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EXHIBIT 10.4
LOAN AGREEMENT
This Loan Agreement (the "AGREEMENT") is made and entered into by
and between the undersigned borrower (the "BORROWER") and the undersigned Lender
(the "LENDER") as of the date set forth on the last page of this Agreement.
ARTICLE I.
LOANS
1.1 SINGLE ADVANCE TERM LOAN. As of the date hereof, the Borrower has
obtained a term loan from the Lender in the original principal amount of Two
Million and no/100 Dollars ($2,000,000.00) (the "LOAN AMOUNT"). The term loan is
evidenced by a single Senior Convertible Note of the Borrower payable to the
order of the Lender in the Loan Amount and dated as of the date hereof (the
"NOTE"), and is being extended to finance the Borrower's acquisition of
popmail.com, inc., a Delaware corporation.
1.2 ADVANCE PROCEDURE. Subject to Section 1.4 hereof, the Lender shall
advance the proceeds of the Note to the Borrower pursuant to written wire
instructions provided by the Borrower to the Lender.
1.3 EXPENSES AND ATTORNEYS' FEES. The Borrower will reimburse the Lender
for all reasonable attorneys' fees and all other costs, fees and out-of-pocket
disbursements incurred by the Lender in connection with the preparation,
execution, delivery, administration, defense and enforcement of this Agreement
or any of the other Loan Documents (defined below), including fees and costs
related to any waivers or amendments with respect thereto. The Borrower will
also reimburse the Lender for all reasonable costs of collection before and
after judgment, and the costs of preservation and/or liquidation of any
collateral (including fees and disbursements of both inside and outside
counsel).
1.4 CONDITIONS TO BORROWING. The Lender shall not be obligated to make an
advance hereunder unless (i) the Lender has received executed copies of the Note
and all other documents or agreements applicable to the loan described herein,
including, but not limited to, the documents specified in Article III
(collectively with this Agreement the "LOAN DOCUMENTS"), in form and content
satisfactory to the Lender; (ii) the Lender has received copies of the
Borrower's Articles of Incorporation and By-Laws; and (iii) the Lender has
received a certified copy of a resolution or authorization in form and content
satisfactory to the Lender authorizing the loan and all acts contemplated by
this Agreement and all related documents.
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ARTICLE II.
WARRANTIES AND COVENANTS
During the term of this Agreement, and while any part of the credit
granted the Borrower under this Agreement or the other Loan Documents is
available or any obligations under any of the Loan Documents are unpaid or
outstanding, the Borrower warrants and continuously agrees as follows:
2.1 ACCURACY OF INFORMATION. All information, certificates or statements
given to the Lender pursuant to this Agreement and the other Loan Documents will
be true and complete in all material respects when given.
2.2 ORGANIZATION AND AUTHORITY; LITIGATION. If the Borrower is a
corporation or partnership, the Borrower is a validly existing corporation or
partnership (as applicable) in good standing under the laws of its state of
organization, and has all requisite power and authority, corporate or otherwise,
and possesses all licenses necessary, to conduct its business and own its
properties. The execution, delivery and performance of this Agreement and the
other Loan Documents (i) are within the Borrower's power; (ii) have been duly
authorized by proper corporate or partnership action (as applicable); (iii) do
not require the approval of any governmental agency; and (iv) will not violate
any law, agreement or restriction by which the Borrower is bound. This Agreement
and the other Loan Documents are the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their terms. As of
the date hereof, there is no litigation or administrative proceeding threatened
or pending against the Borrower which would, if adversely determined, have a
material adverse effect on the Borrower's financial condition or its property.
2.3 EXISTENCE; BUSINESS ACTIVITIES; ASSETS. The Borrower will (i)
preserve its corporate or partnership (as applicable) existence, rights and
franchises; (ii) not liquidate, dissolve, merge or consolidate with or into
another entity; and (iii) not sell, lease, transfer or otherwise dispose of all
or substantially all of its assets.
2.4 USE OF PROCEEDS. Advances by the Lender hereunder shall be used
exclusively by the Borrower for the purposes represented to the Lender in
Section 1.1 hereof.
2.5 COMPLIANCE WITH LAWS. The Borrower has materially complied with all
laws applicable to its business and its properties, and has all permits,
licenses and approvals required by such laws, copies of which have been provided
to the Lender.
2.6 FINANCIAL STATEMENTS AND REPORTING. Upon request of the Lender, the
Borrower shall provide to the Lender copies of any reports and financial
information reasonably requested by Lender and Lender agrees to keep all such
information confidential to the extent the Borrower has not publicly disclosed
such information by its reporting with the Securities and Exchange Commission or
otherwise.
