EXHIBIT 5.35
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REVOLVING CREDIT AGREEMENT
dated as of
January 11, 2000
▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
("Borrower")
and
ICE HOLDINGS NORTH AMERICA, LLC
("Lender")
$1,000,000
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TABLE OF CONTENTS
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Page
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ARTICLE I.......................................................................................................... 1
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1.1 Definitions............................................................................................... 1
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"ADA"..................................................................................................... 1
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"Affiliate"............................................................................................... 1
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"Agreement"............................................................................................... 1
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"Asset Sale".............................................................................................. 1
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"Bankruptcy Code"......................................................................................... 1
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"Borrower"................................................................................................ 1
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"Borrowing"............................................................................................... 1
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"Business Day"............................................................................................ 2
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"Capital Expenditures".................................................................................... 2
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"Capital Lease"........................................................................................... 2
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"Capital Lease Obligations"............................................................................... 2
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"Change of Control"....................................................................................... 2
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"Closing Date"............................................................................................ 2
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"Compliance Certificate".................................................................................. 2
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"Debt".................................................................................................... 3
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"Debt Financing Fee"...................................................................................... 3
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"Distributions"........................................................................................... 3
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"Dollars"................................................................................................. 3
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"ERISA"................................................................................................... 3
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"ERISA Event"............................................................................................. 3
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"ERISA Group"............................................................................................. 3
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"Event of Default"........................................................................................ 3
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"Fees".................................................................................................... 3
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"Financial Statement(s)".................................................................................. 3
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"GAAP".................................................................................................... 4
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"Governing Documents"..................................................................................... 4
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"Governmental Authority".................................................................................. 4
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"Hazardous Materials"..................................................................................... 4
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"Insolvency Proceeding"................................................................................... 4
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"Indemnified Person(s)"................................................................................... 4
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"Internal Revenue Code"................................................................................... 5
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"Late Payment Fee"........................................................................................ 5
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"Lender".................................................................................................. 5
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"Lender Expenses"......................................................................................... 5
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"Lending Rate"............................................................................................ 5
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"Lien".................................................................................................... 5
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"Loans"................................................................................................... 5
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"Loan Document(s)"........................................................................................ 5
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"Lockbox Agreement"....................................................................................... 6
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"Material Adverse Effect"................................................................................. 6
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"Multiemployer Plan"...................................................................................... 6
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"Notes"................................................................................................... 6
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"Notice of Borrowing"..................................................................................... 6
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"Obligations"............................................................................................. 6
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"Operating Lease"......................................................................................... 6
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"Participant"............................................................................................. 7
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"PBGC".................................................................................................... 7
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"Permitted Debt".......................................................................................... 7
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"Permitted Investments"................................................................................... 7
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"Permitted Liens"......................................................................................... 7
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"Person".................................................................................................. 7
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"Plan".................................................................................................... 8
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"Purchase Money Lien"..................................................................................... 8
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"Real Estate Leases"...................................................................................... 8
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"Reportable Event"........................................................................................ 8
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"Responsible Officer"..................................................................................... 8
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"Retiree Health Plan"..................................................................................... 8
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"Revolving Credit Commitment"............................................................................. 8
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"Revolving Loans"......................................................................................... 8
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"Revolving Loans Daily Balances".......................................................................... 8
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"Revolving Loans Maturity Date"........................................................................... 8
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"Revolving Note".......................................................................................... 9
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"Security Agreement"...................................................................................... 9
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"Solvent"................................................................................................. 9
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"Subsidiary".............................................................................................. 9
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"Swaps"................................................................................................... 9
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"Taxes"................................................................................................... 9
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"Transferee".............................................................................................. 9
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"Unfunded Liabilities"................................................................................... 10
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"Unmatured Event of Default"............................................................................. 10
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"Warrants"............................................................................................... 10
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1.2 Accounting Terms and Determinations...................................................................... 10
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1.3 Computation of Time Periods.............................................................................. 10
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1.4 Construction............................................................................................. 10
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1.5 Exhibits and Schedules................................................................................... 10
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1.6 No Presumption Against Any Party......................................................................... 10
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1.7 Independence of Provisions............................................................................... 11
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ARTICLE II........................................................................................................ 11
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2.1 Revolving Loans ......................................................................................... 11
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2.2 Notice of Borrowing Requirements......................................................................... 11
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2.3 Interest Rates; Payments of Interest..................................................................... 12
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2.4 Notes; Statements of Obligations......................................................................... 12
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2.5 Holidays................................................................................................. 13
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2.6 Time and Place of Payments............................................................................... 13
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2.7 Debt Financing Fee................................................................................................ 13
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ARTICLE III................................................................................................................ 13
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3.1 Conditions to Initial Loan or Letter of Credit.................................................................... 13
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3.2 Conditions to all Loans .......................................................................................... 15
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ARTICLE IV................................................................................................................. 15
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4.1 Legal Status...................................................................................................... 15
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4.2 No Violation; Compliance.......................................................................................... 16
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4.3 Authorization; Enforceability..................................................................................... 16
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4.4 Approvals; Consents............................................................................................... 16
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4.5 Liens............................................................................................................. 16
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4.6 Debt.............................................................................................................. 16
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4.7 Litigation........................................................................................................ 16
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4.8 No Default........................................................................................................ 16
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4.9 Subsidiaries...................................................................................................... 16
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4.10 Taxes............................................................................................................. 17
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4.11 Correctness of Financial Statements............................................................................... 17
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4.12 ERISA............................................................................................................. 17
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4.13 Other Obligations................................................................................................. 17
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4.14 Public Utility Holding Company Act................................................................................ 17
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4.15 Investment Company Act............................................................................................ 17
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4.16 Patents, Trademarks, Copyrights, and Intellectual Property, etc................................................... 18
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4.17 Environmental Condition........................................................................................... 18
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4.18 Solvency.......................................................................................................... 18
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4.19 Real Estate Leases................................................................................................ 18
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4.20 Compliance With ADA............................................................................................... 18
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ARTICLE V.................................................................................................................. 19
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5.1 Punctual Payments................................................................................................. 19
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5.2 Books and Records................................................................................................. 19
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5.3 Financial Statements.............................................................................................. 19
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5.4 Existence; Preservation of Licenses; Compliance with Law.......................................................... 20
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5.5 Insurance......................................................................................................... 21
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5.6 Assets............................................................................................................ 21
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5.7 Taxes and Other Liabilities....................................................................................... 21
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5.8 Notice to Lender.................................................................................................. 22
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5.9 Employee Benefits................................................................................................. 22
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5.10 Further Assurances................................................................................................ 23
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5.11 Bank Accounts..................................................................................................... 23
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5.12 Environment....................................................................................................... 23
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5.13 Real Estate Leases................................................................................................ 23
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5.14 ADA............................................................................................................... 23
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ARTICLE VI................................................................................................................. 24
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6.1 Use of Funds; Margin Regulation................................................................................... 24
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6.2 Debt............................................................................................................. 24
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6.3 Liens............................................................................................................ 24
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6.4 Merger, Consolidation, Transfer of Assets........................................................................ 24
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6.5 Leases........................................................................................................... 24
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6.6 Sales and Leasebacks............................................................................................. 25
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6.7 Asset Sales...................................................................................................... 25
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6.8 Investments...................................................................................................... 25
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6.9 Character of Business............................................................................................ 25
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6.10 Distributions.................................................................................................... 25
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6.11 Guaranty......................................................................................................... 25
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6.12 Transactions with Affiliates..................................................................................... 25
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6.13 Stock Issuance................................................................................................... 26
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6.14 Transactions Under ERISA......................................................................................... 26
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ARTICLE VII............................................................................................................... 27
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7.1 Events of Default................................................................................................ 27
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7.2 Remedies......................................................................................................... 28
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7.3 Remedies Cumulative.............................................................................................. 28
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ARTICLE VIII.............................................................................................................. 29
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8.1 Taxes on Payments................................................................................................ 29
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8.2 Indemnification For Taxes........................................................................................ 29
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8.3 Evidence of Payment.............................................................................................. 29
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ARTICLE IX................................................................................................................ 29
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9.1 Notices.......................................................................................................... 29
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9.2 No Waivers....................................................................................................... 30
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9.3 Lender Expenses; Documentary Taxes; Indemnification.............................................................. 30
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9.4 Amendments and Waivers........................................................................................... 31
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9.5 Successors and Assigns; Participations; Disclosure............................................................... 31
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9.6 Counterparts; Effectiveness; Integration......................................................................... 32
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9.7 Severability..................................................................................................... 32
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9.8 Governing Law.................................................................................................... 32
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9.9 Judicial Reference............................................................................................... 32
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EXHIBITS AND SCHEDULES
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Exhibit 2.4(b) - Form of Notice of Borrowing
Exhibit 3.1(b) - Form of Opinions of Borrower's Counsel
Exhibit 5.3(c) - Form of Compliance Certificate
Exhibit 9.6 - Engagement Letter
Schedule 4.7 - Litigation
Schedule 4.9 - Subsidiaries
Schedule 4.12 - Employee Benefit Plans
Schedule 4.18 - Real Estate Leases
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REVOLVING CREDIT AGREEMENT
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This REVOLVING CREDIT AGREEMENT, dated as of January 11, 2000, is
entered into among Borrower and Lender.
The parties hereto agree as follows:
DEFINITIONS AND INTERPRETATIONS
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1.1 Definitions.
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The following terms, as used herein, shall have the following meanings:
"ADA" means the Americans with Disabilities Act, 42 U.S.C. (S) 12101,
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et. seq., and all applicable rules and regulations promulgated thereunder.
"Affiliate" means any Person (i) that, directly or indirectly,
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controls, is controlled by or is under common control with Borrower or any
Subsidiary; (ii) which directly or indirectly beneficially owns or controls five
percent (5%) or more of any class of voting stock of Borrower or any Subsidiary;
or (iii) five percent (5%) or more of the voting stock of which is directly or
indirectly beneficially owned or held by Borrower or any Subsidiary. For
purposes of the foregoing, "control" (including "controlled by" and "under
common control with") shall mean 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.
"Agreement" means this Revolving Credit Agreement, together with any
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concurrent or subsequent rider, amendment, schedule or exhibit to this Term Loan
and Revolving Credit Agreement.
"Asset" means any interest of a Person in any kind of property or
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asset, whether real, personal, or mixed real and personal, and whether tangible
or intangible.
"Asset Sale" means any sale, transfer or other disposition of
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Borrower's or any Subsidiary's businesses or Asset(s) now owned or hereafter
acquired, including shares of stock and indebtedness of any Subsidiary,
receivables and leasehold interests.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978 (Pub. L.
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No. 95-598; 11 U.S.C.), as amended or supplemented from time to time, or any
successor statute, and any and all rules and regulations issued or promulgated
in connection therewith.
"Borrower" means ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. and its subsidiaries and
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affiliates.
"Borrowing" means a borrowing of a Revolving Loan pursuant to the
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terms and conditions hereof.
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"Business Day" means any day other than a Saturday, a Sunday, or a
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day on which commercial banks in the City of New York are authorized or required
by law or executive order or decree to close.
"Capital Expenditures" means expenditures made in cash, or financed
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with long term debt, by any Person for the acquisition of any fixed Assets or
improvements, replacements, substitutions, or additions thereto that have a
useful life of more than one (1) year, including the direct or indirect
acquisition of such Assets by way of increased product or service charges,
offset items, or otherwise, and the principal portion of payments with respect
to Capital Lease Obligations, calculated in accordance with GAAP.
"Capital Lease" means any lease of an Asset by a Person as lessee
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which would, in conformity with GAAP, be required to be accounted for as an
Asset and corresponding liability on the balance sheet of that Person.
