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Exhibit 10.09
SUBORDINATED LOAN AND SECURITY AGREEMENT
THIS AGREEMENT (the "Agreement") dated as of February 12, 1999, is
entered into by and between Quokka Sports, Inc., a Delaware corporation, with
its chief executive office, and principal place of business located at 000
Xxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxx Xxxxxxxxx, XX 00000 (the "Borrower") and
Comdisco, Inc., a Delaware corporation, with its principal place of business
located at 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (the "Lender" or
sometimes, "Comdisco"). In consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
RECITALS
WHEREAS, Borrower has requested Lender to make available to Borrower a
loan in the aggregate principal amount of TEN MILLION and 00/100 DOLLARS
($10,000,000) to be available in two (2) phases as follows; FIVE MILLION and
00/100 DOLLARS ($5,000,000) available immediately upon satisfaction of the
condition set forth in Section 7 hereof ("Phase I") and FIVE MILLION DOLLARS
($5,000,000) to be made available upon approval of Lender and satisfaction of
the conditions set forth in Section 7 hereto ("Phase II"), each phase available
in installments of not less than ONE MILLION DOLLARS ($1,000,000) each (as the
same may from time to time be amended, modified, supplemented or revised, the
"Loan"), which would be evidenced by Subordinated Promissory Note(s) executed
by Borrower substantially in the form of Exhibit A hereto (as the same may from
time to time be amended, modified, supplemented or restated, the "Note(s)").
WHEREAS, Lender is willing to make the Loan on the terms and conditions
set forth in this Agreement, and
WHEREAS, Lender and Borrower agree any Loan hereunder shall be
subordinate to Senior Debt (as defined herein) to the extent set forth in the
Subordination Agreement (as defined herein).
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, Borrower and Lender hereby agree as follows:
SECTION 1. DEFINITIONS
Unless otherwise defined herein, the following capitalized terms shall
have the following meanings (such meanings being equally applicable to both the
singular and plural form of the terms defined);
1.1 "ACCOUNT" means any "account," as such term is defined in Section
9106 of the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest and, in any event, shall
include, without limitation, all accounts receivable, book debts and other forms
of obligations (other than forms of obligations evidenced
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by Chattel Paper, Documents or Instruments) now owned or hereafter received or
acquired by or belonging or owing to Borrower (including, without limitation,
under any trade name, style or division thereof) whether arising out of goods
sold or services rendered by Borrower or from any other transaction, whether or
not the same involves the sale of goods or any other transaction, whether or not
the same involves the sale of goods or services by Borrower (including, without
limitation, any such obligation which may be characterized as an account or
contract right under the UCC) and all of Borrower's rights in, to and under all
purchase orders or receipts now owned or hereafter acquired by it for goods or
services, and all of Borrower's rights to any goods represented by any of the
foregoing (including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), and all monies due or to become due to Borrower under all
purchase orders and contracts for the sale of goods or the performance of
services or both by Borrower (whether or not yet earned by performance on the
part of Borrower or in connection with any other transaction), now in existence
or hereafter occurring, including, without limitation, the right to receive the
proceeds of said purchase orders and contracts, and all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.
1.2 "ACCOUNT DEBTOR" means any "account debtor," as such term is defined
in Section 9105(1)(a) of the UCC.
1.3 "ADVANCE" means each installment made by the Lender to Borrower
pursuant to the Loan to be evidenced by the Note(s) secured by the Collateral.
1.4 "ADVANCE DATE" means the funding date of any Advance of the Loan.
1.5 "ADVANCE REQUEST" means the request by Borrower for an Advance under
the Loan, each to be substantially in the form of Exhibit C attached hereto, as
submitted by Borrower to Lender from time to time.
1.6 "CHATTEL PAPER" means any "chattel paper," as such term is defined
in Section 9105(l)(b) of the UCC, now owned or hereafter acquired by Borrower or
in which Borrower now holds or hereafter acquires any interest.
1.7 "CLOSING DATE" means the date of this Agreement.
1.8 "COLLATERAL" shall have the meaning assigned to such term in Section
3 of this Agreement.
1.9 "CONTRACTS" means all contracts, undertakings, franchise agreements
or other agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which Borrower may now or hereafter have any right,
title or interest, including, without limitation, with respect to an Account,
any agreement relating to the terms of payment or the terms of performance
thereof.
1.10 "COPYRIGHTS" means all of the following now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (i) all copyrights,
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whether registered or unregistered, held pursuant to the laws of the United
States, any State thereof or of any other country; (ii) registrations,
applications and recordings in the United States Copyright Office or in any
similar office or agency of the United States, any state thereof or any other
country; (iii) any continuations, renewals or extensions thereof; and (iv) any
registrations to be issued in any pending applications.
1.11 "COPYRIGHT LICENSE" means any written agreement granting any right
to use any Copyright or Copyright registration now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest.
1.12 "DOCUMENTS" means any "documents," as such term is defined in
Section 9105(1)(f) of the UCC, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest.
1.13 "EQUIPMENT" means any "equipment," as such term is defined in
Section 9109(2), of the UCC, now or hereafter owned or acquired by Borrower or
in which Borrower now holds or hereafter acquires any interest, other than any
leasehold interest, and any and all additions, substitutions and replacements of
any of the foregoing, wherever located, together with all attachments,
components, parts, equipment and accessories installed thereon or affixed
thereto.
1.14 "EXCLUDED AGREEMENTS" means (i) any Warrant Agreement(s) executed
hereunder, and any other warrants (including without limitation, the Warrant
Agreement dated as of February 12, 1999) to acquire, or agreements governing the
rights of the holders of, any equity security of Borrower, (ii) any stock of the
Borrower issued or purchased pursuant to the Warrant Agreement, and (iii) the
Master Lease Agreement dated as of February 12, 1999 between Borrower, as
lessee, and Lender, as lessor, including, without limitation, any Equipment
Schedules and Summary Equipment Schedules to the Master Lease Agreement executed
or delivered by Borrower pursuant thereto and any other modifications or
amendments thereof, whereby Borrower (as lessee) leases equipment, software, or
goods from Lender (as lessor) to Borrower (as lessee).
1.15 "FACILITY FEE" means one percent (1%) of the principal amount of
each installment of the Loan due on the respective Advance Date.
1.16 "FIXTURES" means any "fixtures," as such term is defined in Section
9313(l)(a) of the UCC, now or hereafter owned or acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest and, now or
hereafter attached or affixed to or constituting a part of, or located in or
upon, real property wherever located, together with all right, title and
interest of Borrower in and to all extensions, improvements, betterments,
renewals, substitutes, and replacements of, and all additions and appurtenances
to any of the foregoing property, and all conversions of the security
constituted thereby, immediately upon any acquisition or release thereof or any
such conversion, as the case may be.
