EXHIBIT 10.33.1
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), is made as of ________, 2002,
by and between Probex Corp., a Delaware corporation (the "Company"), and
_________________, ___________________ (the "Lender").
WHEREAS, the Company desires to borrow from the Lender, and the Lender
desires to lend to the Company, the aggregate principal amount of up to
$________, such indebtedness to be evidenced by a promissory note in the form
attached hereto as Exhibit A (as amended, modified and restated from time to
time, the "Note").
NOW THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Lender and the Company hereby agree as
follow:
1. AGREEMENT TO LEND. Subject to the terms and conditions of this Agreement and
the Loan Documents (as defined below), the Lender agrees to lend to the Company
up to $___________ aggregate principal amount and the Company agrees to issue to
the Lender (payable to the order of the Lender or its nominee, if any) a Note
evidencing such obligation to the Lender on the Closing Date (as defined herein)
or the date of the accelerated Closing (as defined herein).
2. CLOSING. The closing (the "Closing") shall occur as soon as practicable after
the satisfaction or waiver of all conditions or obligations of Lender and the
Company set forth in Sections 3.1 and 3.2 hereof, including the EPC Condition
(as defined in Section 3.2 hereof), on a date (the "Closing Date") determined by
Lender upon prior notice to the Company, provided that in any event, without
prior notice, the Closing Date shall be the third business day following receipt
by the Lender of notice from the Company of the satisfaction of the EPC
Condition. Notwithstanding the foregoing, the Lender may elect, at its option,
to accelerate the Closing Date to a date prior to the satisfaction of the EPC
Condition in accordance with the procedures, and for the consideration, set
forth in Section 4 hereof.
3. CONDITIONS TO CLOSING; CLOSING DELIVERY. The obligation of each of the
parties hereto to make the closing deliveries set forth in Sections 3.3 or 3.4,
respectively, shall be conditioned upon the simultaneous delivery of the closing
deliveries required to be made by the other party hereto pursuant to subsections
Sections 3.3 or 3.4, respectively.
3.1 Company's Conditions to Closing. The Company's obligation to sell
and issue the Note to the Lender is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion:
(a) Closing Deliveries. The Company shall have received all documents,
duly executed in a form reasonably satisfactory to the Company set forth in
Section 3.4 hereof.
(b) No Litigation. No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby that prohibits the consummation of any of the
transactions contemplated by the Loan Documents.
3.2 Lender's Conditions to Closing. The Lender's obligation to advance
the principal amount of the Note to the Company is subject to the fulfillment,
prior to or at the Closing, of the following conditions:
(a) Representation and Warranties. The representations and warranties
of the Company in this Agreement shall be true and correct when made and at the
time of such Closing.
(b) EPC Agreement. An engineering, procurement and construction
contract for the purpose of constructing the Company's initial reprocessing
facility shall have been fully-executed by all the parties thereto (the "EPC
Condition").
(c) Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement and
required to be performed or complied with by it prior to or at such Closing,
unless waived by the Lender, and after giving effect to the issuance of the
Note, no Event of Default (as defined in the Note) shall have occurred and be
continuing.
(d) Consent of Other Lenders. Any consents or approvals required to be
obtained from any lender or holder of any outstanding debt for borrowed money of
the Company and any amendments and agreements pursuant to which any debt for
borrowed money may have been incurred by the Company and any other consents,
which shall be necessary to permit the consummation of the transaction
contemplated hereby shall have been obtained.
(e) Closing Deliveries. Lender shall have received all documents, duly
executed in form reasonably satisfactory to the Lender set forth in Section 3.3
hereof.
(f) No Litigation. No litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby that prohibits the consummation of any of the
transactions contemplated by the Loan Documents.
(g) Finance Committee. The Board of Directors of the Company shall have
formed a committee of the Board of Directors to comply with and perform the
provisions set forth in Section 8 hereof and appointed at least three members of
the Company's Board of Directors to serve thereon.
3.3 Closing Deliveries of the Company. At the Closing, the Company
shall deliver to the Lender the following, all of which shall be in form and
content satisfactory to the Lender and their counsel:
(a) Note. The Note made payable to the Lender and in the maximum
aggregate principal amount of $_______.
