereof to you), as the true and lawful attorney
and duly authorized agent for acceptance of service of legal process of the
Company and ICON.
Without prejudice to the foregoing, each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 21. Nothing in this Agreement will affect the right of any party to
service process in any other manner permitted by law.
21.10 Term
Except as provided in Sections 16 and 17 hereof, this Agreement will
terminate when the Secured Notes have been paid in full.
21.11 General Indemnity.
The Company and ICON will fully indemnify you and any of your affiliates,
officers, directors, and employees and each person, if any, who controls you
within the meaning of the Securities ▇▇▇ ▇▇▇▇ or the Securities ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ on demand from and against any expense (including legal fees), loss, damage
or liability which you may incur as a consequence of any sum not being paid when
due, the occurrence of a Default or an Event of Default or otherwise in
connection with a breach by the Company or ICON of this Agreement or the Pledge
Agreement or a breach by the Guarantor of the TTI Pledge Agreement or Guaranty
or a breach by the Company or ICON of any order, judgment, decree or ruling of
any court, arbitrator or Governmental Authority applicable to them or a
violation by the Company or ICON of any statute or other rule or regulation of
any Governmental Authority..
21.12 Joint and Several Liabilities
The liability of the Company and ICON shall be joint and several.
21.13 Restriction on Sale
You agree that you will not sell any or all of the Secured Notes without
the consent of the Company/ICON, such consent not to be unreasonably
withheld or delayed.
* * * * *
24
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon, once signed by all parties hereto, the foregoing shall
become a binding agreement between you, the Company and ICON.
Very truly yours,
BALEINE INVESTMENT HOLDINGS, LIMITED
/s/ R. Mamoch
By: R. Mamoch
Title: Directo
ICON SYSTEMS INC.
/s/ Illegible
By: Illegible
Title: President and Director
The foregoing is hereby agreed as at the date hereof.
CREDIT SUISSE FIRST BOSTON (HONG
KONG) LTD.
/s/ Lap ▇▇▇ ▇▇▇▇
By: Lap ▇▇▇ ▇▇▇▇
Title: Director
25
SCHEDULE 1
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, ten per cent. (10%) or more of any class of voting or equity
interests of the Company, ICON or any Subsidiary of the Company of ICON or any
corporation of which the Company, ICON and their Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, ten per cent. (10%) or more
of any class of voting or equity interests. As used in this definition,
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise. Unless the
context otherwise clearly requires, any reference to an "Affiliate" is a
reference to an Affiliate of the Company.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City are required or authorized to be
closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Closing" is defined in Section 3
---------
"Coastal" means Coastal Group Limited
"Coastal Acquisition" shall have the meaning given thereto in the TTI
Pledge Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to time.
"Collateral Agency Agreement" means the collateral agency agreement
dated the date hereof between CSFB and the Company.
"Collateral Agent" means CSFB.
"Collateral Pool" means the Promissory Notes, the intercompany notes
pledged under the Pledge Agreement and the Pledged Shares.
26
"Company" means Baleine Investment Holdings, Limited, a
British Virgin Island corporation.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means twelve (12) per cent per annum.
"Event of Default" is defined in Section 13
----------
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company, ICON or any Subsidiary of
the Company or ICON conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company, ICON or any Subsidiary of the
Company or ICON, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
27
In any computation of the indebtedness or other liabilities of the obligor under
any guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"Guarantor" means TTI.
"Guaranty" means the guaranty dated the date hereof between TTI and
the Collateral Agent.
"holder" means, with respect to any Secured Note, the Person in whose
name such Secured Note is registered in the register maintained by the Company
pursuant to Section 13.1.
"IAAP" means international accounting standards as promulgated by the
International Accounting Standards Committee and as understood and applied on
such date of determination.
"Indebtedness" with respect to any Person means, at any
time, without duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP or IAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed or
otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing obligations
for borrowed money);
(f) swaps of such Person; and
(g) any guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP or IAAP.
28
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company,
ICON and their Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company, ICON and their Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Secured Notes,
or (c) the validity or enforceability of this Agreement or the Secured Notes.
