THIS IS AN IMPORTANT DOCUMENT. YOU SHOULD TAKE INDEPENDENT LEGAL ADVICE BEFORE
SIGNING AND SIGN ONLY IF YOU WANT TO BE LEGALLY BOUND.
THIS LOAN AGREEMENT is made the 20th day of December, 2004
BETWEEN:
(1) FAIRBAIRN PRIVATE BANK (IOM) LIMITED of St Mary's Court, 20 Hill
Street, Douglas, Isle of Man IM1 1EU (the "Bank") of the first part;
and
(2) TM FILM DISTRIBUTION INC whose registered address is 1080 N. Delaware
Avenue, 8th Floor, Philadelphia, PA 19125, United States of America
(the "Customer") of the second part.
WHEREAS:
The Customer has requested and the Bank has agreed to make available to the
Customer a loan facility upon the terms and subject to the conditions set out
below for the purpose of enabling the Customer to participate in a film
partnership investment.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS
In this Agreement unless the context otherwise requires the following words and
expressions shall bear the following meanings:
"Advance" means an advance made or to be made by the Bank to the
Customer under this Agreement or, as the context may require,
the principal amount thereof from time to time outstanding;
"Business Day" means a day on which banks in the Isle of Man are open
for business and for the avoidance of doubt shall not include
Saturdays, Sundays, bank and public holidays;
"Commitment Expiry Date" means the period commencing on the date of
this Agreement and ending on 3 February 2005;
"Drawdown Date" means, in relation to any Advance, the date on which
the Advance is made;
"Event of Default" means any one of the events specified in Clause 12
hereof;
"Facility" means the term loan facility the terms and conditions of
which are set out herein;
"Interest Payment Date" means the last day of each Interest Period;
"Interest Period" means each period for the calculation of interest
determined in accordance with Clause 5(3) hereof;
"Loan" means the aggregate principal amount for the time being
advanced and outstanding hereunder;
"Notice of Drawing" means a notice in writing addressed to the Bank
from the Customer pursuant to Clause 4(1)(c hereof giving
notice of a drawing of an Advance;
"Repayment Date" means 24 months after the final draw down of the Loan;
and
the "Security Agreement" has the meaning attributed to it in
Clause 8 hereof;
In this Agreement the singular shall include the plural and vice versa and the
masculine shall include the feminine and neuter genders and vice versa.
The headings are inserted for reference only and shall not affect the
construction of the terms hereof.
2. NATURE OF FACILITY, AMOUNT AND PURPOSE
(1) The Bank agrees to make the Facility available to the Customer
on the terms set out in this Agreement.
(2) The maximum aggregate principal amount of the Facility is
(pound)1,628,055
(3) The proceeds of the Facility will be used by the Customer to
pay expenses and costs associated with the structuring of
Keydata Media & Marketing Partnership 1 LLP.
3. CONDITIONS PRECEDENT
No Advance may be drawn hereunder unless at the relevant time the Bank is
satisfied that:
(1) it has received in form satisfactory to it this Agreement and
the Security Agreement duly executed by the Customer;
(2) it has received from the Customer certified copies of its
certificate of incorporation and memorandum and articles of
association (or other constitutional and incorporation
documents) and of each member's, board or other resolution or
consent required in connection with its execution of this
Agreement and the Security Agreement;
(3) the provisions of this Agreement and the Security Agreement
have been complied with and will continue to be complied with
following any such drawing;
(4) in the case of each Advance, it has received from the Customer
a notice of drawing specifying the proposed amount thereof;
(5) all commissions, fees and expenses due hereunder have been
paid;
(6) the representations and warranties contained in this Agreement
are true and correct; and
(7) all requisite governmental and other consents and approvals
have been obtained and all information required by the Bank
has been produced and the Bank is satisfied therewith.