"Capital Lease Obligations" of a Person means the amount of the
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obligations of such Person under all Capital Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Change of Control" means the time at which (i) any Person (including
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a Person's Affiliates and associates) or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) (other than the
shareholders of Borrower on the Closing Date) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of a percentage
(based on voting power, in the event different classes of stock shall have
different voting powers) of the voting stock of Borrower equal to at least
thirty percent (30%), or such Person or group shall otherwise obtain the power
to control the election of the Board of Directors of Borrower, (ii) there shall
be consummated any consolidation or merger of Borrower pursuant to which
Borrower's common stock (or other capital stock) would be converted into cash,
securities or other property, other than a merger or consolidation of Borrower
in which the holders of such common stock (or other capital stock) immediately
prior to the merger have the same proportionate ownership, directly or
indirectly, of common stock of the surviving corporation immediately after the
merger as they had of Borrower's common stock immediately prior to such merger,
(iii) all or substantially all of Borrower's Assets shall be sold, leased,
conveyed or otherwise disposed of as an entirety or substantially as an entirety
to any Person (including an Affiliate or associate of Borrower) in one or a
series of transactions, or (iv) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ both
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fail for any reason to serve actively as the President/CEO and Chief Technology
Officer/Secretary, Treasurer respectively of Borrower, whether by reason of
death, disability, resignation, action by the Board of Directors or shareholders
of Borrower, or otherwise.
"Closing Date" means the date when all of the conditions set forth
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in Section 3.1 have been fulfilled to the satisfaction of Lender and its
counsel.
"Compliance Certificate" means a certificate of compliance to be
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delivered quarterly in accordance with Section 5.3(c), substantially in the form
of Exhibit 5.3(c).
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"Debt" means, as of the date of determination, the sum, but without
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duplication, of any and all of a Person's: (i) indebtedness heretofore or
hereafter created, issued, incurred or assumed by such Person (directly or
indirectly) for or in respect of money borrowed; (ii) Capital Lease Obligations;
(iii) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (iv) obligations for the deferred purchase price of property or
services (including trade obligations; (v) current liabilities in respect of
unfunded vested benefits under any Plan; (vi) obligations under letters of
credit; (vii) obligations under acceptance facilities; (viii) obligations under
all guaranties, endorsements (other than for collection or deposit in the
ordinary course of business), and other contingent obligations to purchase, to
provide funds for payment, or supply funds to invest in any other Person, or
otherwise to assure a creditor against loss; (ix) obligations secured by any
Lien, whether or not such obligations have been assumed; and (x) Swaps.
"Debt Financing Fee" has the meaning set forth in Section 2.7(a).
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"Distributions" means dividends or distributions of earnings made by
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Borrower to its shareholders.
"Dollars" or "$" means lawful currency of the United States of
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America.
"ERISA" means the Employee Retirement Income Security Act of 1974,
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as amended from time to time, or any successor statute, and any and all
regulations thereunder.
"ERISA Event" means (a) a Reportable Event with respect to a Plan or
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Multiemployer Plan, (b) the withdrawal of a member of the ERISA Group from a
Plan during a plan year in which it was a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA), (c) the providing of notice of intent to terminate
a Plan in a distress termination (as described in Section 4041(c) of ERISA), (d)
the institution by the PBGC of proceedings to terminate a Plan or Multiemployer
Plan, (e) any event or condition (i) that provides a basis under Section
4042(a)(1), (2), or (3) of ERISA for the termination of or the appointment of a
trustee to administer, any Plan or Multiemployer Plan, of (ii) that may result
in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f)
the partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA of a member of the ERISA Group from a Multiemployer Plan, or (g)
providing any security to any Plan under Section 401(a)(29) of the Internal
Revenue Code by a member of the ERISA Group.
"ERISA Group" means Borrower and all members of a controlled group of
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corporations and all trades or business (whether or not incorporated) under
common control which, together with Borrower are treated as a single employer
under Section 414 of the Internal Revenue Code.
"Event of Default" has the meaning set forth in Section 7.1.
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"Fees" means the Debt Financing Fee, and the Late Payment Fee.
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"Financial Statement(s)" means, with respect to any accounting period
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of any Person, statements of income and statements of cash flows of such Person
for such period, and
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balance sheets of such Person as of the end of such period, setting forth in
each case in comparative form figures for the corresponding period in the
preceding fiscal year or, if such period is a full fiscal year, corresponding
figures from the preceding annual audit, all prepared in reasonable detail and
in accordance with GAAP, subject to year-end adjustments in the case of monthly
Financial Statements. Financial Statement(s) shall include the schedules thereto
and annual Financial Statements shall also include the footnotes thereto.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied, which are in effect as of the date of
this Agreement. If any changes in accounting principles from those in effect on
the date hereof are hereafter occasioned by promulgation of rules, regulations,
pronouncements or opinions by or are otherwise required by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar functions), and any
of such changes results in a change in the method of calculation of, or affects
the results of such calculation of, any of the financial covenants, standards or
terms found herein, then the parties hereto agree to enter into and diligently
pursue negotiations in order to amend such financial covenants, standards or
terms so as to equitably reflect such changes, with the desired result that the
criteria for evaluating financial condition and results of operations of
Borrower and the Subsidiaries shall be the same after such changes as if such
changes had not been made.
"Governing Documents" means the certificate or articles of
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incorporation, by-laws, or other organizational or governing documents of any
Person.
"Governmental Authority" means any federal, state, local or other
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governmental department, commission, board, bureau, agency, central bank, court,
tribunal or other instrumentality or authority or subdivision thereof, domestic
or foreign, exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Hazardous Materials" means all or any of the following: (a)
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substances that are defined or listed in, or otherwise classified pursuant to,
any applicable laws or regulations as "hazardous substances," "hazardous
materials," "hazardous wastes," "toxic substances," or any other formulation
intended to define, list, or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, or "EP toxicity" or are otherwise regulated for the
protection of persons, property or the environment; (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas,
drilling fluids, produced waters, and other wastes associated with the
exploration, development, or production of crude oil, natural gas, or geothermal
resources; (c) any flammable substances or explosives or any radioactive
materials; and (d) asbestos in any form or electrical equipment which contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of fifty (50) parts per million.
"Insolvency Proceeding" means any proceeding commenced by or against
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any Person, under any provision of the Bankruptcy Code, or under any other
bankruptcy or insolvency law, including, but not limited to, assignments for the
benefit of creditors, formal or informal moratoriums, compositions, or
extensions with some or all creditors.
"Indemnified Person(s)" has the meaning given to such term in Section
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9.3(c).
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"Internal Revenue Code" means the Internal Revenue Code of 1986, as
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amended from time to time, or any successor statute, and any and all regulations
thereunder.
"Late Payment Fee" has the meaning given to such term in Section
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2.9(d).
"Lender" means ICE Holdings North America, LLC, a Delaware Limited
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Liability Company.
"Lender Expenses" means (i) all expenses of Lender paid or incurred in
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connection with Lender's due diligence and investigation of Borrower, including
appraisal, filing, recording, documentation, publication and search fees and
other such expenses, and all attorneys' fees and expenses incurred in connection
with the structuring, negotiation, drafting, preparation, execution and delivery
of this Agreement, the Loan Documents, and any and all other documents,
instruments and agreements entered into in connection herewith up to a maximum
of US$75,000.00; (ii) all expenses of Lender paid or incurred in connection with
or pursuant to any proceedings arising under the Bankruptcy Code; ( iii) all
expenses of Lender, including attorneys' fees and expenses (including attorneys'
fees incurred pursuant to proceedings arising under the Lender Bankruptcy Code)
paid or incurred in connection with the negotiation, preparation, execution and
delivery of any waiver, forbearance, consent, amendment or addition to this
Agreement or any Loan Document, or the termination hereof and thereof; ( iv) all
costs or expenses paid or advanced by Lender which are required to be paid by
Borrower under this Agreement or the Loan Documents, including taxes and
insurance premiums of every nature and kind of Borrower; and ( v) if an Event of
Default occurs, all expenses paid or incurred by Lender, including attorneys'
fees and expenses (including attorneys' fees incurred pursuant to proceedings
arising under the Lender Bankruptcy Code), costs of collection, suit,
arbitration, judicial reference and other enforcement proceedings, and any other
out-of-pocket expenses incurred in connection therewith or resulting therefrom,
whether or not suit is brought, or in connection with any refinancing or
restructuring of the Obligations and the liabilities of Borrower under this
Agreement, any of the Loan Documents, or any other document, instrument or
agreement entered into in connection herewith in the nature of a "workout."
"Lending Rate" means the per annum rate equal to eleven (11%) per cent
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per anum.
"Lien" means any mortgage, deed of trust, pledge, security interest,
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hypothecation, assignment, deposit arrangement or other preferential
arrangement, charge or encumbrance (including, any conditional sale or other
title retention agreement, or finance lease) of any kind.
"Loans" means the Revolving Loans.
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"Loan Document(s)" means each of the following documents, instruments,
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and agreements individually or collectively, as the context requires:
(i) the Revolving Note;
(ii) the Security Agreement;
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(iii) the Lockbox Agreement;
(iv) the Warrant; and
(v) such other documents, instruments, and agreements
(including control agreements, financing statements and fixture filings) as
Lender may reasonably request in connection with the transactions
contemplated hereunder or to perfect or protect the liens and security
interests granted to Lender in connection herewith.
"Lockbox Agreement" means that certain agreement among Lender,
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Borrower and Republic National Bank, N.A. or such other bank that is acceptable
to Lender.
"Material Adverse Effect" means a material adverse effect on (i) the
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business, Assets, condition (financial or otherwise), results of operations, or
prospects of Borrower, or any Subsidiary, (ii) the ability of Borrower to
perform its obligations under this Agreement (including, without limitation,
repayment of the Obligations as they come due), or (iii) the validity or
enforceability of this Agreement, the Loan Documents, or the rights or remedies
of Lender hereunder and thereunder.
"Multiemployer Plan" means a "multiemployer plan" as defined in (S)
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4001(a)(3) of ERISA or (S) 3(37) of ERISA to which any member of the ERISA Group
has contributed, or was obligated to contribute, within the preceding six plan
years (while a member of such ERISA Group) including for these purposes any
Person which ceased to be a member of the ERISA Group during such six year
period.
"Notes" means the Revolving Note.
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"Notice of Borrowing" means an irrevocable notice from Borrower to
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Lender of Borrower's request for a Borrowing pursuant to the terms of Section
2.4(b), substantially in the form of Exhibit 2.4(b).
"Obligations" means any and all indebtedness, liabilities, and
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obligations of Borrower owing to Lender and to its successors and assigns,
previously, now, or hereafter incurred, and howsoever evidenced, whether direct
or indirect, absolute or contingent, joint or several, liquidated or
unliquidated, voluntary or involuntary, due or not due, legal or equitable,
whether incurred before, during, or after any Insolvency Proceeding, and whether
recovery thereof is or becomes barred by a statute of limitations or is or
becomes otherwise unenforceable or unallowable as claims in any Insolvency
Proceeding, together with all interest thereupon (including interest under
Section 2.5(b) and all interest accruing during the pendency of an Insolvency
Proceeding). The Obligations shall include, without limiting the generality of
the foregoing, all principal and interest owing under the Loans, all Lender
Expenses, the Fees, any other fees and expenses due hereunder, and all other
indebtedness evidenced by this Agreement and/or the Notes.
"Operating Lease" means any lease of an Asset by a Person which, in
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conformity with GAAP, is not a Capital Lease.
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"Participant" has the meaning set forth in Section 9.5(d).
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"PBGC" means the Pension Benefit Guaranty Corporation or any entity
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succeeding to any or all of its functions under ERISA.
"Permitted Debt" means (i) Debt owing to Lender in accordance with the
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terms of this Agreement and the Loan Documents; (ii) Trade debt that is not more
than 30 days past due; (iii) Debt which has been approved in writing by Lender
and is listed on Schedule 1.1P, but no voluntary prepayments, renewals,
extensions, or refinancing thereof; and (iv) Debt secured by a Purchase Money
Lien and Capital Lease Obligations up to a maximum aggregate principal amount
outstanding for all such Debt of Borrower and the Subsidiaries under this clause
(iv) of Ten Thousand Dollars ($10,000).