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2.7 LIABILITIES. All taxes and other liabilities which are due from
Borrower have been paid in full and in a timely manner.
2.8 YEAR 2000.
(a) Borrower represents and warrants that all date-sensitive
hardware, software, processes, procedures, interfaces and operating systems and
core business functions (jointly referred to as the "Systems") used within the
Borrower's business operations contain or will contain acceptable design and
performance specifications so that such systems will not abruptly end or provide
invalid or incorrect results during the operation of Borrower's business on or
after January 1, 2000. All such Systems have been or will be designed to ensure
year 2000 compatibility on or before January 1, 2000, including, but not limited
to: date data century recognition, calculations that accommodate same century
and multi-century formulas and date values, date data interface values that
reflect the century, and which include year 2000 leap year calculations.
(b) Borrower represents and warrants that it will contact its
material suppliers to confirm that all date time and sensitive hardware,
software, processes, procedures, interfaces and operating systems used within
the suppliers' operations contain or that they intend that the same will contain
acceptable design and performance specification so that such Systems will not
abruptly and/or provide invalid or incorrect results during the operation of
their respective businesses on or after January 1, 2000 and that all such
Systems have been designed or that they intend them to be designed to ensure
Year 2000 compatibility including, but not limited to: date data century
recognition, calculations that accommodate same century and multi-century
formulas and date values, date data interface values that reflect the century
and which include Year 2000 leap year calculations.
2.9 WARRANTS. In consideration for the extension of the loan evidenced
by the Note, the Borrower agrees to issue a Warrant to Lender for the issuance
of 500,000 shares of common stock of the Borrower in the form of the Warrant
attached hereto as Exhibit A (the "WARRANTS").
2.10 ADDITIONAL INDEBTEDNESS. Borrower acknowledges and agrees that if it
shall incur any indebtedness for borrowed money on or after the date of this
Agreement, such indebtedness shall not mature on or before ninety (90) days
after the Maturity Date as such term is defined in the Note.
ARTICLE III.
COLLATERAL AND SUPPORT AGREEMENT
3.1 COLLATERAL. This Agreement and the Note are secured by that certain
Deed of Trust, Security Agreement and Fixture Financing Statement of even date
herewith executed by the Borrower, as grantor, in favor of the Lender, as
beneficiary (the "DEED OF TRUST"), in the form attached hereto as Exhibit B. At
such time that all obligations of the Borrower under the Note, this Loan
Agreement and any related Loan Documents have been irrevocably paid in full, the
Lender
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agrees to terminate the Deed of Trust and release the liens and security
interests granted to the Lender thereunder.
3.2 SUPPORT AGREEMENT. Borrower agrees to cause the execution and
delivery of the Support Agreement, in the form attached hereto as Exhibit C, by
the Borrower and Stephen D. King in favor of the Lender.
ARTICLE IV.
DEFAULTS
4.1 DEFAULTS. The occurrence of any of the following events and the
expiration of any applicable cure or grace periods, if any, shall constitute an
"EVENT OF DEFAULT":
(a) NONPAYMENT. The Borrower shall fail to pay when due any payment of
principal or interest on the Note within five (5) days after the
date on which such payment is due.
(b) NONPERFORMANCE. The Borrower shall fail to perform or observe any
other agreement, term, provision, condition, or covenant required
to be performed or observed by the Borrower hereunder, the Deed of
Trust or under any other Loan Document or other agreement with or
in favor of the Lender and such failure continues for thirty (30)
days after the Lender notifies the Borrower thereof in writing, or
if such default isn't reasonably susceptible to being cured within
such time period, then for such longer period of time as is
reasonably necessary so long as the Borrower is diligently
proceeding to cure the same, provided that such additional curing
period does not, in Lender's sole opinion, jeopardize Lender's
position.
(c) CHANGE OF MANAGEMENT. Stephen D. King shall at any time fail to be
the Chief Executive Officer or President of the Borrower or fail
to hold a management position of similar or greater responsibility
with the Borrower.
(d) OTHER INDEBTEDNESS. Borrower fails to repay when due, and after
expiration of any applicable cure or grace periods, any other
borrowed money obligation in excess of $50,000, or the holder of
any such obligation declares, or may declare, such obligation due
prior to its stated maturity of such Borrower's default hereunder;
(e) REPRESENTATIONS. Any representation or warranty made by Borrower
herein or in any of the other Loan Documents, any writings
furnished to Lender in connection with this Loan Agreement or in
any other agreement or instrument is untrue in any material
respect;
(f) ADVERSE CHANGE. There shall have been an adverse change in the
financial affairs of Borrower, in the operating condition of
Borrower, or in the value of the Collateral which,
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in the reasonable judgment of Lender, materially imperils
Borrower's ability to repay its obligations to Lender or Lender's
ability to realize adequately on the security therefor;
(g) LEASE DEFAULTS. The Borrower shall fail to perform or observe any
term, provision, condition or covenant required to be performed or
observed by the Borrower under the Lease (as such term is defined
in the Deed of Trust) as and when required therein and such
failure remains uncured beyond any applicable cure or grace period
as set forth in the Lease;
(h) NOTE EVENT OF DEFAULT. The occurrence of any "Event of Default" as
such term is defined in the Note.