(b) Intercreditor and Security Agreement. The Intercreditor and
Security Agreement, duly executed and delivered by the Company, in substantially
the form set forth in Exhibit B attached hereto (the "Security Agreement", and
together with the Notes, collectively, the "Loan Documents").
(c) Evidence of Filing of Financing Statements. Evidence of filing of
Uniform Commercial Code financing statements with respect to the collateral that
is the subject of the Security Agreement.
(d) Evidence of Maturity Date Extensions. The Company shall have
delivered to Lender copies of that certain term sheet executed by each holder of
the Company's outstanding notes pursuant to which the holders' of such notes
agreed to extend the maturity date of such notes until the earlier of Qualified
Financing or February 28, 2003.
3.4 Closing Deliveries of the Lender. At the Closing, the Lender shall
deliver the following, all of which shall be in form and substance reasonably
satisfactory to the Company:
(a) Advancement of Loan Amount. The balance of the principal amount of
the Note, or portion thereof if under an Accelerated Closing, to the Company by
wire transfer in immediately available funds in accordance with instruction set
forth in Exhibit D attached hereto.
(b) Security Agreement. The Security Agreement duly executed by Lender.
4. ACCELERATED CLOSING.
4.1 Accelerated Funding Schedule. Lender may elect, at its option, to
accelerate the Closing Date to a date prior to the satisfaction of the EPC
Condition. If Lender so elects, Lender shall deliver notice to the Company,
stating its election to complete the Closing prior to the satisfaction of the
EPC Condition and specifying the Closing Date, which shall become the Closing
Date for all purposes hereunder. Within one (1) business day following the
Company's receipt of Lender's election to accelerate the Closing Date, Lender
shall deposit in the Company Account (as defined herein) $_____, and the Company
shall be permitted, subject to Section 8 hereof, to draw on the unadvanced
principal amount of the Note in the maximum amounts as follows:
(a) $______ thirty (30) days after the accelerated Closing Date;
(b) $______ sixty (60) days after the accelerated Closing Date;
and
(c) $______ ninety (90) days after the accelerated Closing Date.
4.2 Issuance of Warrants. The parties hereto hereby acknowledge that a
warrant to purchase _________ shares of the Company's common stock dated as of
_______ has issued by the Company to the Lender, in connection with the
execution of a term sheet. If the accelerated Closing Date as specified by
Lender is on or before _______, 2002, the Company shall issue to the Lender, for
no additional cash consideration, but as consideration for the additional risks
assumed by the Lender for such accelerated Closing, a warrant to purchase
________ shares of the Company's common stock (the "First Conditional Warrant").
Further, if the accelerated Closing is consummated and the EPC Condition shall
not have been satisfied on or prior to April 30, 2002, the Company shall issue
to the Lender, for no additional cash consideration, but as consideration for
the additional risks assumed by the Lender for such accelerated Closing, a
warrant to purchase ________ shares of the Company's common stock (the "Second
Conditional Warrant", and together with the First Conditional Warrant,
collectively, the "Warrants"). The Warrants agreements shall have the exercise
price, shall be for the term, and shall otherwise be in substantially the form,
set forth in Exhibit C attached hereto. The number of shares issuable upon
exercise of the Warrants shall be appropriately adjusted to reflect any stock
split, stock dividend, combinations, recapitalizations or other such adjustment
to the Company's common stock occurring subsequent to the date hereof and prior
to their respective issuance. All issuances of the Warrants pursuant to this
Section 4.2 shall be subject to any stockholder approvals required pursuant to
Section 3.20 of the Security Agreement.
5. REPRESENTATION AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to the Lender that the following will be true and correct at the
Closing or accelerated Closing, as if made on that date:
(a) The representations and warranties made by the Company in the
Security Agreement are as fully a part of this Agreement as if set forth herein
in full.
(b) The Company further represents and warrants to the Lender that:
(i) The Note is duly authorized and, when issued, will
constitute a valid and binding obligation of the Company, enforceable
against the Company, in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity and except as rights
to indemnification and contribution under the Note as may be limited
under applicable law; and
(ii) Subject to any required stockholder approvals pursuant to
Section 3.20 of the Security Agreement, the shares of the Company's
common stock issuable upon conversion of the Note (the "Conversion
Shares"), when issued, will be duly authorized, validly issued,
fully-paid and nonassessable.