"Permitted Investments" means any of the following investments
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denominated and payable in Dollars, maturing within one year from the date of
acquisition, selected by Borrower: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States;
(ii) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof and, at the time of acquisition, having the highest credit rating
obtainable from either Standard & Poor's Corporation ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's"); (iii) commercial paper or corporate
promissory notes bearing at the time of acquisition the highest credit rating
either of S&P or Moody's issued by United States, Canadian, European or Japanese
Lender holding companies or industrial or financial companies; (iv) certificates
of deposit issued by and Lender acceptances of and interest bearing deposits
with Lender; and (v) money market funds organized under the laws of the United
States or any state thereof, Canada or any of its provinces that invest
predominantly in any of the foregoing investments permitted under clauses (i),
(ii), (iii) and (iv).
"Permitted Liens" means (i) Liens for current taxes, assessments or
---------------
other governmental charges which are not delinquent or remain payable without
any penalty, (ii) Liens in favor of Lender in accordance with the Loan
Documents, (iii) statutory Liens, such as inchoate mechanics', inchoate
materialmen's, landlord's, warehousemen's, and carriers' liens, and other
similar liens, other than those described in clause (i) above, arising in the
ordinary course of business with respect to obligations which are not delinquent
or are being contested in good faith by appropriate proceedings, provided that,
if delinquent, adequate reserves have been set aside with respect thereto as
required by GAAP and, by reason of nonpayment, no property is subject to a
material risk of loss or forfeiture; (iv) Liens relating to Capital Lease
Obligations, (v) judgment Liens that do not constitute an Event of Default under
Section 7.1(i), (vi) Liens, if they constitute such, of any Operating Lease UCC
filings permitted hereunder, and (vii) Liens securing any Debt listed on
Schedule 1.1P.
"Person" means and includes natural persons, corporations, limited
------
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, Lender, trust companies, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
-7-
"Plan" means an "employee benefit plan" as defined in (S) 3(3) of
----
ERISA in which any personnel of any member of the ERISA Group participate or
from which any such personnel may derive a benefit or with respect to which any
member of the ERISA Group may incur liability, excluding any Multiemployer Plan,
but including any plan either established or maintained by any member of the
ERISA Group or to which such Person contributes under the laws of any foreign
country.
"Purchase Money Lien" means a Lien on any Asset acquired by Borrower
-------------------
or any of its Subsidiaries; provided that (i) such Lien attaches only to the
Asset being acquired; (ii) a description of the Asset being acquired is
furnished to Lender; and (iii) the Debt incurred in connection with such
acquisition does not exceed one hundred percent (100%) of the purchase price of
such Asset.
"Real Estate Leases" means all leases, licenses, and any and all other
------------------
agreements regarding a right of entry to and/or a possessory interest in real
property now or hereinafter entered into by either Borrower as a tenant or
licensee, or which have been, or are in the future, being purchased, assigned or
sublet to either Borrower as a tenant or licensee.
"Reportable Event" means any of the events described in Section
----------------
4043(c) of ERISA other than a Reportable Event as to which the provision of 30
days notice to the PBGC is waived under applicable regulations.
"Responsible Officer" means either the Chief Executive Officer, Chief
-------------------
Financial Officer or Controller of a Person, or such other officer, employee, or
agent of such Person designated by a Responsible Officer in a writing delivered
to Lender.
"Retiree Health Plan" means an "employee welfare benefit plan" within
-------------------
the meaning of Section 3(1) of ERISA that provides benefits to individuals after
termination of their employment, other than as required by Section 601 of ERISA.
"Revolving Credit Commitment" means One Million Dollars
---------------------------
($1,000,000.00), reduced by the amount, if any, of exercise proceeds paid to
Borrower (in any manner permitted by the warrant) as the result of the exercise
of any of the warrants issued to Lender on the Closing Date.
"Revolving Loans" has the meaning given to such term in Section 2.2.
---------------
"Revolving Loans Daily Balances" means the amount determined by taking
------------------------------
the amount of the obligations owed under the Revolving Loans at the beginning of
a given day, adding any new Revolving Loans advanced or incurred on such date,
and subtracting any payments or collections on the Revolving Loans which are
deemed to be paid on that date under the provisions of this Agreement.
"Revolving Loans Maturity Date" means one year from the Closing Date.
-----------------------------
-8-
"Revolving Note" means that certain Secured Revolving Note in the
--------------
principal amount of One Million Dollars ($1,000,000.00), dated as of even date
herewith, executed by Borrower to the order of Lender.
"Security Agreement" means that certain Security Agreement, dated as
------------------
of even date herewith, between Borrower and Lender.
"Solvent" means, with respect to any Person on the date any
-------
determination thereof is to be made, that on such date: (a) the present fair
valuation of the Assets of such Person is greater than such Person's probable
liability in respect of existing debts; (b) such Person does not intend to, and
does not believe that it will, incur debts beyond such Person's ability to pay
as such debts mature; and (c) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, which
would leave such Person with Assets remaining which would constitute
unreasonably small capital after giving effect to the nature of the particular
business or transaction. For purposes of this definition (i) the "fair
valuation" of any property or assets means the amount realizable within a
reasonable time, either through collection or sale of such Assets at their
regular market value, which is the amount obtainable by a capable and diligent
Person from an interested buyer willing to purchase such property or assets
within a reasonable time under ordinary circumstances; and (ii) the term "debts"
includes any payment obligation, whether or not reduced to judgment, equitable
or legal, matured or unmatured, liquidated or unliquidated, disputed or
undisputed, secured or unsecured, absolute, fixed or contingent.
"Subsidiary" means any corporation, limited liability company,
----------
partnership, trust or other entity (whether now existing or hereafter organized
or acquired) of which Borrower or one or more Subsidiaries of Borrower at the
time owns or controls directly or indirectly more than 50% of the shares of
stock or partnership or other ownership interest having general voting power
under ordinary circumstances to elect a majority of the board of directors,
managers or trustees or otherwise exercising control of such corporation,
limited liability company, partnership, trust or other entity (irrespective of
whether at the time stock or any other form of ownership of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
"Swaps" means payment obligations with respect to interest rate swaps,
-----
currency swaps and similar obligations obligating a 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 Borrower, 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 each party thereto or if any such agreement provides for the
simultaneous payment of amounts by and to each party, then in each such case,
the amount of such obligation shall be the net amount so determined.
"Taxes" has the meaning set forth in Section 8.1.
-----
"Transferee" has the meaning set forth in Section 9.5(e).
----------
-9-
"Unfunded Liabilities" means, with respect to any Plan at any time,
--------------------
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or an appointed trustee under Title IV of ERISA.
"Unmatured Event of Default" means any condition or event which with
--------------------------
the giving of notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Warrants" means those certain Warrants, dated as of even date
--------
herewith, executed by Borrower in favor of Lender.
1.2 Accounting Terms and Determinations. Unless otherwise specified
-----------------------------------
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP.
1.3 Computation of Time Periods. In this Agreement, with respect to
---------------------------
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding." Periods of days referred to in this Agreement
shall be counted in calendar days unless otherwise stated.
1.4 Construction. Unless the context of this Agreement clearly
------------
requires otherwise, references to the plural include the singular and to the
singular include the plural, references to any gender include any other gender,
the part includes the whole, the term "including" is not limiting, and the term
"or" has, except where otherwise indicated, the inclusive meaning represented by
the phrase "and/or." References in this Agreement to "determination" by Lender
include good faith estimates by Lender (in the case of quantitative
determinations), and good faith beliefs by Lender (in the case of qualitative
determinations). The words "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article, section, subsection,
clause, exhibit and schedule references are to this Agreement, unless otherwise
specified. Any reference in this Agreement or any of the Loan Documents to this
Agreement or any of the Loan Documents includes any and all permitted
alterations, amendments, changes, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable.
1.5 Exhibits and Schedules. All of the exhibits and schedules
----------------------
attached hereto shall be deemed incorporated herein by reference.
1.6 No Presumption Against Any Party. Neither this Agreement, any of
--------------------------------
the Loan Documents, any other document, agreement, or instrument entered into in
connection herewith, nor any uncertainty or ambiguity herein or therein shall be
construed or resolved using any presumption against any party hereto, whether
under any rule of construction or otherwise. On the contrary, this Agreement,
the Loan Documents, and the other documents, instruments,
-10-
and agreements entered into in connection herewith have been reviewed by each of
the parties and their counsel and shall be construed and interpreted according
to the ordinary meanings of the words used so as to accomplish fairly the
purposes and intentions of all parties hereto.
1.7 Independence of Provisions. All agreements and covenants
--------------------------
hereunder, under the Loan Documents, and the other documents, instruments, and
agreements entered into in connection herewith shall be given independent effect
such that if a particular action or condition is prohibited by the terms of any
such agreement or covenant, the fact that such action or condition would be
permitted within the limitations of another agreement or covenant shall not be
construed as allowing such action to be taken or condition to exist.
ARTICLE II
----------
TERMS OF THE CREDIT
-------------------
2.1 Revolving Loans. Provided that no Event of Default or Unmatured
---------------
Event of Default has occurred, and subject to the other terms and conditions
hereof, Lender agrees to make revolving loans ("Revolving Loans") to Borrower,
upon notice in accordance with Section 2.4(b), from the Closing Date up to but
not including the Maturity Date, the proceeds of which shall be used only for
the purposes allowed in Section 6.1(b), subject to the following conditions and
limitations:
(a) the aggregate principal amount of Revolving Loans outstanding
after giving effect to any proposed Borrowing on such date shall not exceed the
amount of the Revolving Credit Commitment then in effect;
(b) All repayments of Revolving Loans shall be without penalty
or premium. On the Maturity Date, Borrower shall pay to Lender the entire unpaid
principal balance of the Revolving Loans together with all accrued but unpaid
interest thereon.
2.2 Notice of Borrowing Requirements.
--------------------------------
(a) Each Borrowing shall be made on a Business Day.
(b) Each Borrowing shall be made upon telephonic notice given by
a Responsible Officer of Borrower, followed by a Notice of Borrowing, given by
facsimile or personal service, delivered to Lender at the address set forth in
the Notice of Borrowing. Lender shall be given such notice no later than 11:00
a.m., New York, New York time, on the day on which such Borrowing is to be made,
and such notice shall state the amount thereof (subject to the limitations set
forth in Section 2.2). Any Notice of Borrowing (or telephonic notice in respect
thereof) shall be irrevocable and Borrower shall be bound to borrow in
accordance therewith.
(c) Lender shall not incur any liability to Borrower in acting
upon any telephonic notice which Lender believes in good faith to have been
given by a Responsible Officer of Borrower, or for otherwise acting in good
faith under this Section 2.3, and in making any Revolving Loans pursuant to
telephonic notice.
-11-
(d) So long as all of the conditions for a Borrowing set forth
herein have been satisfied, Lender shall make the proceeds of such Borrowing
available to Borrower on the applicable Borrowing date by transferring same day
funds, equal to the amount of such Borrowing, in accordance with written
disbursement instructions given by Borrower to Lender, in form and substance
satisfactory to Lender and otherwise consistent with Section 6.1.
2.3 Interest Rates; Payments of Interest.
------------------------------------
(a) Interest Rate. The unpaid principal balance of all Loans
-------------
shall bear interest at the Lending Rate.
(b) Default Rate. If any payment of principal or interest on
------------
the Loans shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), in addition to and not in substitution of any of
Lender's other rights and remedies with respect to such nonpayment, the entire
unpaid principal balance of the Loans shall bear interest at the Lending Rate
plus five hundred (500) basis points until such overdue payment is paid in full.