4. DRAWINGS
(1) Subject to:
(a) all conditions precedent referred to in Clause 3
having, in the opinion of the Bank, been met; and
(b) no Event of Default having occurred and no event
having occurred which with the giving of notice
and/or the lapse of time and/or upon the Bank making
the relevant determination would constitute an Event
of Default; and
(c) the Bank having received from the Customer a Notice
of Drawing relating to each proposed Advance not
later than the close of business on the third
Business Day before the proposed Drawdown Date of
such Advance; and
(d) the representations and warranties set out in Clause
9 hereof being true and accurate as of the date of
the relevant Notice of Drawing;
the Customer may (subject to the provisions of this Agreement) on any
Business Day prior to the Commitment Expiry Date draw Advances which
together aggregate to or do not exceed the amount of the Facility;
PROVIDED THAT (i) the amount of each Advance hereunder shall not be
less than (pound)100,000 (One Hundred Thousand Pounds Sterling)
(2) The Customer hereby serves a Notice of Drawing for an advance
in the amount of (pound)1,350,000 the Drawdown Date of which
shall, subject to the other provisions of this Agreement, be
two (2) Business Days from the date hereof.
5. INTEREST
(1) DETERMINATION OF RATE
Interest will be calculated and payable in respect of each Advance in
respect of each Interest Period relating to such Advance at the
aggregate of (a) LIBOR (determined as described below) plus (b) 0.375
per cent per annum (the "Standard Interest Rate"). For the purposes
hereof, LIBOR shall be such rate as shall be determined by the Bank in
its absolute discretion for the relevant Interest Period and the
relevant currency and amount either (a) by reference to the relevant
Reuters page at or about 11.00 a.m. (London time) on the Drawdown Date
of the relevant Advance or, if, in the Bank's opinion, no such rate can
be ascertained from the Reuters service at the relevant time, (b) as
being the rate offered to the Bank by any leading bank in the London
inter-bank market for deposits in such currency and amount and for such
period as at 11.00 a.m. (London time) on the Drawdown Date of the
relevant Advance. Each such determination of a rate hereunder shall be
notified promptly by the Bank to the Borrower.
(2) PAYMENT OF INTEREST
Interest shall be due and payable on each Advance in respect of each
Interest Period relating to such Advance on each Interest Payment Date
relating to such Advance. The Customer will on the date of this
Agreement pay to the Bank a sum equal to the rate of 0.375 per cent per
annum of the aggregate principal amount of the Facility which will be
an advance payment of part of the Standard Interest Rate and the
Customer hereby irrevocably instructs and authorises the Bank to set
off the LIBOR element of the Standard Interest Rate against any
interest due and payable to the Customer by the Bank in relation to the
balance from time to time on the account detailed in Clause 8(1).
(3) INTEREST PERIODS
(a) Subject to sub-paragraph (b) below, the Interest
Period for any Advance shall be 3 months (or such
other period as may be agreed between the Customer
and the Bank).
(b) For the purpose of determining the duration of any
Interest Period:
(i) the first Interest Period in respect of the
first Advance made hereunder will commence
on the Drawdown Date of that Advance and
each subsequent Interest Period in respect
of that Advance will commence immediately on
the expiry of the previous Interest Period;
(ii) the first Interest Period of the second or
any subsequent Advance shall end at the same
time as the existing Interest Period
relating to the Loan to ensure consolidation
of Interest Periods; and
(iii) if any Interest Period could otherwise
overrun the Repayment Date that Interest
Period will end on the Repayment Date.
(4) DEFAULT INTEREST
In the event of any failure by the Customer to pay on the due date for
payment any sum due pursuant to this Agreement, the Customer shall, on
demand by the Bank, pay interest on such sum for the period from the
due date for such payment until actual payment (as well after as before
judgment) at a rate equal to the aggregate of (a) the Standard Interest
Rate as such is calculated in respect of successive Interest Periods
from time to time in accordance with Clause 5(1) above plus (b) 4 per
cent per annum or, in respect of amounts outstanding following the
Repayment Date, at a rate equal to the aggregate of (a) the Base Rate
of the Bank (or its successors in business from time to time) in the
currency of the Loan from time to time plus (b) 4 per cent per annum.
(5) ADDITIONAL COSTS
The Customer undertakes to pay or reimburse to the Bank, on demand, as
additional interest, the cost to the Bank for the time being (as
determined by the Bank in its sole discretion) of complying with any
reserve, special deposit or any other requirement of any applicable
regulatory authority affecting transactions hereunder.
(6) CURRENCY OF PAYMENT
Payment of interest shall be made in the currency of the Loan.