1.17 "GENERAL INTANGIBLES" means any "general intangibles," as such
tennis defined in Section 9106 of the UCC, now owned or hereafter acquired by
Borrower or in which
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Borrower now holds or hereafter acquires any interest and, in any event, shall
include, without limitation, all right, title and interest which Borrower may
now or hereafter have in or under any contract, all customer lists, interests in
partnerships, joint ventures (including, but not limited to any interest of
Borrower or its subsidiaries in the joint venture with the National Broadcasting
Corporation) and other business associations, permits, goodwill (other than the
goodwill associated with any Trademark, Trademark registration or Trademark
licensed under any Trademark License), claims in or under insurance policies,
including unearned premiums, uncertificated securities, cash and other forms of
money or currency, deposit accounts (including as defined in Section 9105(e)
of the UCC), rights to receive tax refunds and other payments and rights of
indemnification.
1.18 "INSTRUMENTS" means any "instrument," as such term is defined in
Section 9105(l)(i) of the UCC, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest.
1.19 "INTELLECTUAL PROPERTY" means all Copyrights, Trademarks, Patents,
rights to Intellectual Property, Licenses, trade secrets, source codes, customer
lists, proprietary or confidential information, inventions (whether or not
patented or patentable), technical information, procedures, designs, knowledge,
know-how, software, data bases, skill, expertise, experience, processes, models,
drawings, materials and records and goodwill.
1.20 "INVENTORY" means any "inventory," as such term is defined in
Section 9109(4) of the UCC, wherever located, now or hereafter owned or acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest,
and, in any event, shall include, without limitation, all inventory, goods and
other personal property which are held by or on behalf of Borrower for sale or
lease or are furnished or are to be furnished under a contract of service or
which constitute raw materials, work in process or materials used or consumed or
to be used or consumed in Borrower's business, or the processing, packaging,
promotion, delivery or shipping of the same, and all furnished goods whether or
not such inventory is listed on any schedules, assignments or reports furnished
to Lender from time to time and whether or not the same is in transit or in the
constructive, actual or exclusive occupancy or possession of Borrower or is held
by Borrower or by others for Borrower's account, including, without limitation,
all goods covered by purchase orders and contracts with suppliers and all goods
billed and held by suppliers and all inventory which may be located on premises
of Borrower or of any carriers, forwarding agents, truckers, warehousemen,
vendors, selling agents or other persons.
1.21 "IPO" means an initial public offering of Borrower's securities.
1.22 "LICENSE" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest
and any renewals or extensions thereof.
1.23 "LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, xxxx, xxxx or charge of
any kind, whether voluntarily incurred or arising by operation of law or
otherwise, against any property, any
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conditional sale or other title retention agreement, any lease in the nature of
a security interest, and the filing of any financing statement (other than a
precautionary financing statement with respect to a lease that is not in the
nature of a security interest) under the UCC or comparable law of any
jurisdiction.
1.24 "LOAN DOCUMENTS" shall mean and include this Agreement, the
Note(s), and any other documents executed in connection with the Secured
Obligations or the transactions contemplated hereby, as the same may from time
to time be amended, modified, supplemented or restated, provided, that the Loan
Documents shall not include any of the Excluded Agreements.
1.25 "MATERIAL ADVERSE EFFECT" means a material adverse effect upon: (i)
the business, operations, properties, assets or conditions (financial or
otherwise) of Borrower; or (ii) the ability of Borrower to perform, or of Lender
to enforce, the Secured Obligations.
1.26 "MATURITY DATE" means the date thirty-six (36) months from the
Advance Date of each installment of the Loan.
1.27 "PATENT LICENSE" means any written agreement granting any right
with respect to any invention on which a Patent is in existence now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest.
1.28 "PATENTS" means all of the following now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (a) letters patents of, or rights corresponding thereto in, the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of, or rights corresponding thereto in the
United States or any other country, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country; (b) all reissues, continuations,
continuations-in-part or extensions thereof; (c) all xxxxx patents, divisionals,
and patents of addition; and (d) all patents to issue in any such applications.
1.29 "PERMITTED LIENS" means any and all of the following: (i) liens in
favor of Lender, (ii) liens related to, or arising in connection with, Senior
Debt; (iii) liens securing the payment of taxes or other governmental charges
not yet delinquent or being contested in good faith by appropriate proceeding,
for which adequate reserves are maintained in accordance with generally
accepted accounting principles; (iv) liens securing claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other like persons
imposed without action of such parties, provided that the payment thereof is not
yet required; (v) liens incurred or deposits made in the ordinary course of
Borrower's or a subsidiary's business in connection with worker's compensation,
unemployment insurance, social security and other like laws; (vi) purchase money
security interests in personal property acquired after the date of this
Agreement, provided such are limited to the personal property so acquired and
proceeds, thereof; (vii) any liens existing as of the date hereof and
specifically disclosed by Borrower to Lender herein; (viii) leases, subleases,
licenses and sublicenses granted to others in the ordinary course of business
not interfering in any material respect with the conduct of the business of any
Borrower; (ix) liens arising from judgments, decrees or attachments to the
extent and only so long as such judgment,
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decree or attachment has not caused or resulted in an Event of Default (as
defined in Section 8.8); (x) liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xi) liens which constitute rights of set-off of
a customary nature or bankers' liens with respect to amounts on deposit, whether
arising by operation of law or by contract, in connection with arrangements
entered into with banks in the ordinary course of business; and (xii) liens
incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by liens of the type described in clause (vii) above,
provided that any extension, renewal or replacement lien shall be limited to the
property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinancing does not increase.
1.30 "PROCEEDS" means "proceeds," as such term is defined in Section
9306(l) of the UCC and, in any event, shall include, without limitation, (a) any
and all Accounts, Chattel Paper, Instruments, cash or other forms of money or
currency or other proceeds payable to Borrower from time to time in respect of
the Collateral, (b) any and all proceeds of any insurance, indemnity, warranty
or guaranty payable to Borrower from time to time with respect to any of the
Collateral, (c) any and all payments (in any form whatsoever) made or due and
payable to Borrower from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental authority (or any Person acting under color of
governmental authority), and (d) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
1.31 "RECEIVABLES" shall mean and include all of the Borrower's
Accounts, Instruments, Documents, Chattel Paper and General Intangibles whether
secured or unsecured, whether now existing or hereafter created or arising, and
whether or not specifically sold or assigned to Lender hereunder.