In addition, interest, Lender Expenses, the Fees, and other amounts due
hereunder not paid when due shall bear interest at the Lending Rate plus five
hundred (500) basis points until such overdue payment is paid in full.
(c) Computation of Interest. All computations of interest shall
-----------------------
be calculated on the basis of a year of three hundred sixty (360) days for the
actual days elapsed. Interest shall accrue from the Closing Date to the date of
repayment of the Loans in accordance with the provisions of this Agreement.
(d) Maximum Interest Rate. In no event shall the interest rate
---------------------
and other charges hereunder exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Lender has
received interest and other charges hereunder in excess of the highest rate
applicable hereto, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations, other than interest, in the
inverse order of maturity, and the provisions hereof shall be deemed amended to
provide for the highest permissible rate. If there are no Obligations
outstanding, Lender shall refund to Borrower such excess.
(e) Payments of Interest. All accrued but unpaid interest on
--------------------
the Loans, calculated in accordance with this Section 2.5, shall be due and
payable, in arrears, on the first Business Day of each and every month.
2.4 Notes; Statements of Obligations. The Revolving Loans and
--------------------------------
Borrower's obligation to repay the same shall be evidenced by the Revolving
Note, this Agreement and the books and records of Lender. Lender shall render
monthly statements of the Loans to Borrower, including statements of all
principal and interest owing on the Loans, and all Fees and Lender Expenses
owing, and such statements shall be presumed to be correct and accurate and
constitute an account stated between Borrower and Lender unless, within thirty
(30) days after receipt thereof by Borrower, Borrower delivers to Lender, at the
address specified in Section 9.1, written objection thereof specifying the error
or errors, if any, contained in any such statement.
-12-
2.5 Holidays. Any principal or interest in respect of the Loans
--------
which would otherwise become due on a day other than a Business Day, shall
instead become due on the next succeeding Business Day and such adjustment shall
be reflected in the computation of interest; provided, however, that in the
event that such due date shall, subsequent to the specification thereof by
Lender, for any reason no longer constitute a Business Day, Lender may change
such specified due date in accordance with this Section 2.7.
2.6 Time and Place of Payments.
--------------------------
(a) All payments due hereunder shall be made available to Lender
in immediately available Dollars, not later than 12:00 p.m., Los Angeles time,
on the day of payment, to the following address or such other address as Lender
may from time to time specify by notice to Borrower:
ICE Holdings North America, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - 13th Floor
New York, New York 10022
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
(b) Borrower hereby authorizes Lender to charge any account
which Borrower maintains with Lender or with such bank as Lender designate for
purposes of collection of accounts receivable ("Lock-box Bank") for the amount
of any payment due or past due hereunder.
2.7 Debt Financing Fee.
------------------
(a) On the Closing Date, Borrower shall pay to Lender a fully
earned, non-refundable Debt Financing Fee (the "Debt Financing Fee") in the
amount of Seventy Five Thousand Dollars ($75,000.00) in consideration of
Lender's agreement to enter into this Agreement upon the terms and conditions
set forth herein.
(b) Late Payment Fee. If any payment due hereunder, whether for
----------------
principal, interest, or otherwise, is not paid on or before the tenth day after
the date such payment is due, in addition to and not in substitution of any of
Lender's other rights and remedies with respect to such nonpayment, Borrower
shall pay to Lender, a late payment fee ("Late Payment Fee") equal to five
percent (5%) of the amount of such overdue payment. The Late Payment Fee shall
be due and payable on the eleventh day after the due date of the overdue payment
with respect thereto.
ARTICLE III
-----------
CONDITIONS PRECEDENT
--------------------
3.1 Conditions to Initial Loan or Letter of Credit. Lender's
----------------------------------------------
obligation to make the initial Loan is subject to and contingent upon the
fulfillment of each of the following conditions to the satisfaction of Lender
and its counsel:
-13-
(a) receipt by Lender of this Agreement and each of the Loan
Documents, all duly executed by Borrower and/or the other Persons party thereto,
acknowledged where required, and in form and substance satisfactory to Lender in
its sole and absolute discretion;
(b) receipt by Lender of a duly executed opinion of Borrower's
counsel, dated as of the Closing Date, covering the matters set forth in Exhibit
3.1(b) and otherwise in form and substance satisfactory to Lender in its sole
and absolute discretion;
(c) receipt by Lender of a Certificate of the Secretary of
Borrower, dated as of the Closing Date, certifying (i) the incumbency and
signatures of the Responsible Officers of Borrower who are executing this
Agreement and the Loan Documents on behalf of Borrower; (ii) the bylaws of
Borrower and all amendments thereto as being true and correct and in full force
and effect; and (iii) the resolutions of the Board of Directors of Borrower as
being true and correct and in full force and effect, authorizing the execution
and delivery of this Agreement and the Loan Documents, and authorizing the
transactions contemplated hereunder and thereunder, and authorizing the
Responsible Officers of Borrower to execute the same on behalf of Borrower;
(d) receipt by Lender of a certificate of status and good
standing for Borrower, dated as of a recent date prior to the Closing Date,
showing that Borrower is in good standing under the laws of the State of Nevada;
(e) receipt by Lender of Borrower's Articles of Incorporation
and all amendments thereto, certified by the Nevada Secretary of State and dated
as of a recent date prior to the Closing Date;
(f) receipt by Lender of certificates of foreign qualification
and good standing with respect to Borrower, dated as of a recent date prior to
the Closing Date, showing that Borrower is qualified to do business and in good
standing under the laws of the province of British Columbia, Canada;
(g) receipt by Lender of a certificate signed by the President
and Chief Financial Officer of Borrower, dated as of the Closing Date,
certifying to Lender that (i) both immediately before and immediately after
giving effect to the transactions contemplated by this Agreement and the Loan
Documents, Borrower is and will be Solvent; (ii) the representations and
warranties of Borrower contained in this Agreement and the Loan Documents are
true and correct and (iii) both immediately before and immediately after giving
effect to the transactions contemplated by this Agreement and the Loan
Documents, no Event of Default or Unmatured Event of Default is continuing or
shall occur;
(h) receipt by Lender of Uniform Commercial Code, British
Columbia Personal Property Security Act and other public record searches with
respect to Borrower, in each case satisfactory to Lender in its sole and
absolute discretion;
(i) receipt by Lender of (i) the Debt Financing Fee and (ii) all
Lender Expenses owing on the Closing Date;
-14-
(j) receipt by Lender of (i) Borrower's internally prepared
Financial Statements for Borrower the period ended November 30, 1999, and (ii)
Borrower's operating budgets and projections for the fiscal year ending June 30,
2000, all of which are satisfactory to Lender in its sole and absolute
discretion;
(k) no Material Adverse Effect shall have occurred;
(l) receipt by Lender of copies of insurance binders or
insurance certificates evidencing Borrower's having caused to be obtained
insurance in accordance with Section 5.5, including the Lender's loss payee
endorsements required by such Section;
(m) receipt by Lender of such other documents, instruments, and
agreements as Lender may reasonably request in connection with the transactions
contemplated hereunder or to perfect or protect the liens and security interests
granted to Lender in connection herewith; and
(n) the Closing Date shall have occurred on or before March 31,
2000.
3.2 Conditions to all Loans. Lender's obligation hereunder to make
-----------------------
any Loans to Borrower, is further subject to and contingent upon the fulfillment
of each of the following conditions to the satisfaction of Lender:
(a) in the case of a Borrowing, receipt by Lender of a Notice of
Borrowing as required by Section 2.4(b) and written disbursement instructions to
Lender consistent with Section 6.1;
(b) in the case of a Borrowing, the fact that, immediately
before and after such Borrowing, as the case may be, no Event of Default or
Unmatured Event of Default shall have occurred; and
(c) in the case of a Borrowing, the fact that the
representations and warranties of Borrower contained in this Agreement shall be
true on and as of the date of such Borrowing, or issuance of Letter of Credit,
as the case may be.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make
Loans, Borrower represents and warrants to Lender that on the Closing Date and
on the date of each Borrowing:
4.1 Legal Status. Borrower is a corporation duly organized and
------------
existing under the laws of the State of Nevada. Borrower and each Subsidiary has
the power and authority to own its own Assets and to transact the business in
which it is engaged, and is properly licensed, qualified to do business and in
good standing in every jurisdiction in which it is doing business where failure
to so qualify could have a Material Adverse Effect.
-15-
4.2 No Violation; Compliance. The execution, delivery and
------------------------
performance of this Agreement and the Loan Documents to which Borrower is a
party are within Borrower's powers, are not in conflict with the terms of the
Governing Documents of Borrower, and do not result in a breach of or constitute
a default under any contract, obligation, indenture or other instrument to which
Borrower is a party or by which Borrower is bound or affected. There is no law,
rule or regulation (including Regulations T, U and X of the Federal Reserve
Board), nor is there any judgment, decree or order of any court or Governmental
Authority binding on Borrower which would be contravened by the execution,
delivery, performance or enforcement of this Agreement and the Loan Documents to
which Borrower is a party.
4.3 Authorization; Enforceability. Borrower has taken all corporate,
-----------------------------
partnership or limited liability company, as applicable, action necessary to
authorize the execution and delivery of this Agreement and the Loan Documents to
which Borrower is a party, and the consummation of the transactions contemplated
hereby and thereby. Upon their execution and delivery in accordance with the
terms hereof, this Agreement and the Loan Documents to which Borrower is a party
will constitute legal, valid and binding agreements and obligations of Borrower
enforceable against Borrower in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency, and similar laws and
equitable principles affecting the enforcement of creditors' rights generally.
4.4 Approvals; Consents. No approval, consent, exemption or other
-------------------
action by, or notice to or filing with, any Governmental Authority is necessary
in connection with the execution, delivery, performance or enforcement of this
Agreement or the Loan Documents.
4.5 Liens. Borrower and each of its Subsidiaries has good and
-----
marketable title to, or valid leasehold interests in, all of its Assets, free
and clear of all Liens or rights of others, except for Permitted Liens.
4.6 Debt. Borrower and each of its Subsidiaries has no Debt other
----
than Permitted Debt.
4.7 Litigation. Except as set forth in Schedule 4.7, there are no
----------
suits, proceedings, claims or disputes pending or affecting Borrower or any of
Borrower's Assets, or any Subsidiary of Borrower or any of such Subsidiary's
Assets, which are not fully covered by applicable insurance and as to which no
reservation of rights has been taken by the insurer thereunder and, with respect
to draw downs after the Closing Date, there are no such suits, proceedings,
claims or disputes that could have a Material Adverse Effect.
4.8 No Default. No Event of Default or Unmatured Event of Default is
----------
continuing or would result from the incurring of obligations by Borrower or any
Subsidiary under this Agreement or the Loan Documents.
4.9 Subsidiaries. Set forth in Schedule 4.9 is a complete and
------------
accurate list of the Subsidiaries, showing the jurisdiction of incorporation of
each and showing the percentage of Borrower's ownership of the outstanding stock
of each Subsidiary. All of the outstanding capital stock of each Subsidiary has
been validly issued, is fully paid and nonassessable, and is owned by Borrower
free and clear of all Liens except Permitted Liens.
-16-
4.10 Taxes. All tax returns required to be filed by Borrower and
-----
each of its Subsidiaries in any jurisdiction have in fact been filed, and all
taxes, assessments, fees and other governmental charges upon Borrower and each
of its Subsidiaries or upon any of their Assets, income or franchises, which are
due and payable have been paid. The provisions for taxes on the books of
Borrower and each of its Subsidiaries are adequate for all open years, and for
Borrower's and each of its Subsidiaries current fiscal period.