6. REPRESENTATIONS AND WARRANTIES OF LENDER. Lender hereby represents and
warrants to the Company that:
6.1 Lender has all requisite power and authority to execute and deliver
this Agreement and the other agreements and instruments contemplated herein to
which it is a party and to carry out the transactions contemplated by this
Agreement and the other agreements and instruments contemplated herein to which
it is a party.
6.2 The execution of this Agreement and the documents executed by the
Lender pursuant to this Agreement have been duly authorized by all necessary
actions on the part of the Lender, have been executed and delivered, and
constitute valid, legal, binding and enforceable agreements of the Lender,
except as may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application relating
to or affecting the enforcement of creditor rights, (b) laws and judicial
decisions regarding indemnification for violations of federal securities laws,
(c) the availability of specific performance or other equitable remedies, and
(d) with respect to any indemnification agreements set forth herein or therein,
principles of public policy.
6.3 Lender is aware that an investment in the Note, the Warrants and
any shares of the Company's common stock acquirable upon the conversion of the
Note and exercise of the Warrants (collectively, the "Securities"), is
speculative and involves a high degree of risk. Lender has carefully considered
the risks of this investment.
6.4 Lender has such knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of investing in the
Securities and of protecting its interest in connection with this investment.
6.5 Lender is purchasing the Securities for its own account, or for one
or more separate accounts maintained by it for the account of one or more
pension, trust or other funds, for investment purposes only, and not with a view
to the resale or distribution of any of the Securities. Lender understands that
it must bear the economic risk of the investment for an indefinite period of
time because the sale and issuance of the Securities by the Company to the
Lender has not been registered under the Securities Act of 1933, as amended (the
"Act"), pursuant to an exemption from registration under Regulation D
promulgated under the Act or such other available exemptions thereto, nor under
any applicable state securities laws, and the Securities may not be sold or
transferred by the Lender in the absence of evidence satisfactory to the Company
of compliance with applicable laws, which evidence may include an opinion of
counsel satisfactory to the Company that, among other things, the Securities
have been registered under the Act and all applicable state securities laws or
that such registrations are not required.
6.6 Lender represents that it is an "accredited investor" within the
meaning of Rule 501 of Regulation D, as presently in effect, as promulgated
under the Act.
6.7 Based upon the information provided to the Lender, no approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any governmental authority or any other individual, corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, government (or an agency or political subdivision thereof)
or other entity of any kind is necessary or required in connection with the
execution, delivery and performance by the Lender of this Agreement, or any
other documents executed pursuant to this Agreement, except for federal and
state securities filings, if any.
7. REGISTRATION RIGHTS. Subject to any stockholder approvals required pursuant
to Section 3.20 of the Security Agreement, within sixty (60) days after
completion of project financing, whether in the form debt or equity securities
of the Company, aggregating at least $30 million to be used to finance the
construction of the Company's first reprocessing facility, excluding the
outstanding principal balance and interest due under the Note on the date
thereof (the "Qualified Equity Financing"), the Company shall file with the U.S.
Securities and Exchange Commission ("SEC") and thereafter use commercially
reasonable efforts to become effective, a registration statement under Rule 415
of the Act, or any similar rule that may be adopted by the SEC, covering the
resale of the shares of Common Stock issuable upon conversion of the Note and
exercise of the Warrants (the "Registration Statement"). The Company may include
in such Registration Statement other securities of the Company to be resold by
holders other than Lender. Except as set forth above, the rights and obligations
of Lender with respect to the registration of shares of the Company's common
stock issuable to the Lender upon conversion of the Note and exercise of the
Warrants shall be as set forth in that certain Registration Rights Agreement,
dated as of September 7, 2001, by and among the Company and the parties thereto
(the "Registration Rights Agreement"), the terms of which are hereby
incorporated by reference herein. To the extent any of the terms of the
Registration Rights Agreement shall be in conflict with the terms of this
Agreement, the terms of this Agreement shall control.