1.32 "SECURED OBLIGATIONS" shall mean and include all principal,
interest, fees, costs, or other liabilities or obligations for monetary amounts
owed by Borrower to Lender, whether due or to become due, matured or unmatured,
liquidated or unliquidated, contingent or non-contingent, and all covenants and
duties regarding such amounts, of any kind of nature, present or future, arising
under this Agreement, the Note(s), or any of the other Loan Documents, whether
or not evidenced by any Note(s), this Agreement or other instrument, as the same
may from time to time be amended, modified, supplemented or restated, provided,
that the Secured Obligations shall not include any indebtedness or obligations
of Borrower arising under or in connection with the Excluded Agreements.
1.33 "SENIOR CREDITOR" means Silicon Valley Bank and/or any other bank,
insurance company, pension fund, or other institutional lender to be determined,
or a syndication of such institutional lenders that provides Senior Debt
financing to Borrower; provided, that Senior Creditor shall not include any
officer, director, shareholder, venture capital investor, or insider of
Borrower, or any affiliate of the foregoing persons, except upon the express
written consent of Lender.
1.34 "SENIOR DEBT" means any and all indebtedness and obligations for
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borrowed money (including, without limitation, principal, premium (if any),
interest, fees charges, expenses, costs, professional fees and expenses, and
reimbursement obligations) at any time owing by Borrower to Senior Creditor
under the Senior Loan Documents, including, but not limited to such amounts as
may accrue or be incurred before or after default or workout or the commencement
of any liquidation, dissolution, bankruptcy, receivership or reorganization by
or against Borrower PROVIDED, that Senior Debt shall not include debt exceeding
SEVEN MILLION DOLLARS ($7,000,000) outstanding at any one time up to the
effective date of an IPO.
1.35 "SENIOR LOAN DOCUMENTS" means the loan agreement between Borrower
and Senior Creditor and any other agreement, security agreement, document,
promissory note, UCC financing statement, or instrument executed by Borrower in
favor of Senior Creditor pursuant to or in connection with the Senior Debt or
the loan agreement, as the same may from time to time be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.36 "SUBORDINATION AGREEMENT" means the Subordination Agreement of even
date herewith, entered into Silicon Valley Bank as Senior Creditor and Lender
and the Subordination Agreement of even date herewith between Borrower and
Lender for the benefit of Senior Creditor, other than Silicon Valley Bank.
1.37 "TRADEMARK LICENSE" means any written agreement granting any right
to use any Trademark or Trademark registration now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest.
1.38 "TRADEMARKS" means any of the following now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (a) any and all trademarks, tradenames, corporate names, business
names, trade styles, service marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof and (b) any reissues, extensions or
renewals thereof.
1.39 "UCC" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Illinois. Unless otherwise defined
herein, terms that are defined in the UCC and used herein shall have the
meanings given to them in the UCC.
1.40 "WARRANT AGREEMENT(S)" shall mean that agreement entered into in
connection with the Loan, substantially in the form attached hereto as Exhibit B
pursuant to which Borrower grants to Lender the right to purchase that number of
shares of Series C Preferred Stock of Borrower equivalent to (i) as to Phase I,
fourteen percent (14%) of the principal amount of Phase I divided by an exercise
price of $3.25 per share, provided, however, if the effective date of Borrower's
IPO occurs after November 30, 1999, the percentage for purposes of calculating
warrants shall be increased to sixteen percent (16%); and (ii) as to Phase II,
thirteen and three-quarters percent (13.75%) of the principal amount of Phase II
divided by
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an exercise price per share equivalent to the established strike price of the
most recently issued employee common stock options at the time of the
availability of Phase II.
SECTION 2. THE LOAN
2.1 Subject to the terms and conditions set forth herein, Lender shall
lend to Borrower the aggregate original principal amount of TEN MILLION AND
00/100 Dollars ($10,000,000) with interest at the rate of twelve and one-quarter
percent (12.25%). The principal amount of each installment of the Loan shall
accrue interest at the rate of twelve and one-quarter percent (12.25%) per annum
from the Advance Date until the earlier of (i) the effective date of IPO; (ii)
the effective date of an acquisition or merger of Borrower in which more than
fifty percent (50%) of the voting power of the Borrower is transferred,
excluding any merger effected exclusively to change the domicile of the
Borrower; (iii) February 1, 2000; or (iv) the closing of the next private equity
financing of Borrower in excess of FORTY MILLION DOLLARS ($40,000,000). Upon the
occurrence of the earliest of the foregoing events, unless prepaid in accordance
with Section 2.2 below, the principal and accrued interest for each installment
of the Loan shall be payable in equal monthly installments of principal and
interest commencing upon the first day of the month immediately following such
event and continuing for a period ending thirty-six (36) months from the Advance
Date (each, a "Payment Date").
2.2 Borrower shall have the option to prepay any installment of the
Loan, in whole or in part, by paying the principal amount thereon together with
all accrued and unpaid interest with respect to such principal amount, as of the
date of such prepayment, without premium.
2.3 (a) Notwithstanding any provision in this Agreement, the Note(s),
or any other Loan Document, it is not the parties' intent to contract for,
charge or receive interest at a rate that is greater than the maximum rate
permissible by law which a court of competent jurisdiction shall deem applicable
hereto (which under the laws of the State of Illinois shall be deemed to be the
laws relating to permissible rates of interest on commercial loans) (the
"Maximum Rate"). If the Borrower actually pays Lender an amount of interest,
chargeable on the total aggregate principal Secured Obligations of Borrower
under this Agreement and the Note(s) (as said rate is calculated over a period
of time from the date of this Agreement through the end of time that any
principal is outstanding on the Note(s)), which amount of interest exceeds
interest calculated at the Maximum Rate on said principal chargeable over said
period of time, then such excess interest actually paid by Borrower shall be
applied first, to the payment of principal outstanding on the Note(s); second,
after all principal is repaid, to the payment of Lender's out of pocket costs,
expenses, and professional fees which are owed by Borrower to Lender under this
Agreement or the Loan Documents; and third, after all principal, costs,
expenses, and professional fees owed by Borrower to Lender are repaid, the
excess (if any) shall be refunded to Borrower, and the effective rate of
interest will be automatically reduced to the Maximum Rate.
(b) In the event any interest is not paid when due hereunder,
delinquent interest shall be added to principal and shall bear interest on
interest, compounded at
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the rate set forth in Section 2.1.