4.11 Correctness of Financial Statements. Borrower's consolidated
-----------------------------------
and consolidating audited Financial Statement as of the fiscal year ended June
30, 1999, and all information and data furnished by Borrower to Lender in
connection therewith, are complete and correct and accurately and fairly present
the financial condition and results of operations of Borrower and the
Subsidiaries as of their respective dates. Any forecasts of future financial
performance delivered by Borrower to Lender have been made in good faith and are
based on reasonable assumptions and investigations by Borrower. Said audited
Financial Statement has been prepared in accordance with GAAP. Since the date of
such audited Financial Statement, there has been no change in Borrower's or the
Subsidiaries' financial condition or results of operations sufficient to have a
Material Adverse Effect. Borrower and the Subsidiaries have no contingent
obligations, liabilities for taxes or other outstanding financial obligations
which are material in the aggregate, except as disclosed in such statements,
information and data.
4.12 ERISA. Neither Borrower nor any member of the ERISA Group
-----
maintains or contributes to any Plan or Multiemployer Plan, other than those
listed on Schedule 4.12. Borrower and each member of the ERISA Group have
satisfied the minimum funding standards of ERISA and the Internal Revenue Code
with respect to each Plan and Multiemployer Plan to which it is obligated to
contribute. No ERISA Event has occurred not has any other event occurred that
may result in an ERISA Event that reasonably could be expected to result in a
Material Adverse Effect. None of Borrower, any member of the ERISA Group, or any
fiduciary of any Plan is subject to any direct or indirect liability with
respect to any Plan (other than to make regularly scheduled required
contributions and to pay Plan benefits in the normal course) under any
applicable law, treaty, rule, regulation, or agreement. Neither Borrower nor any
member of the ERISA Group is required to provide security to any Plan under
Section 401(a)(29) of the Internal Revenue Code. Each Plan will be able to
fulfill its benefit obligations as they come due in accordance with the Plan
documents and under GAAP.
4.13 Other Obligations. Borrower and each of its Subsidiaries is not
-----------------
in default on any Debt, and Borrower and each of its Subsidiaries is not in
default on any other lease, commitment, contract, instrument or obligation which
is material to the operation of its business.
4.14 Public Utility Holding Company Act. Borrower is not a "holding
----------------------------------
company," or an "affiliate" of a "holding company" or a "subsidiary company" of
a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.15 Investment Company Act. Borrower is not an "investment
----------------------
company," or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
-17-
4.16 Patents, Trademarks, Copyrights, and Intellectual Property, etc.
---------------------------------------------------------------
Borrower and each Subsidiary has all necessary, patents, patent rights,
licenses, trademarks, trademark rights, trade names, trade name rights,
copyrights, permits, and franchises in order for it to conduct its business and
to operate its Assets, without known conflict with the rights of third Persons,
and all of same are valid and subsisting. The consummation of the transactions
contemplated by this Agreement will not alter or impair any of such rights of
Borrower or any Subsidiary. Borrower and each Subsidiary has not been charged
or, to the best of Borrower's knowledge after due inquiry, threatened to be
charged with any infringement or, after due inquiry, infringed on any, unexpired
trademark, trademark registration, trade name, patent, copyright, copyright
registration, or other proprietary right of any Person.
4.17 Environmental Condition. (i) None of Borrower's or any
-----------------------
Subsidiary's Assets has ever been used by such Borrower or Subsidiary or by
previous owners or operators in the disposal of, or to produce, store, handle,
treat, release, or transport, any Hazardous Materials; (ii) none of Borrower's
or any Subsidiary's Assets has ever been designated or identified in any manner
pursuant to any environmental protection statute as a Hazardous Materials
disposal site, or a candidate for closure pursuant to any environmental
protection statute; (iii) no Lien arising under any environmental protection
statute has attached to any revenues or to any real or personal property owned
or operated by Borrower or any Subsidiary; and (iv) neither Borrower nor any
Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal or state governmental
agency concerning any action or omission by Borrower or any Subsidiary resulting
in the releasing or disposing of Hazardous Materials into the environment.
4.18 Solvency. Borrower and each Subsidiary is Solvent. No transfer
--------
of property is being made by Borrower or any Subsidiary and no obligation is
being incurred by Borrower or any Subsidiary in connection with the transactions
contemplated by this Agreement or the Loan Documents with the intent to hinder,
delay, or defraud either present or future creditors of Borrower or any
Subsidiary.
4.19 Real Estate Leases. All of the Real Estate Leases are listed on
------------------
Schedule 4.18. All of the Real Estate Leases are currently in full force and
effect, and true and correct copies of all Real Estate Leases, together with all
amendments, exhibits and schedules thereto, have been delivered to Lender.
Neither the landlord nor the tenant therein, as the case may be, is in default
on any of its obligations thereunder, and no event has occurred which, with the
passage of time or the giving of notice, or both, would constitute such a
default.
4.20 Compliance With ADA.
-------------------
(a) Borrower's and the Subsidiaries' premises are presently
used as an administrative, office, manufacturing or distribution facility and
for other commercial purposes, and no portions of Borrower's, Guarantor's or any
Subsidiaries' premises are used as or for a "public accommodation," as described
and defined in the ADA.
(b) Borrower and each Subsidiary has made all modifications
and/or provided all accommodations which may be required to be made or provided
by Borrower and
-18-
such Subsidiary to their premises pursuant to the ADA in order to accommodate
the needs and requirements of any disabled employees of Borrower and such
Subsidiary.
(c) Borrower and the Subsidiaries have received no notice or
complaint regarding any noncompliance with the ADA of their premises or of
Borrower's, Guarantor's or any Subsidiary's employment practices and, to the
best of Borrower's and Guarantor's knowledge, there has been no threatened
litigation alleging any such noncompliance by Borrower, Guarantor or the
Subsidiaries or their premises.
ARTICLE V
---------
AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees that from the Closing Date and
thereafter until the indefeasible payment, performance and satisfaction in full
of the Obligations and all of Lender's obligations hereunder have been
terminated, Borrower shall:
5.1 Punctual Payments. Punctually pay the interest and principal on
-----------------
the Loans, the Fees and all Lender Expenses and any other fees and liabilities
due under this Agreement and the Loan Documents at the times and place and in
the manner specified in this Agreement or the Loan Documents.
5.2 Books and Records. Maintain, and cause each of its Subsidiaries
-----------------
to maintain, adequate books and records in accordance with GAAP, and permit any
officer, employee or agent of Lender, at any time and from time to time, to
inspect, audit and examine such books and records, and to make copies of the
same.
5.3 Financial Statements. Deliver to Lender the following, all in
--------------------
form and detail satisfactory to Lender and in such number of copies as Lender
may request:
(a) as soon as available but not later than thirty (30) days
after and as of the close of each monthly accounting period, a consolidated
internally prepared Financial Statement for Borrower and the Subsidiaries which
shall include Borrower's and its Subsidiaries' consolidated balance sheet as of
the close of such period, and Borrower's and its Subsidiaries' consolidated
statement of income and retained earnings and statement of cash flow for such
period and year to date, certified by the Chief Financial Officer of Borrower to
the best of his or her knowledge after due and diligent inquiry, as being
complete and correct and fairly presenting in all material respects Borrower's
and its Subsidiaries' financial condition and results of operations for such
period;
(b) as soon as available but not later than fifty (50) days
after and as of the close of the first three quarterly accounting periods, a
consolidated and consolidating internally prepared Financial Statement for
Borrower and its Subsidiaries which shall include Borrower's and its
Subsidiaries' consolidated and consolidating balance sheet as of the close of
such period, and Borrower's and its Subsidiaries' consolidated statement of
income and retained earnings and statement of cash flow for such period and year
to date, certified by the Chief Financial Officer of Borrower to the best of his
or her knowledge after due and diligent inquiry,
-19-
as being complete and correct and fairly presenting Borrower's and its
Subsidiaries' financial condition and results of operations;
(c) as soon as available but not later than fifty (50) days
after and as of the end of each quarterly accounting period, a Compliance
Certificate from the Chief Financial Officer of Borrower stating, among other
things, that he or she has reviewed the provisions of this Agreement and the
Loan Documents and that, to the best of his or her knowledge after due and
diligent inquiry there exists no Event of Default or Unmatured Event of Default,
and containing the calculations and other details necessary to demonstrate
compliance with Sections 6.12 and 6.15;
(d) as soon as available but not later than ninety (90) days or
one hundred and five (105) days if an extension is granted by the Security and
Exchange Commission after and as of the end of each fiscal year, a complete copy
of Borrower's and the Subsidiaries' consolidated and consolidating audited
Financial Statement, which shall include at least Borrower's and the
Subsidiaries' balance sheet as of the close of such fiscal year, and Borrower's
and the Subsidiaries' statement of income and retained earnings and statement of
cash flow for such fiscal year, certified by a certified public accountant
selected by Borrower and satisfactory to Lender, which certificate shall not be
qualified in any manner whatsoever, and shall include or be accompanied by a
statement from such accountant that during the examination, solely with respect
to accounting and auditing matters herein, there was observed no Event of
Default or Unmatured Event of Default, or a statement of such Event of Default
or Unmatured Event of Default if any is found and the actions taken or to be
taken with respect thereto;
(e) promptly upon receipt by Borrower copies of any and all
reports and management letters submitted to Borrower or any Subsidiary by any
certified public accountant in connection with any examination of Borrower's or
any Subsidiary's financial records made by such accountant; and
(f) from time to time annual budgets, operating statistics,
operating plans and any other information as Lender may reasonably request,
promptly upon such request.
5.4 Existence; Preservation of Licenses; Compliance with Law.
--------------------------------------------------------
Preserve and maintain, and cause each Subsidiary to preserve and maintain, its
corporate existence and good standing in the state of its organization, qualify
and remain qualified, and cause each Subsidiary to qualify and remain qualified,
as a foreign corporation in every jurisdiction where the failure to be so
qualified could have a Material Adverse Effect; and preserve, and cause each of
the Subsidiaries to preserve, all of its licenses, permits, governmental
approvals, rights, privileges and franchises required for its operations; and
comply, and cause each of the Subsidiaries to comply, with the provisions of its
Governing Documents; and comply, and cause each of the Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations, orders of any
Governmental Authority having authority or jurisdiction over it, except for such
laws, rules and regulations where the failure to so comply could not have a
Material Adverse Effect, and comply, and cause each of the Subsidiaries to
comply, with all requirements for the maintenance of its business, insurance,
licenses, permits, governmental approvals, rights, privileges and franchises.
-20-
5.5 Insurance. (a) Maintain and keep in force, and cause each
---------
Subsidiary to maintain and keep in force, insurance of the types and in amounts
customarily carried by companies engaged in the same or similar business, or
similarly situated, including fire, extended coverage, public liability,
business interruption, earthquake, property damage and workers' compensation
insurance, and deliver to Lender from time to time at Lender's request schedules
setting forth all insurance then in effect. All insurance required herein shall
be written by companies which are authorized to do insurance business in the
Province of British Columbia or such Canadian province or state in the United
States where Borrower is conducting its business. All hazard insurance and such
other insurance as Lender shall specify, shall contain a New York Form 438BFU
(NS) endorsement, or an equivalent endorsement satisfactory to Lender, showing
Lender as sole loss payee thereof, and shall contain a waiver of warranties.
Every policy of insurance referred to in this Section 5.5 shall contain an
agreement by the insurer that it will not cancel such policy except after 30
days prior written notice to Lender and that any loss payable thereunder shall
be payable notwithstanding any act or negligence of Borrower or Lender which
might, absent such agreement, result in a forfeiture of all or a part of such
insurance payment.