6. REPAYMENT
The Loan will be repaid by the Customer in full on the Repayment Date.
7. PREPAYMENT AND CANCELLATION
(1) The Customer may prepay the whole or part of any Advance or
Advances on the last day of any Interest Period (provided that
each prepayment of Advance or Advances shall not be in respect
of an amount of less than 25% of the Loan) together with
interest on the amount prepaid accrued to the date of
prepayment provided that the Bank shall have received from the
Customer not less than 30 days' prior irrevocable notice
specifying the amount to be prepaid and the date of the
prepayment. The notice may specify the Advance or Advances in
respect of which any prepayment is made, failing which
prepayments shall be applied against the Advance or Advances
selected by the Bank at its absolute discretion.
(2) If an Advance or Advances are prepaid in whole or in part the
Customer shall pay to the Bank a prepayment fee equivalent to
3 months interest on the amount prepaid.
(3) No amount prepaid whether under paragraph (1) of this clause
or otherwise may be redrawn.
(4) The Customer may by giving the Bank not less than 30 days'
prior irrevocable written notice at any time before the
Commitment Expiry Date cancel the whole or any part (such part
being not less than (pound)100,000 (One Hundred Thousand
Pounds Sterling).
8. SECURITY
Repayment of the Loan and all amounts due under and in respect of the Facility,
including interest and all other liabilities connected with the facility, shall
be secured solely by a Deed of Charge Over Cash agreement between the "Customer"
and the "Bank" dated on even date herewith (hereinafter referred to as the
"Security Agreement") pursuant to which the Customer will create in favour of
the Bank a security interest in such of the following property as shall be
agreed between the Bank and the Customer (the relevant property being referred
to below as the "Collateral"):
(1) the following bank accounts:
(a) Fairbairn Private Bank (IOM) Limited Account number
509696;
9. REPRESENTATIONS AND WARRANTIES
(1) The Customer represents and warrants to the Bank:
(a) the Customer is duly incorporated under the laws of
the jurisdiction in which it is incorporated, with
full power and authority to conduct its activities
and to enter into this Agreement and the Security
Agreement;
(b) the Customer has taken all such corporate action as
may be required to authorise it to enter into and
perform this Agreement and the Security Agreement;
(c) the obligations of the Customer hereunder and under
the Security Agreement constitute the Customer's
legal, valid, binding and enforceable obligations and
performance of such obligations will not contravene
any provision of the Customer's constitutional
documents binding on the Customer;
(d) the Customer has not been declared bankrupt or
suffered or committed any act indicative of
insolvency by the law of any jurisdiction;
(e) the Customer has received such information and taken
such advice as it requires in connection with the
execution of this Agreement and the Security
Agreement;
(f) no litigation or other proceedings which would have a
material adverse effect on the ability of the
Customer to perform its obligations hereunder or
under the Security Agreement has, or at the time of
any Drawing, shall have, been started or (to the best
of the Customer's knowledge and belief) threatened;
(g) all appropriate consents, licences, authorisations
and permits for the execution, delivery and
performance of this Agreement and the Security
Agreement (including any exchange control
permissions) have been obtained and shall, at the
time of each such Drawing, be in full force and
effect;
(h) full disclosure has been made to the Bank prior to
the date of this Agreement of all facts in relation
to the Customer's business and affairs as are
material and ought properly to be made known to any
person proposing to make financial facilities
available to the Customer and in furtherance thereof
the Bank has received a copy of the Keydata Media &
Marketing Partnership 1 LLP Information Memorandum
and related documents;
(i) subject only to any security interest or interests
created pursuant to the Security Agreement, the
Customer is and will remain the sole absolute and
beneficial owner of the Collateral;
(j) other than as provided in the Security Agreement
there are no security interests, charges, liens,
rights of set off or other encumbrances affecting the
Collateral.
(2) The representations and warranties in Clause 9(1) will be
deemed to be repeated by the Customer on and as of each
Drawdown Date and each Interest Payment Date as if made with
reference to the facts and circumstances existing at such
respective date.