(c) Upon and during the continuation of an Event of Default
hereunder, all Secured Obligations, including principal, interest, compounded
interest, and professional fees, shall bear interest at a rate per annum equal
to the rate set forth in Section 2.1. plus three percent (3%) per annum
("Default Rate").
2.4 If the Borrower has not repaid the outstanding principal amount
under the Loan in its entirety within 30 days of the Maturity Date (as defined
in the applicable Note(s)), then for each additional month, or portion thereof,
thereafter that the outstanding principal is not paid, Lender shall have the
right to purchase from the Borrower, at the applicable Exercise Price (adjusted,
as set forth and defined in the Warrant Agreement), an additional number of
shares of Preferred Stock (as defined in the Warrant Agreement) which number
shall be determined by (i) multiplying the outstanding principal amount which is
due, but unpaid by one-half percent (.5%) and (ii) dividing the product thereof
by the applicable Exercise Price. In addition to the foregoing, Borrower shall
pay to Lender a cash payment in an amount equal to one-half percent (.5%)of the
outstanding unpaid principal amount.
SECTION 3. SECURITY INTEREST
As security for the prompt, complete and indefeasible payment when due (whether
at stated payment dates or otherwise) of all the Secured Obligations and in
order to induce Lender to make the Loan upon the terms and subject to the
conditions of the Notes(s), Borrower hereby assigns, conveys, mortgages,
pledges, hypothecates and transfers to Lender for security purposes only, and
hereby grants to Lender a security interest in, all of Borrower's right, title
and interest in, to and under each of the following (all of which being
hereinafter collectively called the "Collateral"):
(a) All Receivables;
(b) All Equipment;
(c) All Fixtures;
(d) All General Intangibles (excluding Intellectual Property);
(e) All Inventory;
(f) All other goods and personal property of Borrower whether
tangible or intangible (specifically excluding Intellectual
Property) and whether now or hereafter owned or existing,
leased, consigned by or to, or acquired by, Borrower and
wherever located; and
(g) To the extent not otherwise included, all Proceeds of each of
the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of
the foregoing.
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SECTION 4. REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents, warrants and agrees that;
4.1 Borrower owns all right title and interest in and to the Collateral,
free of all liens, security interests, encumbrances and claims whatsoever,
except for Permitted Liens.
4.2 Borrower has the full power and authority to, and does hereby grant
and convey to the Lender, a perfected security interest in the Collateral as
security for the Secured Obligations, free of all liens, security interests,
encumbrances and claims, other than Permitted Liens and shall execute such
Uniform Commercial Code financing statements in connection herewith as the
Lender may reasonably request. Except as set forth herein, no other lien,
security interest, adverse claim or encumbrance has been created by Borrower or
is known by Borrower to exist with respect to any Collateral.
4.3 Borrower is a corporation duly organized, legally existing and in
good standing under the laws of the State of Delaware, and is duly qualified as
a foreign corporation in all jurisdictions in which the nature of its business
or location of its properties require such qualifications and where the failure
to be qualified would have a Material Adverse Effect.
4.4 Borrower's execution, delivery and performance of the Note(s), this
Agreement, all financing statements, all other Loan Documents required to be
delivered or executed in connection herewith, and the Warrant Agreement(s) have
been duly authorized by all necessary corporate action of Borrower, the
individual or individuals executing the Loan Documents and the Warrant
Agreement(s) were duly authorized to do so; and the Loan Documents and the
Warrant Agreement(s) constitute legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization or other similar laws
generally affecting the enforcement of the rights of creditors.
4.5 This Agreement, the other Loan Documents and the Warrant
Agreement(s) do not and will not violate any provisions of Borrower's
Certificate of Incorporation, bylaws or any material contract, or agreement,
law, regulation, order, injunction, judgment, decree or writ to which the
Borrower is subject, or result in the creation or imposition of any lien,
security interest or other encumbrance upon the Collateral, other than those
created by this Agreement.
4.6 The execution, delivery and performance of this Agreement, the other
Loan Documents and the Warrant Agreement(s) do not require the consent or
approval of any other person or entity including, without limitation, any
regulatory authority or governmental body of the United States or any state
thereof or any political subdivision of the United States or any state thereof.
4.7 No event which has had or could reasonably be expected to have a
Material Adverse Effect has occurred is continuing.
4.8 No fact or condition exists that would (or would, with the passage
of time,
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the giving of notice, or both) constitute a default under the Loan Agreement
between Borrower and Senior Creditor.
4.9 Borrower has filed and will file all tax returns, federal, state and
local, which it is required to file and has duly paid or fully reserved for all
taxes or installments thereof (including any interest or penalties) as and when
due, which have or may become due pursuant to such returns or pursuant to any
assessment received by Borrower for the three (3) years preceding the Closing
Date, if any (including any taxes being contested in good faith and by
appropriate proceedings).
SECTION 5. INSURANCE
5.1 So long as there are any Secured Obligations outstanding, Borrower
shall cause to be carried and maintained commercial general liability insurance
against risks customarily insured against in Borrower's line of business. Such
risks shall include, without limitation, the risks of death, bodily injury and
property damage. So long as there are any Secured Obligations outstanding,
Borrower shall also cause to be carried and maintained insurance upon the
Collateral and Borrower's business, covering casualty, hazard and such other
property risks in amounts equal to the full replacement cost of the Collateral.
Borrower shall deliver to Lender lender's loss payable endorsements (Form BFU
438 or equivalent) naming Lender as loss payee and additional insured. Borrower
shall use commercially reasonable efforts to cause all policies evidencing such
insurance to provide for at least thirty (30) days prior written notice by the
underwriter or insurance company to Lender in the event of cancellation or
expiration. Such policies shall be issued by such insurers and in such amounts
as are reasonably acceptable to Lender.
5.2 Borrower shall and does hereby indemnify and hold Lender, its agents
and shareholders harmless from and against any and all claims, costs, expenses,
damages and liabilities (including, without limitation, such claims, costs,
expenses, damages and liabilities based on liability in tort, including without
limitation, strict liability in tort), including reasonable attorneys' fees,
arising out of the disposition or utilization of the Collateral, other than
claims arising at or caused by Lender's gross negligence or willful misconduct.