(b) Original policies or certificates thereof satisfactory to
Lender evidencing such insurance shall be delivered to Lender at least 30 days
prior to the expiration of the existing or preceding policies. Borrower shall
give Lender prompt notice of any loss covered by such insurance, and Lender
shall have the right to adjust any loss. Lender shall have the exclusive right
to adjust all losses payable under any such insurance policies without any
liability to Borrower whatsoever in respect of such adjustments. Any monies
received as payment for any loss under any insurance policy including the
insurance policies mentioned above, shall be paid over to Lender to be applied
at the option of Lender either to the prepayment of the Obligations without
premium, in such order or manner as Lender may elect, or shall be disbursed to
Borrower under stage payment terms satisfactory to Lender for application to the
cost of repairs, replacements, or restorations. All repairs, replacements, or
restorations shall be effected with reasonable promptness and shall be of a
value at least equal to the value of the items or property destroyed prior to
such damage or destruction. Upon the occurrence of an Event of Default, Lender
shall have the right to apply all prepaid premiums to the payment of the
Obligations in such order or form as Lender shall determine. Borrower shall,
concurrently with the financial information required to be delivered by Borrower
pursuant to Section 5.3(g), deliver to Lender, as Lender may request, copies of
certificates describing all insurance of Borrower then in effect.
5.6 Assets. Maintain, keep and preserve, and cause each Subsidiary
------
to maintain, keep and preserve, all of its Assets (tangible or intangible) which
are necessary to its business in good repair and condition, and from time to
time make necessary repairs, renewals and replacements thereto so that such
Assets shall be fully and efficiently preserved and maintained.
5.7 Taxes and Other Liabilities. Pay and discharge when due, and
---------------------------
cause each Subsidiary to pay and discharge when due, any and all assessments and
taxes, both real or personal and including federal and state income taxes, and
any and all other Permitted Debt.
-21-
5.8 Notice to Lender. Promptly, upon Borrower acquiring knowledge
----------------
thereof, give written notice to Lender of:
(a) all litigation affecting Borrower where the amount in
controversy is in excess of Twenty Thousand Dollars ($20,000.00);
(b) any dispute which may exist between Borrower, Guarantor or
any Subsidiary, on the one hand, and any Governmental Authority, on the other;
(c) any labor controversy resulting in or threatening to result
in a strike against Borrower or any Subsidiary;
(d) any proposal by any public authority to acquire the Assets
or business of Borrower or any Subsidiary, or to compete with Borrower or any
Subsidiary;
(e) all notices or claims which may be received by Borrower or
any Subsidiary and involving claims made by any Person as to any alleged
noncompliance of Borrower's or such Subsidiary's premises with the requirements
of the ADA;
(f) any Event of Default or Unmatured Event of Default; and
(g) any other matter which has resulted or could result in a
Material Adverse Effect.
5.9 Employee Benefits. (a)(i) Promptly, and in any event within 10
-----------------
Business Days after Borrower or any of the Subsidiaries knows or has reason to
know that an ERISA Event has occurred that reasonably could be expected to
result in a Material Adverse Effect, deliver or cause to be delivered a written
statement of the Chief Financial Officer of Borrower describing such ERISA Event
and any action that is being taken with respect thereto by Borrower, any such
Subsidiary, or member of the ERISA Group, and any action taken or threatened by
the Internal Revenue Service, Department of Labor, or PBGC. Borrower or such
Subsidiary, as applicable, shall be deemed to know all facts known by the
administrator of any Plan of which it is the plan sponsor; (ii) promptly and in
any event within 3 Business Days after the filing thereof with the Internal
Revenue Service, deliver or cause to be delivered a copy of each funding waiver
request filed with respect to any Plan and all communications received by
Borrower any of the Subsidiaries, or, to the knowledge of Borrower any member of
the ERISA Group with respect to such request; and (iii) promptly and in any
event within 3 Business Days after receipt by Borrower any of the Subsidiaries
or, to the knowledge of Borrower, any member of the ERISA Group, of the PBGC's
intention to terminate a Plan or to have a trustee appointed to administer a
Plan, copies of each such notice.
(b) Cause to be delivered to Lender, upon Lender's request, each
of the following: (i) a copy of each Plan (or, where any such plan is not in
writing, complete description thereof) (and if applicable, related trust
agreements of other funding instruments) and all amendments thereto, all written
interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of Borrower or its Subsidiaries;
(ii) the most recent determination letter issued by the IRS with respect to each
Plan; (iii) for the three
-22-
most recent Plan years, annual reports on Form 5500 Series required to be filed
with any governmental agency for each Plan; (iv) all actuarial reports prepared
for the last three Plan years for each Plan; (v) a listing of all Multiemployer
Plans, with the aggregate amount of the most recent annual contributions
required to be made by Borrower or any member of the ERISA Group to each such
plan and copies of the collective bargaining agreements requiring such
contributions; (vi) any information that has been provided to Borrower or any
member of the ERISA Group regarding withdrawal liability under any Multiemployer
Plan; and (vii) the aggregate amount of the most recent annual payments made to
former employees of Borrower or its Subsidiaries under any Retiree Health Plan.
5.10 Further Assurances. Execute and deliver, or cause to be
------------------
executed and delivered, upon the request of Lender and at Borrower's expense,
such additional documents, instruments and agreements as Lender may reasonably
determine to be necessary or advisable to carry out the provisions of this
Agreement and the Loan Documents, and the transactions and actions contemplated
hereunder and thereunder.
5.11 Bank Accounts. Except for payroll accounts, ▇▇▇▇▇ cash accounts
-------------
or other accounts specifically approved by Lender, maintain its cash on hand and
cash equivalent investments in deposit accounts at Republic National Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Domestic Private Banking Division, New York, New York, or
other bank agreed to by Lender which deposit accounts shall be subject to the
security interests granted to Lender under the Security Agreement.
5.12 Environment. Be and remain, and cause each Subsidiary and each
-----------
operator of any of Borrower's or any Subsidiary's Assets to be and remain, in
compliance with the provisions of all federal, state and local environmental,
health and safety laws, codes and ordinances, and all rules and regulations
issued thereunder; notify Lender immediately of any notice of a hazardous
discharge or environmental complaint received from any Governmental Authority or
any other Person; notify Lender immediately of any hazardous discharge from or
affecting its premises; immediately contain and remove the same, in compliance
with all applicable laws; promptly pay any fine or penalty assessed in
connection therewith; permit Lender to inspect the premises, to conduct tests
thereon, and to inspect all books, correspondence, and records pertaining
thereto; and at Lender's request, and at Borrower's expense, provide a report of
a qualified environmental engineer, satisfactory in scope, form and content to
Lender, and such other and further assurances reasonably satisfactory to Lender
that the condition has been corrected.
5.13 Real Estate Leases. Perform all of its obligations under all of
------------------
the Real Estate Leases and promptly deliver to Lender a copy of all notices of
default or breach under any Real Estate Lease.
5.14 ADA. Observe and comply, and cause each Subsidiary to observe
---
and comply, in all material respects with all obligations and requirements of
the ADA as it applies to their premises, which shall include, without
limitation, installing or constructing all improvements or alterations which may
be necessary to cause such premises to be accessible to all persons if the use
of such premises or any part thereof becomes a "public accommodation," as
defined in the ADA, or in the event additional building improvements are added
or incorporated
-23-
into the existing improvements, and making any reasonable accommodations which
may be necessary to accommodate the needs or requirements of any existing or
future employee of Borrower and the Subsidiaries, as applicable.
ARTICLE VI
----------
NEGATIVE COVENANTS
------------------
Borrower further covenants and agrees that from the Closing Date and
thereafter until the indefeasible payment, performance and satisfaction in full
of the Obligations and all of Lender's obligations hereunder have been
terminated, Borrower shall not:
6.1 Use of Funds; Margin Regulation.
-------------------------------
(a) Use any proceeds of the Revolving Loans for any purpose
other than (i) for working capital; (ii) for Capital Expenditures to the extent
permitted by Section 6.12; and (iii) other lawful corporate purposes; or
(b) Use any portion of the proceeds of the Loans in any manner
which might cause the Loans, the application of the proceeds thereof, or the
transactions contemplated by this Agreement to violate Regulation T, U, or X of
the Board of Governors of the Federal Reserve System, or any other regulation of
such board, or to violate the Securities and Exchange Act of 1934, as amended or
supplemented.
6.2 Debt. Create, incur, assume or suffer to exist, or permit any
----
Subsidiary to create, incur, assume or suffer to exist, any Debt except for (i)
Permitted Debt, and (ii) unsecured financing from a financial institution in an
amount not to exceed $100,000.
6.3 Liens. Create, incur, assume or suffer to exist, or permit any
-----
Subsidiary to create, incur, assume or suffer to exist, any Lien (including the
lien of an attachment, judgment or execution) on any of its Assets, whether now
owned or hereafter acquired, except Permitted Liens; or sign or file, or permit
any Subsidiary to sign or file, under the Uniform Commercial Code as adopted in
any jurisdiction, a financing statement which names Borrower or any Subsidiary
as a debtor, except with respect to Permitted Liens, or sign, or permit any
Subsidiary to sign, any security agreement authorizing any secured party
thereunder to file such a financing statement, except with respect to Permitted
Liens.
6.4 Merger, Consolidation, Transfer of Assets. Wind up, liquidate or
-----------------------------------------
dissolve, reorganize, merge or consolidate with or into any other Person, or
acquire all or substantially all of the Assets or the business of any other
Person, or permit any Subsidiary to do so.
6.5 Leases. Create, incur, assume or suffer to exist, or permit any
------
Subsidiary to create, incur, assume or suffer to exist, any obligation as a
lessee for the rental or hire of any real or personal property.
-24-
6.6 Sales and Leasebacks. Sell, transfer, or otherwise dispose of,
--------------------
or permit any Subsidiary to sell, transfer, or otherwise dispose of, any real or
personal property to any Person, and thereafter directly or indirectly leaseback
the same or similar property.
6.7 Asset Sales. Conduct any Asset Sale, or permit any Subsidiary to
-----------
do so
6.8 Investments. Make, or permit any Subsidiary to make, any loans
-----------
other than loans to employees of less than five hundred dollars ($500) or
advances to, or any investment in, any Person; or acquire, or permit any
Subsidiary to acquire, any capital stock, Assets, obligations, or other
securities of, make any contribution to, or otherwise acquire any interest in,
any Person; or acquire or form or permit any Subsidiary to acquire or form, any
new Subsidiary unless Borrower or such Subsidiary concurrently therewith
complies with Section 5.9, and Borrower, or such Subsidiary, as the case may be,
pledges 100% of the ownership interests in such new Subsidiary to Lender
pursuant to such security or pledge agreements and other instruments and
documents as Lender shall require, all in form and substance satisfactory to
Lender in its sole and absolute discretion; or participate, or permit any
Subsidiary to participate, as a partner or joint venturer with any other Person.
6.9 Character of Business. Engage in any business activities or
---------------------
operations substantially different from or unrelated to its present business
activities and operations, or permit any Subsidiary to do so.
6.10 Distributions. Declare or pay any Distributions; or purchase,
-------------
redeem, retire, or otherwise acquire for value any of its capital stock now or
hereafter outstanding; or make any distribution of Assets to its shareholders,
whether in cash, Assets, or in obligations of Borrower; or allocate or otherwise
set apart any sum for the payment of any Distribution on, or for the purchase,
redemption or retirement of, any of its capital stock; or make any other
distribution by reduction of capital or otherwise in respect of any of its
capital stock; or permit any Subsidiary to purchase or otherwise acquire for
value any capital stock of Borrower or any other Subsidiary.
6.11 Guaranty. Assume, guaranty, endorse (other than checks and drafts
--------
received by Borrower in the ordinary course of business so long as an Event of
Default has not occurred), or otherwise be or become directly or contingently
responsible or liable, or permit any Subsidiary to assume, guaranty, endorse, or
otherwise be or become directly or contingently responsible or liable
(including, any agreement to purchase any obligation, stock, Assets, goods, or
services or to supply or advance any funds, Assets, goods, or services, or any
agreement to maintain or cause such Person to maintain, a minimum working
capital or net worth, or otherwise to assure the creditors of any Person against
loss) for the obligations of any other Person; or pledge or hypothecate, or
permit any Subsidiary to pledge or hypothecate, any of its Assets as security
for any liabilities or obligations of any other Person.