"Secured Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Pledge Agreement" means the Pledge Agreement, dated the date hereof,
made between you and the Company.
"Pledged Shares" means all those shares pledged by the Company under
the Pledge Agreement and by TTI under the TTI Pledge Agreement.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇
or inchoate.
"Responsible Officer" means any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
29
"Security Documents" means the Pledge Agreement, the TTI Pledge
Agreement, and the Guaranty.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Company.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a fifty per cent. (50%) interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries or such Person and one or more
of its Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company or ICON.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TTI" means TTI Limited.
"TTI Pledge Agreement" means the pledge agreement, dated the date
hereof, between TTI and the Collateral Agent.
30
SCHEDULE 2A
PROMISSORY NOTES
[Not filed with Schedule 13D]
31
SCHEDULE 2b
PROMISSORY NOTES
RELEASED AT CLOSING
[Not filed with Schedule 13D]
32
SCHEDULE 8.4A
COMPANY'S SUBSIDIARIES
[Not filed with Schedule 13D]
33
SCHEDULE 8.4 B
ICON'S SUBSIDIARIES
[Not filed with Schedule 13D]
34
SCHEDULE 8.5
FINANCIAL STATEMENTS
[Not filed with Schedule 13D]
35
SCHEDULE 8.8
LITIGATION
None
36
SCHEDULE 8.11
PATENTS ETC.
None
37
SCHEDULE 8.13
EXISTING INDEBTEDNESS
[Not filed with Schedule 13D]
38
SCHEDULE 13.6
INVESTMENTS
[Not filed with Schedule 13D]
39
SCHEDULE 13.8
DETAILS OF COASTAL RIGHTS ISSUE
[Not filed with Schedule 13D]
40
EXHIBIT 1
[FORM OF NOTE]
[NAME OF ISSUER]
SECURED NOTE DUE [ , ]
-------------------- --------
No. [ ] [Date]
----------
$[ ]
FOR VALUE RECEIVED, the undersigned, [NAME OF ISSUER] (herein called
the "Company"), a corporation organized and existing under the laws of , hereby
promises to pay to [ ], or registered assigns, the principal sum of [ ] DOLLARS
on [ , ], with interest on any overdue payment of principal payable semiannually
on _______and _______ (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to twelve (12) per cent per
annum.
Payments of principal of, and any interest on this Secured Note are
to be made in lawful money and any of the United States of America at [ ] or at
such other place as the Company shall have designated by written notice to the
holder of this Secured Note as provided in the Note Purchase Agreements referred
to below.
This Secured Note is one of a series of Secured Notes (herein called
the "Secured Notes") issued pursuant to Note Purchase Agreement, dated as of [
], 199[ ] (as from time to time amended, the "Note Purchase Agreements"),
between the Company and the original Purchaser named therein who is entitled to
the benefits thereof.
The Secured Notes are secured by (i) the Pledge Agreement, dated, [
], 1999 among the Company and the original purchaser of the Secured Notes and
(ii) the TTI Pledge Agreement, dated [ ], 1999 among TTI and the original
purchaser of the Secured Notes.
By acceptance of this Secured Note the holder agrees to be bound by
the provisions of the Note Purchase Agreement and Collateral Agency Agreement.
This Secured Note is a registered Secured Note and, as provided in
the Note Purchase Agreement, upon surrender of this Secured Note for
registration of transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or such holder's
attorney duly authorized in writing, a new Secured Note for a like principal
amount will be issued to, and registered in the name of, the transferee. Prior
to due presentment for registration of transfer, the Company may treat the
person in whose name this Secured Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Company will
not be affected by any notice to the contrary.
41
This Note is subject to optional prepayment, in whole or in part, at
the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Secured Note may be declared or
otherwise become due and payable in the manner, interest shall be due at the
rate of twelve (12) per cent. per annum and with the effect provided in the Note
Purchase Agreement.
This note shall be construed and enforced in accordance with the law
of the State of New York.
[NAME OF ISSUER]
By ______________________
[Title]
42