SECTION 6. COVENANTS OF BORROWER
Borrower covenants and agrees as follows at all times while any of the
Secured Obligations remain outstanding:
6.1 Borrower shall furnish to Lender the financial statements listed
hereinafter, each prepared in accordance with generally accepted accounting
principles consistently applied (the "Financial Statements"):
(a) as soon as practicable (and in any event within thirty (30)
days) after the end of each month, unaudited interim financial statements as of
the end of such month (prepared on a consolidated and consolidating basis, if
applicable), including balance sheet and related statements of income and cash
flows accompanied by a report, to the extent
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applicable, detailing any material contingencies (including the commencement of
any material litigation by or against Borrower) or any other occurrence that
could reasonably be expected to have a Material Adverse Effect, all certified by
Borrower's Chief Executive Officer or Chief Financial Officer to be true and
correct in all material respects;
(b) as soon as practicable (and in any event within ninety (90)
days) after the end of each fiscal year, unqualified audited financial
statements as of the end of such year (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows, and setting forth in comparative form the
corresponding figures for the preceding fiscal year, certified by a firm of
independent certified public accountants selected by Borrower and reasonably
acceptable to Lender, accompanied by any management report from such
accountants;
(c) promptly after the sending or filing thereof, as the case may
be, copies of any proxy statements, financial statements or reports which
Borrower has made available to its shareholders and copies of any regular,
periodic and special reports or registration statements which Borrower files
with the Securities and Exchange Commission or any governmental authority which
may be substituted therefor, or any national securities exchange; and
(d) promptly, any additional information, financial or otherwise
(including, but not limited to, tax returns and names of principal creditors) as
Lender reasonably believes necessary to evaluate Borrower's continuing ability
to meet its financial obligations.
6.2 Borrower shall permit any authorized representative of Lender and
its attorneys and accountants on reasonable notice to inspect, examine and make
copies and abstracts of the books of account and records of Borrower at
reasonable times during normal business hours; provided, that not more than two
such inspections or examinations shall take place in any calendar year except
upon the occurrence and continuation of an Event of Default. In addition, such
representative of Lender and its attorneys and accountants shall have the right
to meet with management and officers of Borrower to discuss such books of
account and records.
6.3 Borrower will from time to time execute, deliver and file, alone or
with Lender, any financing statements, security agreements or other documents;
procure any instruments or documents as may be reasonably requested by lender;
and take all further action that may be necessary or desirable, or that Lender
may reasonably request, to confirm, perfect, preserve and protect the security
interests intended to be granted hereby, and in addition, and for such purposes
only, Borrower hereby authorizes Lender to execute and deliver on behalf of
Borrower and to file such financing statements, security agreement and other
documents without the signature of Borrower either in Lender's name or in the
name of Borrower as agent and attorney-in-fact for Borrower. The parties agree
that a carbon, photographic or other reproduction of this Agreement shall be
sufficient as a financing statement and may be filed in any appropriate office
in lieu thereof.
6.4 Borrower shall protect and defend Borrower's title as well as the
interest
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of the Lender against all persons claiming any interest adverse to
Borrower or Lender and shall at all times keep the Collateral free and clear
from any legal process, liens or encumbrances whatsoever (except any placed
thereon by Lender or Permitted Liens) and shall give Lender immediate written
notice thereof.
6.5 Without Lender's prior written consent, Borrower shall not, to the
extent such action would have a Material Adverse Effect, (a) grant any material
extension of the time of payment of any of the Receivables, (b) to any material
extent, compromise, compound or settle the same for less than the full amount
thereof, (c) release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon other than trade
discounts granted in the ordinary course of business of Borrower.
6.6 Borrower shall maintain and protect its properties, assets and
facilities, including without limitation, its Equipment and Fixtures, in good
order and working repair and condition (taking into consideration ordinary wear
and tear) and from time to time make or cause to be made all necessary and
proper repairs, renewals and replacements thereto and shall competently manage
and care for its property in accordance with prudent industry practices.
6.7 Borrower shall not merge with or into any other entity; or sell or
convey all or substantially all of its assets or stock to any other person or
entity without notifying Lender a minimum of twenty (20) days prior to the
closing date and requesting Lender's consent to the assignment of all of
Borrower's Secured Obligations hereunder to the successor entity in form and
substance satisfactory to Lender. In the event Lender does not consent to such
assignment the parties agree Borrower shall prepay the Loan in accordance with
Section 2.2 hereof.
6.8 Borrower shall not, without the prior written consent of Lender,
such consent not to be unreasonably withheld, declare or pay any cash dividend
or make a distribution on any class of stock, other than pursuant to employee
repurchase plans upon an employee's death or termination of employment or
transfer, sell, lease, lend or in any other manner convey any equitable,
beneficial or legal interest in any material portion of the assets of Borrower
(except inventory sold in the normal course of business).
6.9 Upon the request of Lender, Borrower shall, during business hours,
make the Inventory and Equipment available to Lender for inspection at the place
where it is normally located and shall make Borrower's log and maintenance
records pertaining to the Inventory and Equipment available to Lender for
inspection.
6.10 Borrower covenants and agrees to pay when due, all taxes, fees or
other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower, Lender or the
Collateral or upon Borrower's ownership, possession, use, operation or
disposition thereof or upon Borrower's rents, receipts or earnings arising
therefrom. Borrower shall file on or before the due date therefor all personal
property tax returns in respect of the Collateral. Notwithstanding the
foregoing, Borrower may contest, in good faith and by appropriate proceedings,
taxes for which Borrower maintains adequate reserves therefor.
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6.11 Borrower shall not relocate any item of the Collateral (other than
sale of inventory in the ordinary course of business) except: (A) (i) with prior
notice to the Lender; and (ii) if such relocation shall be within the
continental United States, or (B) in the case of field production equipment, in
the ordinary course of business. If permitted to relocate Collateral pursuant to
the foregoing sentence, unless otherwise agreed in writing by Lender, and other
than with respect to field production equipment, Borrower shall first (a) cause
to be filed and/or delivered to the Lender all Uniform Commercial Code financing
statements, certificates or other documents or instruments necessary to continue
in effect the perfected security interest of the Lender in the Collateral, and
(b) have given the Lender no less than fifteen (15) days prior written notice of
such relocation.
6.12 Borrower shall not sell, transfer, assign, hypothecate or otherwise
encumber its Intellectual Property without Lender's prior written consent, such
consent not to be unreasonably withheld.
6.13 Borrower shall, within ninety (90) days of the Closing Date, enter
into an equipment lease agreement with Lender in an amount equal to or in
excess of FIVE HUNDRED THOUSAND DOLLARS ($500,000).
SECTION 7. CONDITIONS PRECEDENT TO LOAN
The obligation of Lender to fund each installment of the Loan on each
Advance Date shall be subject to satisfaction by Borrower or waiver by Lender,
in Lender's sole discretion, of the following conditions:
7.1 (a) Phase I: The Advance Date for any installment shall occur on
or before August 19, 1999; .