6.12 Transactions with Affiliates. Enter into any transaction, except
----------------------------
for employment contracts in the ordinary course of business, including the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate, or permit any Subsidiary to enter into any transaction, including
the purchase, sale, or exchange of property or the rendering of any service,
with any Affiliate.
-25-
6.13 Stock Issuance. Issue any additional ownership interests, or
--------------
permit any Subsidiary to do so, except for such interests having an aggregate
purchase price not to exceed $2,000,000 and provided that if such aggregate
purchase price exceeds $2,000,000, 30% of such excess purchase price (the
"Excess Proceeds") shall be applied to repay any outstanding Obligations, and
the Revolving Credit Commitment shall be reduced by the amount of the Excess
Proceeds.
(a)
6.14 Transactions Under ERISA. Directly or indirectly:
------------------------
(a) engage, or permit any Subsidiary of Borrower to engage, in
any prohibited transaction which is reasonably likely to result in a civil
penalty or excise tax described in Sections 406 of ERISA or 4975 of the Internal
Revenue Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the Department of Labor;
(b) permit to exist with respect to any Plan any accumulated
funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal
Revenue Code), whether or not waived;
(c) fail, or permit any Subsidiary of Borrower to fail, to pay
timely required contributions or installments due with respect to any waived
funding deficiency to any Plan;
(d) terminate, or permit any Subsidiary of Borrower to terminate,
any Plan where such event would result in any liability of Borrower, any of its
Subsidiaries or any member of ERISA Group under Title IV of ERISA;
(e) fail, or permit any Subsidiary of Borrower to fail, to make
any required contribution or payment to any Multiemployer Plan;
(f) fail, or permit any Subsidiary of Borrower to fail, to pay to
a Plan or Multiemployer Plan any required installment or any other payment
required under Section 412 of the Internal Revenue Code on or before the due
date for such installment or other payment;
(g) amend, or permit any Subsidiary of Borrower to amend, a Plan
resulting in an increase in current liability for the plan year such that either
of Borrower, any Subsidiary of Borrower or any the member of the ERISA Group is
required to provide security to such Plan under Section 401(a)(29) of the
Internal Revenue Code; or
(h) withdraw, or permit any Subsidiary of Borrower to withdraw,
from any Multiemployer Plan where such withdrawal is reasonably likely to result
in any liability of any such entity under Title IV of ERISA;
-26-
which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of Borrower, any of its
Subsidiaries or any member of the ERISA Group in excess of $10,000.
ARTICLE VII
-----------
EVENTS OF DEFAULT AND REMEDIES
------------------------------
7.1 Events of Default. The occurrence of any one or more of the
-----------------
following events, acts or occurrences shall constitute an event of default (an
"Event of Default") hereunder:
(a) Borrower fails to pay any payment of principal or interest
due on the Loans, the Fees, any Lender Expenses, or any other amount payable
hereunder or under any Loan Document;
(b) Borrower fails to observe or perform any of the covenants and
agreements set forth in Article VI;
(c) Borrower fails to observe or perform any covenant or
agreement set forth in this Agreement and the Loan Documents (other than those
covenants and agreements described in Sections 7.1(a) and 7.1(b)), and such
failure continues for fifteen (15) days after the earlier to occur of (i)
Borrower obtaining knowledge of such failure or (ii) Lender's dispatch of notice
to Borrower of such failure;
(d) Any representation, warranty or certification made by
Borrower or any Guarantor or any officer or employee of Borrower in this
Agreement or any Loan Document, in any certificate, financial statement or other
document delivered pursuant to this Agreement or any Loan Document proves to
have been untrue in any material respect when made;
(e) Borrower fails to pay when due (including any applicable
grace period) any payment in respect of Debt or other extensions of credit or
financial arrangements (other than under this Agreement);
(f) Any event or condition occurs that: (i) results in the
acceleration of the maturity of Debt, or other financial arrangements of
Borrower; or (ii) permits (or, with the giving of notice or lapse of time or
both, would permit) the holder or holders of such Debt or extensions of credit
or financial accommodations or any Person acting on behalf of such holder or
holders to accelerate the maturity thereof;
(g) Borrower commences a voluntary Insolvency Proceeding seeking
liquidation, reorganization or other relief with respect to itself or its Debt
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official over it or any substantial part of its property, or
consents to any such relief or to the appointment of or taking possession by any
such official in an involuntary Insolvency Proceeding or fails generally to pay
its Debt as it becomes due, or takes any action to authorize any of the
foregoing;
-27-
(h) An involuntary Insolvency Proceeding is commenced against
Borrower seeking liquidation, reorganization or other relief with respect to it
or its Debt or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property and any of the following events occur: (i) the petition commencing the
Insolvency Proceeding is not timely controverted; (ii) the petition commencing
the Insolvency Proceeding is not dismissed within forty-five (45) calendar days
of the date of the filing thereof; (iii) an interim trustee is appointed to take
possession of all or a substantial portion of the Assets of, or to operate all
or any substantial portion of the business of, Borrower; or (iv) an order for
relief shall have been issued or entered therein;
(i) Borrower suffers (i) any money judgment in excess of
applicable insurance coverage or (ii) any writ, warrant of attachment, or
similar process ("Process") except that money judgments of $5000 or less or
Process that are paid, cured or vacated within five (5) business days shall not
be a default;
(j) A judgment creditor obtains possession of any of the Assets
of Borrower or any Guarantor by any means, including levy, distraint, replevin,
or self-help, or any order, judgment or decree is entered decreeing the
dissolution of Borrower or any Guarantor;
(k) Any Change of Control occurs;
(l) Any of the Loan Documents fails to be in full force and
effect for any reason, or Lender fails to have a perfected, first priority Lien
in and upon all of the collateral assigned or pledged to Lender thereunder, or a
breach, default or an event of default occurs under any Loan Document; or
(m) Any other Material Adverse Effect occurs.
7.2 Remedies.
--------
(a) Acceleration. Upon the occurrence of any Event of Default
------------
described in Section 7.1(g) or 7.1(h), the Obligations shall become immediately
due and payable without any election or action on the part of Lender without
presentment, demand, protest or notice of any kind, all of which Borrower hereby
expressly waives. Upon the occurrence and continuance of any other Event of
Default, Lender may, at its election, without notice of its election and without
demand, immediately declare the Obligations to be due and payable, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which Borrower hereby expressly
waives.
(b) Termination of Revolving Credit Commitment. Upon the
------------------------------------------
occurrence of any Unmatured Event of Default or Event of Default, Lender may, at
its option, terminate the Revolving Credit Commitment and cease making Revolving
Loans to Borrower.
7.3 Remedies Cumulative. The rights and remedies of Lender herein and
-------------------
in the Loan Documents are cumulative, and are not exclusive of any other rights,
powers, privileges, or remedies, now or hereafter existing, at law, in equity or
otherwise.
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ARTICLE VIII
------------
TAXES
-----
8.1 Taxes on Payments. All payments in respect of the Obligations
-----------------
shall be made free and clear of and without any deduction or withholding for or
on account of any present and future taxes, levies, imposts, deductions,
charges, withholdings, assessments or governmental charges, and all liabilities
with respect thereto, imposed by the United States of America, any foreign
government, or any political subdivision or taxing authority thereof or therein,
excluding any taxes imposed on Lender under the Internal Revenue Code or similar
state and local laws and determined by Lender's net income, and any franchise
taxes imposed on Lender by the State of New York (or any political subdivision
thereof) (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, assessments, charges and liabilities being hereinafter referred to
as "Taxes"). If any Taxes are imposed and required by law to be deducted or
withheld from any amount payable to Lender, then Borrower shall (i) increase the
amount of such payment so that Lender will receive a net amount (after deduction
of all Taxes) equal to the amount due hereunder, and (ii) pay such Taxes to the
appropriate taxing authority for the account of Lender prior to the date on
which penalties attach thereto or interest accrues thereon; provided, however,
-------- -------
if any such penalties or interest shall become due, Borrower shall make prompt
payment thereof to the appropriate taxing authority.
8.2 Indemnification For Taxes. Borrower shall indemnify Lender for
-------------------------
the full amount of Taxes (including penalties, interest, expenses and Taxes
arising from or with respect to any indemnification payment) arising therefrom
or with respect thereto, whether or not the Taxes were correctly or legally
asserted. This indemnification shall be made on demand.
8.3 Evidence of Payment. Within thirty (30) days after the date of
-------------------
payment of any Taxes, Borrower shall furnish to Lender the original or a
certified copy of a receipt evidencing payment thereof. If no Taxes are payable
in respect of any payment due hereunder or under the Notes, Borrower shall
furnish to Lender a certificate from each appropriate taxing authority, or an
opinion of counsel acceptable to Lender, in either case stating that such
payment is exempt from or not subject to Taxes.
ARTICLE IX
----------
MISCELLANEOUS
-------------
9.1 Notices. All notices, requests and other communications to any
-------
party hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given to such party at its address or facsimile number set
forth on the signature pages hereof or such other address or facsimile number as
such party may hereafter specify by notice to the other party in accordance with
this Section 9.1. Each such notice, request or other communication shall be
deemed given on the second business day after mailing; provided that actual
--------
notice, however and from whomever given or received, shall always be effective
on receipt; provided further that notices to Lender pursuant to Article II shall
--------
not be effective until received by a Responsible Officer of Lender; provided
--------
further that notices sent by Lender in connection with Sections 9504 or 9505 of
-------
the New York Uniform Commercial Code shall be deemed given when
-29-
deposited in the mail or personally delivered, or, where permitted by law,
transmitted by facsimile.
9.2 No Waivers. No failure or delay by Lender in exercising any
----------
right, power or privilege hereunder or under any Loan Document shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
9.3 Lender Expenses; Documentary Taxes; Indemnification.
---------------------------------------------------
(a) Borrower shall pay all Lender Expenses on demand.
(b) Borrower shall pay all and indemnify Lender against any and
all transfer taxes, documentary taxes, assessments, or charges made by any
Governmental Authority and imposed by reason of the execution and delivery of
this Agreement, any of the Loan Documents, or any other document, instrument or
agreement entered into in connection herewith.
(c) Borrower shall and hereby agrees to indemnify, protect,
defend and hold harmless Lender and its directors, officers, agents, employees
and attorneys (collectively, the "Indemnified Persons" and individually, an
-------------------
"Indemnified Person") from and against (i) any and all losses, claims, damages,
------------------
liabilities, deficiencies, judgments, costs and expenses (including attorneys'
fees and attorneys' fees incurred pursuant to proceedings arising under the
Bankruptcy Code) incurred by any Indemnified Person (except to the extent that
it is finally judicially determined to have resulted from the gross negligence
or willful misconduct of any Indemnified Person) arising out of or by reason of
any litigations, investigations, claims or proceedings (whether administrative,
judicial or otherwise), including discovery, whether or not Lender is designated
a party thereto, which arise out of or are in any way related to (1) this
Agreement, the Loan Documents or the transactions contemplated hereby or
thereby, (2) any actual or proposed use by Borrower of the proceeds of the
Loans, or (3) Lender's entering into this Agreement, the Loan Documents or any
other agreements and documents relating hereto; (ii) any such losses, claims,
damages, liabilities, deficiencies, judgments, costs and expenses arising out of
or by reason of the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence on, under or about
Borrower's operations or property or property leased by Borrower of any
material, substance or waste which is or becomes designated as Hazardous
Materials; (iii) any such losses, claims, damages, liabilities, deficiencies,
judgments, costs and expenses, penalties, fines and other sanctions arising from
any claim that Borrower's or any Subsidiaries' premises is not in compliance
with the requirements of the ADA; and (iv) any such losses, claims, damages,
liabilities, deficiencies, judgments, costs and expenses incurred in connection
with any remedial or other action taken by Borrower or Lender in connection with
compliance by Borrower with any federal, state or local environmental laws,
acts, rules, regulations, orders, directions, ordinances, criteria or guidelines
(except to the extent that it is finally judicially determined to have resulted
from the gross negligence or willful misconduct of any Indemnified Person). If
and to the extent that the obligations of Borrower hereunder are unenforceable
for any reason, Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations of Lender which is permissible
under applicable law.