10. UNDERTAKINGS
The Customer will:
(1) give the Bank notice in writing immediately upon becoming
aware of the occurrence of any Event of Default or other event
which with the giving of notice and/or lapse of time and/or
upon the Bank making the relevant determination would
constitute an Event of Default;
(2) provide the Bank promptly with any information relating to the
Customer as the Bank may from time to time reasonably require;
11. OTHER CONDITIONS
The availability of the Facility is at all times subject to the Bank's
compliance in such manner as the Bank thinks fit with any and all restrictions,
rules and regulations of any applicable regulatory authority from time to time
in force.
12. EVENTS OF DEFAULT
(1) The occurrence of any of the following shall constitute an
Event of Default:
(a) the failure of the Customer to pay within seven days
of the due date any sum for the time being due to the
Bank by virtue of this Agreement, the Security
Agreement or otherwise;
(b) any breach by the Customer of any other provision of
this Agreement or of the Security Agreement;
(c) any representation, warranty, covenant or statement
in connection herewith or with the Security Agreement
made by the Customer or any agent of the Customer
being or becoming incorrect or being breached in any
material respect;
(d) the failure of the Customer to disclose any matter
which in the opinion of the Bank is material to this
Agreement, the Security Agreement or the Collateral;
(e) the indication by the Customer of any intention not
to pay any sum when it falls due by virtue of this
Agreement, the Security Agreement or otherwise;
(f) the Customer becoming bankrupt or suffering or
committing any act indicative of bankruptcy or
insolvency by the law of any jurisdiction;
(g) any distress or execution or other legal process
being levied or enforced upon any property of the
Customer in any part of the world.
(2) No further Advance may be drawn after the occurrence of an
Event of Default and the Bank shall be entitled (but not
obliged) at any time after the occurrence of an Event of
Default by notice in writing to the Customer to declare that
the Loan and all interest and all other sums payable pursuant
to this Agreement or otherwise have become immediately due and
payable whereupon the same shall become immediately due and
payable and the Customer shall immediately pay the same to the
Bank.
(3) In the event that the Loan shall be declared immediately due
and payable pursuant to paragraph (2) of this clause the
Customer will reimburse the Bank for all losses and expenses
(including loss of profit) incurred by the Bank in consequence
of the Event of Default and/or of the acceleration of the Loan
including those incurred in liquidating or employing deposits
from third parties acquired to effect or maintain the Loan or
any part of it. The certificate of the Bank as to the amount
of such losses and expenses shall in the absence of manifest
error be conclusive.
13. PAYMENTS
(1) All payments to be made under this Agreement shall be made in
the currency of the Loan in immediately available funds during
normal banking hours. If any sum falls due for payment under
this Agreement on a day which is not a Business Day it shall
be made on the next succeeding Business Day.
(2) All payments to be made by the Customer under this Agreement
shall be made to the Bank at Fairbairn Private Bank (IOM)
Limited, St Mary's court, 20 Hill Street, Douglas, Isle of Man
IM1 1EU (or at such other office as the Bank may notify to the
Customer from time to time). All payments to be made to the
Customer under this Agreement shall be made to the account of
the Customer with the Bank at Fairbairn Private Bank (IOM)
Limited, St Mary's Court, 20 Hill Street, Douglas, Isle of Man
IM1 1EU.
(3) All sums payable by the Customer hereunder shall be paid in
full without any set-off or counterclaim and free and clear of
and without any deduction or withholding whatsoever (save to
the extent any such deduction or withholding is required by
law). If the Customer is at any time required by law to make
any deduction or withholding from any payment to the Bank, the
Customer will immediately pay to the Bank such additional
amounts as will result in the Bank receiving the full amount
it would have received had no such deduction or withholding
been required. In such event the Customer will also provide to
the Bank a certificate of deduction or withholding in respect
of the payment, together with evidence satisfactory to the
Bank that the amount so deducted or withheld has been paid
over to the relevant authority when due.
14. ARRANGEMENT FEE AND EXPENSES
(1) The Customer shall pay to the Bank an arrangement fee of
(pound)1,687.50.
(2) The Customer will reimburse the Bank on demand for all
expenses (including legal expenses including the cost of the
provision of legal opinions where appropriate, and all other
professional or other fees or expenses) incurred by the Bank
in connection with the negotiation preparation and execution
of this Agreement and will reimburse the Bank on demand for
all expenses (including legal expenses) incurred by the Bank
in suing for or recovering any sum due to the Bank under this
Agreement or otherwise in protecting or enforcing its rights
under this Agreement.