8. USE OF PROCEEDS.
8.1 Appointment. At the Closing hereunder, whether a regular Closing or
an accelerated Closing, three members of the Board of Directors of the Company
shall be appointed by the Company, subject to Lender's approval, to constitute a
committee (the "Finance Committee") for the purposes set forth herein, and the
Finance Committee hereby accepts such appointment under the terms and conditions
set forth herein. The initial members of the Finance Committee will be Xxx
Xxxxx, Xxxxxxx Xxxxxxx and Xxxxxx Xxxx.
8.2 Action. The Finance Committee shall take action by majority vote of
the members thereof.
8.3 Corporate Account. Upon the Closing, or upon any draw approved by
the Finance Committee pursuant to Section 8.04 under the accelerated Closing set
forth in Section 4.1 hereof, the Lender shall deposit the loan proceeds into the
Company's corporate bank account (the "Company Account").
8.4. Use of Proceeds. The Finance Committee shall approve the
expenditure of funds contained in the Company Account (other than funds
previously advanced under the Note prior to the date hereof and, if applicable,
the $_____ million advanced by Lender under the Note in connection with its
election for an accelerated Closing under Section 4.01 hereof), or, upon an
accelerated Closing, draws on the unadvanced principal amount of the Note as set
forth in subsections (a), (b) and (c) of Section 4.1 hereof, as follows:
(a) On a monthly basis, the President or Chief Financial Officer
of the Company shall review with the Finance Committee the
amount of funds required and the proposed use of such funds
for the next month. Such proposed use of funds shall be set
forth in sufficient detail to allow the Finance Committee to
determine the reasonableness of the proposed use.
(b) If the Finance Committee shall determine that such proposed
use and amount of funds is reasonable, the Chairman of the
Finance Committee shall so notify Lender of its approval and
the amount of approved funds to be drawn pursuant to Section
4.1 hereof.
(c) The Company will be permitted to use the funds deposited by
Lender in the Company Account for the uses approved by the
Finance Committee pursuant subsection (b) of this Section 8.4.
(d) Upon request by Lender, the Company shall provide Lender the
materials provided to the Finance Committee in Section 8.4(a)
hereof.
8.5 Upon the closing of the Qualified Equity Financing , this Section 8
shall terminate and the Finance Committee may, in the sole discretion of the
Board of Directors of the Company, be dissolved.
8.6 The parties hereby acknowledge and agree that any and all action
taken or omitted by the members of the Finance Committee shall for all purposes
be deemed to have been taken or omitted in their roles as directors of the
Company. Nothing contained herein shall limit the members of the Finance
Committee to be indemnified or seek indemnification as directors of the Company
for any all action taken or omitted.
9. FUTURE LOANS. The Company hereby agrees that it shall incur no indebtedness
for borrowed money, nor shall it permit any person to become a party to the
Security Agreement and a holder of New Obligations (as defined in the Security
Agreement), unless the material terms of any such indebtedness are made
available to Lender and such terms are no more favorable to the proposed lender
than the terms of the transactions contemplated by this Agreement, without the
prior written consent of the Lender.
10. Miscellaneous.
10.1 No Waiver; Cumulative Remedies. No failure on the part of the
Lenders or the Company to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
10.2 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lenders and the Company and their respective heirs,
personal representatives, successors and assigns, except that the Company may
not assign any of its rights or obligations under this Agreement without the
prior written consent of the Lenders.
10.3 Amendment; Entire Agreement. THIS AGREEMENT, INCLUDING THE
EXHIBITS AND SCHEDULES ATTACHED HERETO, EMBODIES THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
The provisions of this Agreement may be amended or waived only by an instrument
in writing signed by the parties hereto.
10.4 Governing Law; Severability. This Agreement shall be enforced,
governed by and construed in accordance with the laws of the State of Texas
applicable to agreements made and to be performed entirely within such State
excepting its choice of law rules. In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
hereof.
10.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
10.6 Headings. The headings, captions and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
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IN WITNESS WHEREOF, the Company and the Lender have caused this
Agreement to be duly executed as of the day and year first above written.
COMPANY:
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PROBEX CORP.,
a Delaware corporation
By: ____________________________
Name: ____________________________
Title:____________________________
LENDER:
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By:
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Name:
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Title:
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