-30-
(d) Borrower's obligations under this Section 9.3 and under
Section 8.2 shall survive any termination of this Agreement and the Loan
Documents and the payment in full of the Obligations, and are in addition to,
and not in substitution of, any other of its obligations set forth in this
Agreement.
9.4 Amendments and Waivers. Any provision of this Agreement or any of
----------------------
the Loan Documents to which Borrower is a party may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the party
asserted to be bound thereby, and then such amendment or waiver shall be
effective only in the specific instance and specific purpose for which given.
9.5 Successors and Assigns; Participations; Disclosure.
--------------------------------------------------
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that Borrower may not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of Lender and any such
prohibited assignment or transfer by Borrower shall be void.
(b) Lender may make, carry or transfer the Loans at, to or for
the account of, any of its branch offices or the office of an Affiliate of
Lender or to any Federal Reserve Lender, all without Borrower's consent.
(c) Lender may, at its own expense, assign to one or more Lender
or other financial institutions all or a portion of its rights (including voting
rights) and obligations under this Agreement and the Loan Documents. In the
event of any such assignment by Lender pursuant to this Section 9.5(c), Lender's
obligations under this Agreement arising after the effective date of such
assignment shall be released and concurrently therewith, transferred to and
assumed by Lender's assignee to the extent provided for in the document
evidencing such assignment, and Lender shall give prompt notice of such
assignment to Borrower.
(d) Lender may at any time sell to one or more Lender or other
financial institutions (each a "Participant") participating interests in the
-----------
Loans, and in any other interest of Lender hereunder. In the event of any such
sale by Lender of a participating interest to a Participant, Lender's
obligations under this Agreement shall remain unchanged, Lender shall remain
solely responsible for the performance thereof, and Borrower shall continue to
deal solely and directly with Lender in connection with Lender's rights and
obligations under this Agreement. Borrower agrees that each Participant shall,
to the extent provided in its participation agreement, be entitled to the
benefits of Article VIII with respect to its participating interest.
(e) Borrower authorizes Lender to disclose to any assignee under
Section 9.5(c) or any Participant (either, a "Transferee") and any prospective
----------
Transferee any and all financial information in Lender's possession concerning
Borrower which has been delivered to Lender by Borrower pursuant to this
Agreement or which has been delivered to Lender by Borrower in connection with
Lender's credit evaluation prior to entering into this Agreement.
-31-
(f) Borrower agrees that Lender may use Borrower's name in
advertising and promotional materials, and in conjunction therewith, Lender may
disclose the amount of the Loans and the purpose thereof. Lender agree that they
shall seek prior approval of such materials from Borrower which approval shall
not be unreasonably withheld or delayed.
9.6 Counterparts; Effectiveness; Integration. This Agreement may be
----------------------------------------
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall be effective when executed by each of the
parties hereto. This Agreement constitutes the entire agreement and
understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof, EXCEPT that a certain retainer letter dated December 21, 1999 and the
Standard Terms and Conditions attached thereto, executed by Lender and Borrower,
attached hereto as Exhibit 9.6(a) shall and hereby do survive the execution of
this Agreement, remain in full force and effect and all of the provisions
therein are incorporated into this Agreement by reference as though set forth
herein in full.
9.7 Severability. The provisions of this Agreement are severable. The
------------
invalidity, in whole or in part, of any provision of this Agreement shall not
affect the validity or enforceability of any other of its provisions. If one or
more provisions hereof shall be declared invalid or unenforceable, the remaining
provisions shall remain in full force and effect and shall be construed in the
broadest possible manner to effectuate the purposes hereof.
9.8 Governing Law. This Agreement shall be deemed to have been made
-------------
in the State of New York and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of New York, without regard to principles of conflicts of law. This
Agreement, the Retainer Agreement executed simultaneously herewith and any other
matters hereunder shall be governed by and construed in accordance with the
internal laws of the State of New York, including, without limitation, Sections
5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the
New York Civil Practice Law and Rules.
9.9 Judicial Reference.
------------------
(a) (a) Other than (i) nonjudicial foreclosure and all matters
in connection therewith regarding security interests in real or personal
property; or (ii) the appointment of a receiver, or the exercise of other
provisional remedies (any and all of which may be initiated pursuant to
applicable law), each controversy, dispute or claim between the parties arising
out of or relating to this Agreement, which controversy, dispute or claim is not
settled in writing within thirty (30) days after the "Claim Date" (defined as
----------
the date on which a party subject to this Agreement gives written notice to all
other parties that a controversy, dispute or claim exists), shall be governed by
and construed in accordance with the internal laws of the State of New York,
including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Law and Rule 327(b) of the New York Civil Practice Law and
Rules. Lender and Borrower hereby irrevocably submit the to non-exclusive
jurisdiction of the federal and New York State courts located in the City, the
Borough of Manhattan in connection with any
-32-
suit, action or proceeding related to this Agreement or any of the matters
contemplated hereby, irrevocably waive any defense of lack of personal
jurisdiction and irrevocably agree that all claims in respect of any suit,
action or proceeding any be heard and determined in any such court. Lender and
Borrower irrevocably waive, to the fullest extent they may effectively do so
under applicable law, any objections which they may now or hereafter have to the
laying of venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such court
has been brought in any inconvenient forum.
[Remainder of this page intentionally left blank]
-33-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BORROWER: PC ▇▇▇▇▇▇▇.▇▇▇, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: President and CEO
----------------------
Address for Notices:
Suite 230, 4400 Dominion Street
Burnaby, B.C., Canada V5G 4G
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President and CEO
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LENDER: ICE Holdings North America, LLC
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: Managing Director
----------------------
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-34-
FORM OF SECURED REVOLVING NOTE
------------------------------
$1,000,000 New York, New York
________ __, 2000
1. FOR VALUE RECEIVED, PC ▇▇▇▇▇▇▇.▇▇▇, Inc., a Nevada corporation,
("Maker"), promises to pay to the order of ICE HOLDINGS NORTH AMERICA, LLC.,
-----
("Payee"), on or before the Maturity Date, the principal sum of One Million
-----
Dollars ($1,000,000), or such lesser sum as shall equal the aggregate
outstanding principal amount of the Revolving Loans made by Payee to Maker
pursuant to the Agreement (as defined below).
2. This Secured Revolving Note (this "Note") shall bear interest at a per
----
annum rate equal to eleven (11%) per cent per annum (the "Lending Rate"). All
------------
computations of interest shall be calculated on the basis of a year of three
hundred sixty (360) days for the actual days elapsed. Interest shall accrue from
the date of this Note to the date of repayment of this Note in accordance with
the provisions hereof. Maker shall pay all accrued but unpaid interest on the
Revolving Loans, in arrears, on the first Business Day of each and every month.
As used herein, "Business Day" means any day other than a Saturday, a Sunday, or
------------
a day on which commercial banks in the City of New York, New York are authorized
or required by law or executive order or decree to close.
3. Maker hereby authorizes Payee to record in its books and records the
date and amount of each Revolving Loan, and of each payment of principal made by
Maker, and Maker agrees that all such notations shall, in the absence of
manifest error, be conclusive as to the matters so noted; provided, however, any
-------- -------
failure by Payee to make such notation with respect to any Revolving Loan or
payment thereof shall not limit or otherwise affect Maker's obligations under
the Agreement or this Note.
4. If any payment due hereunder or under the Agreement shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), in
addition to and not in substitution of any other rights and remedies which Payee
may have with respect to such nonpayment, the entire principal balance owing
hereunder shall bear interest at the Lending Rate plus five hundred (500) basis
----
points until such overdue payment is paid in full. In addition, interest, Bank
Expenses and Fees due hereunder or under the Agreement not paid when due shall
bear interest at the Lending Rate plus five hundred (500) basis points until
----
such overdue payment is paid in full.
5. If any payment due hereunder, whether for principal, interest, or
otherwise, is not paid on or before the tenth day after the date such payment is
due, in addition to and not in substitution of any of Payee's other rights and
remedies with respect to such nonpayment, Maker shall pay to Payee, a late
payment fee ("Late Payment Fee") equal to five percent (5%) of the amount of
----------------
such overdue payment. The Late Payment Fee shall be due and payable on the
eleventh day after the due date of the overdue payment with respect thereto.
6. Maker shall make all payments hereunder in lawful money of the United
States of America and in immediately available funds to Payee at Payee's office
located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or to such other address as Payee
may from time to time specify by notice to Maker in accordance with the terms of
the Agreement.
7. In no event shall the interest rate and other charges hereunder exceed
the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that Payee has received interest and other
charges hereunder in excess of the highest rate applicable hereto, such excess
shall be deemed received on account of, and shall automatically be applied to
reduce, the principal balance hereof, and the provisions hereof shall be deemed
amended to provide for the highest permissible rate. If there is no principal
balance outstanding, Payee shall refund to Maker such excess.
8. This Note is the Revolving Note referred to in that certain Revolving
Credit Agreement, of even date herewith (as may be at any time hereafter
amended, supplemented, or otherwise modified or restated, the "Agreement"), by
---------
and between Maker, as Borrower, and Payee, as Lender, and is governed by the
terms thereof. Initially capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Agreement. The Agreement, among
other things, contains provisions for acceleration of the maturity of this Note
upon the happening of certain stated events and also for prepayments on account
of principal of this Note prior to the maturity hereof upon the terms and
conditions specified in the Agreement.
9. This Note is secured by the Liens granted to Payee under the Loan
Documents.
10. Maker hereby waives presentment for payment, notice of dishonor,
protest and notice of protest.
11. Governing Law. This Agreement shall be deemed to have been made in
-------------
the State of New York and the validity, construction, interpretation, and
enforcement hereof, and the rights of the parties hereto, shall be determined
under, governed by, and construed in accordance with the internal laws of the
State of New York, without regard to principles of conflicts of law. This
Agreement, the Retainer Agreement executed simultaneously herewith and any other
matters hereunder shall be governed by and construed in accordance with the
internal laws of the State of New York, including, without limitation, Sections
5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the
New York Civil Practice Law and Rules.
12. Judicial Reference
------------------
Other than (i) nonjudicial foreclosure and all matters
in connection therewith regarding security interests in real or personal
property; or (ii) the appointment of a receiver, or the exercise of other
provisional remedies (any and all of which may be initiated pursuant to
applicable law), each controversy, dispute or claim between the parties arising
out of or relating to this Agreement, which controversy, dispute or claim is not
settled in writing within thirty (30) days after the "Claim Date" (defined as
----------
the date on which a party subject to this Agreement gives written notice to all
other parties that a controversy, dispute or claim exists), shall be governed by
and construed in accordance with the internal laws of the State of New York,
including, without limitation, Sections 5-1401 and 5-1402 of the New York
General Obligations Law and Rule 327(b) of the New York Civil Practice Law and
Rules. Lenders and
Borrower hereby irrevocably submit the to non-exclusive jurisdiction of the
federal and New York State courts located in the City, the Borough of Manhattan
in connection with any suit, action or proceeding related to this Agreement or
any of the matters contemplated hereby, irrevocably waive any defense of lack of
personal jurisdiction and irrevocably agree that all claims in respect of any
suit, action or proceeding any be heard and determined in any such court.
Lenders and Borrower irrevocably waive, to the fullest extent they may
effectively do so under applicable law, any objections which they may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
Maker: PC ▇▇▇▇▇▇▇.▇▇▇, Inc.
By
------------------------------
Title
---------------------------