15. EUROPEAN MONETARY UNION
If, as a result of the implementation of European economic and monetary union:
(1) any currency (the "affected currency") in which Advances are
permitted to be made hereunder or in which amounts outstanding
hereunder are denominated either (1) ceases to be the lawful
currency of the relevant country and is replaced as such by a
single European currency or (2) is recognised as such
country's lawful currency at the same time as such single
European currency is so recognised:
(a) no further Advances may be drawn hereunder in the
affected currency shall be permitted but, without
prejudice to any other terms of this Agreement,
further Advances hereunder may be drawn in the single
European currency in an amount equivalent to the
amount which would have been so available in the
affected currency, determined by reference to the
Official Exchange Rate;
(b) each obligation hereunder to pay an amount in the
affected currency shall be deemed to be an obligation
to pay an amount in the single European currency,
determined by reference to the Official Exchange
Rate; and
(c) the "Official Exchange Rate" for such purposes shall
mean the rate of exchange recognised by the European
Central Bank for the conversion of the affected
currency into the single European currency in
connection with the implementation of European
economic and monetary union;
(2) LIBOR ceases to be readily ascertainable or, in the opinion of
the Bank, ceases to be an appropriate reference rate from
which to determine the interest rate(s) applicable to amounts
outstanding or to be drawn hereunder, then such interest
rate(s) shall be determined upon such basis (whether by
reference to a published market rate or otherwise) as the Bank
shall reasonably specify; and
(3) the parties shall mutually agree to such amendments to this
Agreement as shall, in the opinion of the Bank, be necessary
in order to reflect such changes provided that, subject to the
provisions of this paragraph 15 this Agreement shall continue
in full force and effect, unamended.
16. NOTICES
(1) Any notice or other document required or authorised hereby may
be served on the parties hereto at the following addresses and
facsimile numbers and upon the persons specified:
(a) for the Bank:
Address: St Mary's Court,
20 Hill Street,
Douglas,
Isle of Man
IM1 1EU
Fax number: 01624 627218
Attention: Senior Lending Executive
(b) for the Customer:
Address: 1080 N. Delaware, 8th Floor
Philadelphia, PA 19125
USA
(2) Any such notice or other document shall be deemed to be duly
served:
(a) if delivered by hand at the time of delivery;
(b) if sent by post at noon on the next Business Day
following the day of posting and shall be effective
even if misdelivered or returned undelivered;
(c) if given or made by facsimile at the time of
transmission;
provided that where delivery or transmission occurs after 6.00 p.m. on
a Business Day or occurs on a day which is not a Business Day service
shall be deemed to occur at 9.00 a.m. on the next Business Day.
17. ASSIGNMENT
(1) The Customer may not assign or transfer any of its rights or
obligations under this Agreement.
(2) The Bank may, at its absolute discretion and without reference
to the Customer, assign all or any part of its obligations
hereunder (or under any related documents including, without
prejudice to the generality of the foregoing, the Security
Agreement). The Customer shall enter into all documents
specified by the Bank as being necessary to give effect to any
such assignment or transfer.
18. WAIVERS: REMEDIES CUMULATIVE
No failure or delay by the Bank in exercising any right power or privilege under
this Agreement shall impair the same or operate as a waiver of the same nor
shall any single or partial exercise of any right power or privilege preclude
any further exercise of the same or the exercise of any other right power or
privilege. The rights and remedies provided in this Agreement are cumulative and
not exclusive of any rights and remedies provided by law.
19. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with Isle of Man
law and the parties hereto submit to the non-exclusive jurisdiction of the
courts of the Isle of Man in connection herewith.
IN WITNESS WHEREOF the parties hereto have entered into this Agreement on the
date first above written.
SIGNED by David Corrin
duly authorised signatory for and on behalf
of FAIRBAIRN PRIVATE BANK (IOM) LIMITED
THE COMMON SEAL OF
TM FILM DISTRIBUTION INC
was hereunto affixed in the presence of
_______________________________
President
________________________________
Secretary
OR
SIGNED by .................President
duly authorised signatory for and on behalf
of TM FILM DISTRIBUTION INC
in the presence of: .................Secretary