(b) Phase II: The Advance Date for any installment shall occur
on or before the date six (6) months from the date of Lender's approval of
availability of funds, such approval to be subject to the following conditions:
(i) formal written request of Borrower,
(ii) continued successful execution of relationship with
National Broadcasting Corporation;
(iii) continued successful execution of "Around Alone"
event; and
(iv) due diligence and approval of Lender.
7.2 DOCUMENT DELIVERY. Borrower, on or prior to the Closing Date, shall
have delivered to Lender the following:
(a) executed originals of the Agreement, [Note(s)], and any
documents reasonably required by Lender to effectuate the liens of Lender, with
respect to all
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Collateral;
(b) certified copy of resolutions of Borrower's board of
directors evidencing approval of the borrowing and other transactions evidenced
by the Loan Documents and the Warrant Agreement(s);
(c) certified copies of the Certificate of Incorporation and the
Bylaws, as amended through the Closing Date, of Borrower,
(d) certificate of good standing for Borrower from its state of
incorporation and similar certificates from all other jurisdictions in which it
does business and where the failure to be qualified would have a Material
Adverse Effect; and
(e) such other documents as Lender may reasonably request.
7.3 ADVANCE REQUEST. Borrower shall:
(a) deliver to Lender, at least five (5) business days prior to
the Advance Date, written notice in the form of an Advance Request (attached as
Exhibit C), or as otherwise specified by Lender from time to time, specifying
the date and amount of such Advance.
(b) deliver executed original Note(s) and Warrant Agreement(s) as
set forth in Section 2, as applicable.
(c) pay the Facility Fee; and
(d) provide such other documents as Lender may reasonably
request.
7.4 PERFECTION OF SECURITY INTERESTS. Borrower shall have taken or
caused to be taken such actions reasonably requested by Lender to grant Lender a
perfected security interest in the Collateral, subject only to Permitted Liens.
Such actions shall include, without limitation, the delivery to Lender of all
appropriate financing statements, executed by Borrower, as to the Collateral
granted by Borrower for all jurisdictions as may be necessary or desirable to
perfect the security interest of Lender in such Collateral
7.5 ABSENCE OF EVENTS OF DEFAULTS. As of the Closing Date or the Advance
Date, no fact or condition exists that would (or would, with the passage of
time, the giving of notice, or both) constitute an Event of Default under this
Agreement or any of the Loan Documents and no fact or condition exists that
would (or would, with the passage of time, the giving of notice, or both)
constitute a default under the Senior Loan Documents between Borrower and Senior
Creditor.
7.6 MATERIAL ADVERSE EFFECT. As of the Closing Date or the Advance Date,
no event which has had or could reasonably be expected to have a Material
Adverse Effect has occurred and is continuing, but excluding operating losses of
Borrower which are within
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Borrower's projections as specified on Schedule I hereto.
SECTION 8. DEFAULT
The occurrence of any one or more of the following events (herein called
"Events of Default") shall constitute a default hereunder and under the Note(s)
and other Loan Documents:
8.1 Borrower defaults in the payment of any principal, interest or other
Secured Obligation involving the payment of money under this Agreement, the
Note(s) or any of the other Loan Documents, and such default continues for more
than five (5) days after the due date thereof; or
8.2 Borrower defaults in the performance of any other covenant or
Secured Obligation of Borrower hereunder or under the Note(s) or any of the
other Loan Documents, and such default continues for more than twenty (20) days
after Lender has given notice of such default to Borrower.
8.3 Any representation or warranty made herein by' Borrower shall prove
to have been false or misleading in any material respect as of the date made; or
8.4 Borrower shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts as they become due, or
shall file a voluntary petition in bankruptcy, or shall file any petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation pertinent to such circumstances, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver, or
liquidator of Borrower or of all or any substantial part (33-1/3% or more) of
the properties of Borrower, or Borrower or its directors or majority
shareholders shall take any action initiating the dissolution or liquidation of
Borrower, or
8.5 Sixty (60) days shall have expired after the commencement of an
action by or against Borrower seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, without such action being dismissed or all
orders or proceedings thereunder affecting the operations or the business of
Borrower being stayed; or a stay of any such order or proceedings shall
thereafter be set aside and the action setting it aside shall not be timely
appealed; or Borrower shall file any answer admitting or not contesting the
material allegations of a petition filed against Borrower in any such
proceedings; or the court in which such proceedings are pending shall enter a
decree or order granting the relief sought in any such proceedings; or
8.6 Sixty (60) days shall have expired after the appointment, without
the consent or acquiescence of Borrower, of any trustee, receiver or liquidator
of Borrower or of all or any substantial part of the properties of Borrower
without such appointment being vacated; or
8.7 The default by Borrower under any Excluded Agreement(s), any other
promissory note or agreement for borrowed money which results in an acceleration
of the
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obligations thereunder, or any other agreement between Borrower and Lender; or
8.8 The occurrence of any default under any lease or other agreement or
obligation of Borrower involving an amount in excess of $100,000.00 or having a
Material Adverse Effect; or the entry of any judgment against Borrower involving
an award in excess of $100,000.00 that would have a Material Adverse Effect,
that has not been bonded or stayed on appeal within thirty (30) days; or
8.9 The occurrence of any material default under the Senior Loan
Documents.
SECTION 9. REMEDIES
Upon the occurrence and continuation of any one or more Events of
Default, Lender, at its option, may declare the Note(s) and all of the other
Secured Obligations to be accelerated and immediately due and payable (provided,
that upon the occurrence of an Event of Default of the type described in
Sections 8.4 or 8.5, the Note(s) and all of the other Secured Obligations shall
automatically be accelerated and made due and payable without any further act),
whereupon the unpaid principal of and accrued interest on such Note(s) and all
other outstanding Secured Obligations shall become immediately due and payable,
and shall thereafter bear interest at the Default Rate set forth in, and
calculated according to, Section 2.3 (c) of this Agreement. Lender may exercise
all rights and remedies with respect to the Collateral under the Loan Documents
or otherwise available to it under applicable law, including the right to
release, hold or otherwise dispose of all or any part of the Collateral and the
right to occupy, utilize, process and commingle the Collateral.