4.2 ACCELERATION OF OBLIGATIONS. Upon the occurrence of any Event of
Default identified in Section 4.1 and the passage of any applicable cure or
grace period, the Lender may at any time thereafter declare the unpaid principal
balance of any obligations, together with the interest accrued thereon and other
amounts accrued hereunder and under the other Loan Documents (collectively, the
"OBLIGATIONS"), to be immediately due and payable; and the unpaid balance shall
thereupon be due and payable, all without presentation, demand, protest or
further notice of any kind, all of which are hereby waived, and notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents.
4.3 OTHER REMEDIES. Nothing in this Article IV is intended to restrict
the Lender's rights under any of the Loan Documents or at law, and the Lender
may exercise all such rights and remedies as and when they are available.
ARTICLE V.
MISCELLANEOUS
5.1 DELAY; CUMULATIVE REMEDIES. No delay on the part of the Lender in
exercising any right, power or privilege hereunder or under any of the other
Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein specified are cumulative and are not exclusive of
any rights or remedies which the Lender would otherwise have.
5.2 RELATIONSHIP TO OTHER DOCUMENTS. The warranties, covenants and other
obligations of the Borrower (and the rights and remedies of the Lender) that are
outlined in this Agreement and the other Loan Documents are intended to
supplement each other. In the event of any inconsistencies in any of the terms
in the Loan Documents, all terms shall be cumulative so as to give the Lender
the most favorable rights set forth in the conflicting documents, except that if
there is a direct conflict between any preprinted terms and specifically
negotiated terms (whether included in an addendum or otherwise), the
specifically negotiated terms will control.
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5.3 SUCCESSORS. The rights, options, powers and remedies granted in this
Agreement and the other Loan Documents shall extend to the Lender and to its
successors and assigns, shall be binding upon the Borrower and its successors
and assigns and shall be applicable hereto and to all renewals and/or extensions
hereof; provided, however, that notwithstanding the foregoing, the Borrower
shall not be entitled to assign any of its rights or obligations under this
Agreement or any other document or instrument related hereto without the prior
written consent of the Lender.
5.4 NOTICES. Although any notice required to be given hereunder or under
any of the other Loan Documents might be accomplished by other means, notice
will always be deemed given when placed in the United States Mail, with postage
prepaid, or sent by overnight delivery service, or sent by telex or facsimile,
in each case to the address and/or facsimile number set forth below or as
amended.
5.5 APPLICABLE LAW AND JURISDICTION; INTERPRETATION. This Agreement and
all other Loan Documents shall be governed by and interpreted in accordance with
the laws of the State of Ohio except to the extent superseded by Federal law.
Invalidity of any provision of this Agreement shall not affect the validity of
any other provision. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF ANY STATE OR FEDERAL COURT SITUATED IN HAMILTON COUNTY, OHIO AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS,
DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE, THE COLLATERAL,
ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT
AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein shall affect the
Lender's rights to serve process in any manner permitted by law, or limit the
Lender's right to bring proceedings against the Borrower in the competent courts
of any other jurisdiction or jurisdictions.
5.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original but together shall
constitute one and the same instrument.
(The remainder of this page has been intentionally left blank.)
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IN WITNESS WHEREOF, the undersigned have executed this LOAN AGREEMENT as
of August 24, 1999.
BORROWER:
CAFE ODYSSEY, INC.,
a Minnesota corporation
By: s/ Stephen D. King
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Name and Title: C.E.O.
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LENDER:
FAIRVIEW PARTNERS,
an Ohio General Partnership
By: s/ Timothy E. Johnson
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Name and Title: Timothy E. Johnson, Agent
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Borrower Address: 4801 West 81st Street
Suite 112
Bloomington, MN 55437
Borrower Telephone No.: (612) 837-9917
Borrower Facsimile No.: (612) 837-9916
Lender Address: 5807 McCray Court
Cincinnati, OH 45224
Lender Telephone No.: 513 661 3100
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Lender Facsimile No.: 513 661 3160
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EXHIBIT A
(FORM OF WARRANT)
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EXHIBIT B
(ATTACH FORM OF DEED OF TRUST)
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EXHIBIT C
(FORM OF SUPPORT AGREEMENT)
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