Upon the happening and during the continuance of any Event of Default,
Lender may then, or at any time thereafter and from time to time, apply,
collect, sell in one or more sales, lease or otherwise dispose of, any or all of
the Collateral, in its then condition or following any commercially reasonable
preparation or processing, in such order as Lender may elect, and any such sale
may be made either at public or private sale at its place of business or
elsewhere. Borrower agrees that any such public or private sale may occur upon
five (5) calendar days' prior written notice to Borrower. Lender may require
Borrower to assemble the Collateral and make it available to Lender at a place
designated by Lender which is reasonably convenient to Lender and Borrower. The
proceeds of any sale, disposition or other realization upon all or any part of
the Collateral shall be distributed by Lender in the following order of
priorities:
First, to Lender in an amount sufficient to pay in full Lender's costs
and professionals' and advisors' fees and expenses;
Second, to Lender in an amount equal to the then unpaid amount of the
Secured Obligations in such order and priority as Lender may choose in
its sole discretion; and
Finally, upon payment in full of all of the Secured Obligations, to
Borrower or its representatives or as a court of competent jurisdiction
may direct.
Lender shall be deemed to have acted reasonably in the custody,
preservation and
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disposition of any of the Collateral if it complies with the obligations of a
secured party under Section 9207 of the UCC.
Lender's rights and remedies hereunder are subject to the terms and
conditions of the Subordination Agreement.
SECTION 10. MISCELLANEOUS
10.1 CONTINUATION OF SECURITY INTEREST. This is a continuing Agreement
and the grant of a security interest hereunder shall remain in full force and
effect and all the rights, powers and remedies of Lender hereunder shall
continue to exist until the Secured Obligations are paid in full as the same
become due and payable and until Lender has executed a written termination
statement (which Lender shall execute within a reasonable time, not to exceed
ten (10) business days, after full payment of the Secured Obligations
hereunder), reassigning to Borrower, without recourse, the Collateral and all
rights conveyed hereby and returning possession of the Collateral to Borrower.
The rights, powers and remedies of Lender hereunder shall be in addition to all
rights, powers and remedies given by statute or rule of law and are cumulative.
The exercise of any one or more of the rights, powers and remedies provided
herein shall not be construed as a waiver of or election of remedies with
respect to any other rights, powers and remedies of Lender.
10.2 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
and duration of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
10.3 NOTICE. Except as otherwise provided herein, all notices and
service of process required, contemplated, or permitted hereunder or with
respect to the subject matter hereof shall be in writing, and shall be deemed to
have been validly served, given or delivered upon the earlier of (i) the first
business day after transmission by facsimile or hand delivery or deposit with an
overnight express service or overnight mail delivery service; or (ii) the third
calendar day after deposit in the United States mails, with proper first class
postage prepaid, and shall be addressed to the party to be notified as follows:
(a) IF TO LENDER:
COMDISCO, INC.
Legal Department
Attention: General Counsel
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
WITH A COPY TO:
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COMDISCO, INC./COMDISCO VENTURES
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
(b) IF TO BORROWER:
QUOKKA SPORTS, INC.
Attention: Chief Financial Officer
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
or to such other address as each party may designate for itself by like notice.
10.4 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the Note(s), and the
other Loan Documents, and the Warrant Agreement(s) constitute the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof and thereof, and supersede and replace in their entirety any prior
proposals, term sheets, letters, negotiations or other documents or agreements,
whether written or oral, with respect to the subject matter hereof or thereof
(including, without limitation, Lender's proposal letter dated February 3,
1999), all of which are merged herein and therein. None of the terms of this
Agreement, the Note(s), or any of the other Loan Documents may be amended except
by an instrument executed by each of the parties hereto.
10.5 HEADINGS. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
10.6 NO WAIVER. The powers conferred upon Lender by this Agreement are
solely to protect its interest in the Collateral and shall not impose any duty
upon Lender to exercise any such powers. No omission, or delay, by Lender at any
time to enforce any right or remedy reserved to it, or to require performance of
any of the terms, covenants or provisions hereof by Borrower at any time
designated, shall be a waiver of any such right or remedy to which Lender is
entitled, nor shall it in any way affect the right of Lender to enforce such
provisions thereafter.
10.7 SURVIVAL. All agreements, representations and warranties contained
in this Agreement, the Note(s), the other Loan Documents and the Warrant
Agreement(s) or in any document delivered pursuant hereto or thereto shall be
for the benefit of Lender and shall survive the execution and delivery of this
Agreement and the expiration or other termination of this Agreement.
10.8 SUCCESSOR AND ASSIGNS. The provisions of this Agreement, the other
Loan Documents and the Warrant Agreement(s) shall inure to the benefit of and be
binding on
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Borrower and its permitted assigns (if any). Borrower shall not assign its
obligations under this Agreement, the Note(s), any of the other Loan Documents
or the Warrant Agreement(s), without Lender's express written consent, and any
such attempted assignment shall be void and of no effect. Lender may assign,
transfer, or endorse its rights hereunder and under the other Loan Documents or
Warrant Agreement(s) without prior notice to Borrower, and all of such rights
shall inure to the benefit of Lender's successors and assigns.
10.9 FURTHER INDEMNIFICATION. Borrower agrees to pay, and to save Lender
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all excise, sales or other similar taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
10.10 GOVERNING LAW. This Agreement, the Note(s), the other Loan
Documents and the Warrant Agreement(s) have been negotiated and delivered to
Lender in the State of Illinois, and shall not become effective until accepted
by Lender in the State of Illinois. Payment to Lender by Borrower of the Secured
Obligations is due in the State of Illinois. This Agreement, the Note(s), the
other Loan Documents and the Warrant Agreement(s) shall be governed by, and
construed and enforced in accordance with, the laws of the State of Illinois,
excluding conflict of laws principles that would cause the application of laws
of any other jurisdiction.
10.11 CONSENT TO JURISDICTION AND VENUE. All judicial proceedings
arising in or under or related to this Agreement, the Note(s), any of the other
Loan Documents or Warrant Agreement(s) may be brought in any state or federal
court of competent jurisdiction located in the State of Illinois. By execution
and delivery of this Agreement, each party hereto generally and unconditionally:
(a) consents to personal jurisdiction in Xxxx County, State of Illinois; (b)
waives any objection as to jurisdiction or venue in Xxxx County, State of
Illinois; (c) agrees not to assert any defense based on lack of jurisdiction or
venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement, the Note(s), the
other Loan Documents or Warrant Agreement(s). Service of process on any party
hereto in any action arising out of or relating to this agreement shall be
effective if given in accordance with the requirements for notice set forth in
Section 10.3, above and shall be deemed effective and received as set forth in
Section 10.3, above. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of either party to
bring proceedings in the courts of any other jurisdiction.
10.12 MUTUAL WAIVER OF JURY TRIAL. Because disputes arising in
connection with complex financial transactions are most quickly and economically
resolved by an experienced and expert person and the parties wish applicable
state and federal laws to apply (rather than arbitration rules), the parties
desire that their disputes be resolved by a judge applying such applicable laws.
EACH OF BORROWER AND LENDER SPECIFICALLY WAI'VES ANY RIGHT IT MAY HAVE TO TRIAL
BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY
CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, "CLAIMS") ASSERTED BY BORROWER AGAINST
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LENDER OR ITS ASSIGNEE AND/OR BY LENDER OR ITS ASSIGNEE AGAINST BORROWER. This
waiver extends to all such Claims, including, without limitation, Claims which
involve persons or entities other than Borrower and Lender; Claims which arise
out of or are in any way connected to the relationship between Borrower and
Lender; and any Claims for damages, breach of contract arising out of this
Agreement, any other Loan Document or any of the Excluded Agreements, specific
performance, or any equitable or legal relief of any kind.
10.13 CONFIDENTIALITY. Lender acknowledges that certain items of
Collateral, including, but not limited to customer lists, certain General
Intangibles and any Financial Statements provided pursuant to Section 6 hereof,
constitute proprietary and confidential information of the Borrower (the
"Confidential Information"). Accordingly, Lender agrees that any Confidential
Information it may obtain in the course of acquiring, perfecting or foreclosing
on the Collateral or otherwise provided under this Agreement, provided such
Confidential Information is marked as confidential by Borrower at the time of
disclosure, or if oral information, which is confirmed in writing and marked as
confidential within thirty (30) days following disclosure, shall be received in
the strictest confidence and will not be disclosed to any other person or entity
in any manner whatsoever, in whole or in part, without the prior written consent
of the Borrower, unless and until Lender has acquired indefeasible title
thereto.
10.14 COUNTERPARTS. This Agreement and any amendments, waivers, consents
or supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Borrower and the Lender have duly executed and
delivered this Agreement as of the day and year first above written.
BORROWER: QUOKKA SPORTS, INC.
Signature: /s/ XXX XXXXXXX
-----------------------
Print Name: Xxx Xxxxxxx
----------------------
Title: SVP & CFO
---------------------------
Accepted in Rosemont, Illinois:
LENDER: COMDISCO, INC.
Signature: /s/ XXXXX X. XXXX
-----------------------
Print Name: Xxxxx X. Xxxx
----------------------
Title: President
---------------------------
Comdisco Ventures Division
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EXHIBIT A
SUBORDINATED PROMISSORY NOTE
$_____________ Date:
Due:
FOR VALUE RECEIVED, Quokka Sports, Inc., a Delaware corporation (the "Borrower")
hereby promises to pay to the order of Comdisco, Inc., a Delaware corporation
(the "Lender") at X.X. Xxx 00000, Xxxxxxx, XX 00000 or such other place of
payment as the holder of this Secured Promissory Note (this "Note") may specify
from time to time in writing, in lawful money of the United States of America,
the principal amount of ___________ and 00/100 Dollars ($________________). The
principal amount shall accrue interest at the rate of twelve and one quarter
percent (12.25%) per annum from the date of this Note and no payment of interest
or principal shall be due until the earliest of (i) the effective date of an
initial public offering of the Borrower's securities; (ii) the effective date of
an acquisition or merger of Borrower in which more than fifty percent (50%) of
the voting power of the Borrower is transferred, excluding any merger effected
exclusively to change the domicile of Borrower; or (iii) February 1, 2000. Upon
the occurrence of the earliest of the foregoing events, unless prepaid in
accordance with the terms of Section 2.2 of the Loan Agreement, the principal
and accrued interest due hereunder shall be payable in equal monthly
installments of principal and interest commencing on the first day of the month
immediately following such event and on the same day of each month thereafter to
and including thirty-six (36) months after the date of this Note, such
installments to be applied first to accrued and unpaid interest and the balance
to be unpaid principal. Interest shall be computed on the basis of a year
consisting of twelve months of thirty days each.
This Note is one of the Note(s) referred to in, and is executed and delivered in
connection with, that certain Subordinated Loan and Security Agreement of even
date herewith by and between Borrower and Lender (as the same may from time to
time be amended, modified or supplemented in accordance with its terms, the
"Loan Agreement"), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to
which reference is made for a statement of all of the terms and conditions
thereof. All terms defined in the Loan Agreement shall have the same definitions
when used herein, unless otherwise defined herein.
THIS NOTE IS EXPRESSLY SUBJECT TO THE TERMS OF CERTAIN SUBORDINATION
AGREEMENT(S) BY AND BETWEEN LENDER AND BORROWER FOR THE BENEFIT OF SENIOR
CREDITOR AND BETWEEN LENDER AND SENIOR CREDITOR. IN THE EVENT OF ANY
CONTRADICTION OR INCONSISTENCY BETWEEN THIS NOTE AND ANY SUBORDINATION
AGREEMENT(S), THE TERMS OF THE SUBORDINATION AGREEMENT(S) SHALL CONTROL.
The Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest and any other notice as permitted under the UCC or
any applicable law.
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This Note has been negotiated and delivered to Lender and is payable in
the State of Illinois, and shall not become effective until accepted by Lender
in the State of Illinois. This Note shall be governed by and construed and
enforced in accordance with, the laws of the State of Illinois, excluding any
conflicts of law rules or principles that would cause the application of the
laws of any other jurisdiction.
BORROWER: QUOKKA SPORTS, INC.
000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Signature:______________________
Print Name:_____________________
Title:__________________________
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EXHIBIT C
ADVANCE REQUEST
Date:________________
Name:____________________ ("Borrower")
Address:_________________
Borrower hereby requests from Comdisco, Inc. ("Lender") an Advance in the amount
of $_____________ on ____________, 1999 (the "Advance Date") under that
Subordinated Loan and Security Agreement between Borrower and Lender dated
February 12, 1999 (the "Agreement").
Please:
(a) Issue a check payable to Borrower _______________________
or
(b) Wire Funds to Borrower's account _______________________
Bank: _________________________________________________________
Address: ______________________________________________________
ABA Number: ___________________________________________________
Account Number: _______________________________________________
Account Name: _________________________________________________
Borrower hereby affirms that all Representations and Warranties of Borrower set
forth in Section 4 and all Conditions Precedent to Loan set forth in Section 7
of the Agreement remain true and correct as of the date hereof.
Executed this _ day of ___________ 1999 by:
BORROWER: QUOKKA SPORTS, INC.
By: ___________________________
Title: ________________________
Print: ________________________
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