EXHIBIT 10.59
Banco de Iberoamerica
LOAN AGREEMENT (LINE OF CREDIT)
In Panama City, Republic of Panama, on the sixteenth (16) day of the month of
October, nineteen hundred and ninety-five (1995), by and between the
undersigned: BANCO DE IBEROAMERICA, S.A., a company duly incorporated and
registered in file 005305, roll 0217, image 0292, Microfilm Section (Commercial)
of the Public Registry represented by its General Manager, JUAN MANUEL LIMA
BAUTISTA, a male Spaniard of legal age, married, a banker, a resident of this
city, bearer of passport No. 24688804, and by its Commercial Manager, MIGUEL
AQUILES MONTENEGRO BARAHONA, a male Panamanian of legal age, married, a banker,
a resident of this city, bearer of I.D. card No. 7-78-284, empowered for this
act, as evidenced in file 005365, rolls 36578 and 16059, images 0052 and 0078,
both of the Microfilm Section (Commercial) of the Public Registry, respectively,
in their capacities as universal agents with powers registered in the Public
Registry, who shall hereinafter be referred to as THE BANK, party of the first
part, and EZCONY TRADING CORP. and NEW WORLD INTERACTIVE CORP., both companies
duly incorporated and registered in files 93213 and 251801, rolls 9061 and
33425, images 0025 and 0092, both of the Microfilm Section (Commercial) of the
Public Registry, of Mr. MOISES EZRA COHEN, a Panamanian male of legal age,
married, a businessman, a resident of this city, bearer of personal
identification card No. N-16-236, is their President and Legal Representative,
duly empowered for this act, as evidenced in General Power of Attorney
registered in file 093213, roll 24338, image 0051, of the Microfilm Section
(Commercial) of the Public Registry and minutes of the Special Shareholders
Meeting held on August 3, 1995, which is enclosed below and forms part of this
document, respectively, party of the second part, who shall hereinafter be
referred to as BORROWER, hereby certify the signing of a line of credit
agreement, entered into in accordance with the provisions of the following
clauses:
FIRST: THE BANK states that on this day, it has granted credit facilities to
BORROWER under the modality of a line of credit of up to SEVEN HUNDRED AND
FIFTY-THOUSAND dollars, legal tender in the United States of America
(US$750,000) (hereinafter DOLLARS), which BORROWER shall use as follows: To open
letters of credit for a period of up to 180 days, financing of letters of credit
up to 180 days, including the supplier's period, collections financing of up to
180 days, payments to suppliers up to 180 days and bank guaranties for
withdrawal of merchandise from docks, for a period of 1 year. This line of
credit may be used by either company, EZCONY TRADING CORP. or NEW WORLD
INTERACTIVE CORP.
SECOND: BORROWER may dispose of the entire amount referred to as the limit of
this line of credit by making partial withdrawals, provided he leaves with THE
BANK and to its favor a promissory note or promissory notes for a maximum term
of one hundred and eighty (180) days, during which time the payments to be made
will be set, both with respect to principal and interest.
THIRD: To make use of this line of credit, BORROWER shall fill out and sign the
forms which THE BANK has available to BORROWER for this purpose.
FOURTH: BORROWER shall have a maximum term of one hundred and eighty (180) days,
as of the date of disbursement, to repay the sum of money disbursed by THE BANK
with respect to each promissory note, letter of credit, collections, payments to
suppliers. BORROWER shall submit to THE BANK those letters that are to be
discounted and the product of the document shall be accredited to BORROWER's
current account. Letters discounted shall be paid on the dates due as indicated
on each letter. The due dates shall not exceed a period of (blank) days, as of
the date of submission for discount.
FIFTH: BORROWER shall pay THE BANK for the promissory notes and any other
documents mentioned in this agreement, commissions, interest and current
expenses at the time of each operation. BORROWER undertakes to pay a commission
of US$1,000 and a commission of US$50 for each disbursement evidenced on a
promissory note.
SIXTH: BORROWER undertakes to pay to THE BANK the sum of money disbursed by the
latter, on the payment due dates of each promissory note, as stipulated in this
agreement. If such periods of the promissory note or notes expire and such sums
have not been repaid to THE BANK, the line of credit shall be automatically
closed and BORROWER's obligations under this agreement shall be considered due,
giving rise to collection through the courts of any amounts that according to
THE BANK's books may be owing by BORROWER for principal and interest, plus costs
and expenses caused.
SEVENTH: BORROWER undertakes to maintain a current account in THE BANK with an
average balance not less than ten per cent (10%) of the facilities approved
throughout the entire duration of these agreements or during such time as
BORROWER has an outstanding balance.
EIGHTH: THE BANK is expressly authorized by BORROWER to make such payments
directly from the aforementioned current account on expiry of the payments set
out in the promissory notes referred to in this agreement.
NINTH: BORROWER shall pay monthly interest at the annual rate resulting from
adding three and one-half percentage points (3.5%) to the London Interbank
Offered Rate (L.I.B.O.R.) for loans with a six-month period applicable to the
sums of money disbursed by THE BANK for each operation, or the balance, based on
a three hundred and sixty-day (360) year. THE BANK is hereby empowered to change
this according to its own criteria and financial and monetary conditions. In
this case, BORROWER undertakes to pay the new interest rate five (5) days after
the date of a special delivery letter sent to the last address of BORROWER
registered with THE BANK and to pay the amount resulting from the variation.
BORROWER undertakes to pay the Special Interest Compensation Fund to THE BANK
(F.E.C.I.). If payment of the sum established in this document is in arrears,
either in respect of principal or of interest or any other reason, BORROWER
shall undertake to pay interest for arrears at the rate of 4% or at whatever
rate THE BANK may stipulate for overdue amounts, without prejudice to the other
rights and actions corresponding to THE BANK. In no case shall interest for
arrears be less than US$10 (ten dollars) monthly.
TENTH: It is clearly understood by THE PARTIES that the aforementioned
promissory notes are a simple means to facilitate the payments and that
consequently, shall not constitute a substitute for the obligations assumed
under this agreement.
ELEVENTH: The amount of the loans granted shall not exceed the limit set out in
the first clause of this agreement, but THE BANK may at any time reduce this
amount,
terminate this agreement or modify the interest rate or any other
stipulation by giving written notice by letter, telegram or telex addressed to
BORROWER at the address it shall notify to THE BANK. BORROWER shall pay THE BANK
the commissions interest and current expenses at the time of each operation.
TWELFTH: Throughout such time as the obligations assumed under this agreement
are outstanding, BORROWER undertakes:
a) To present to THE BANK such reports on its financial situation as THE BANK
may request
b) To allow BANK-appointed auditors to inspect its accounting and inventory
records, the cost being covered by BORROWER.
c) To continue to carry out the business it is currently involved in.
d) To present to THE BANK any information which in its opinion is necessary
information.
THIRTEENTH: THE BANK may declare due all of BORROWER's obligations
assumed and arising under this line of credit and consequently, demand the
immediate payment of outstanding balances in the event that: BORROWER ceases to
supply THE BANK with the necessary information required by the latter regarding
the financial situation of the business and any other necessary information, in
the opinion of THE BANK. If the assets of the business belonging to BORROWER are
attached or seized or otherwise subjected to legal action due to action of a
third party or of THE BANK. BORROWER's financial situation is such that in THE
BANK's opinion and at its sole discretion, it is advisable to close the line of
credit. Two (2) principal or service payments are in arrears. Failure on the
part of BORROWER to pay taxes, or social security installments in a fiscal
period, or rental of its business establishment if appropriate, during the
periods stipulated in the respective lease agreement. Default of any of the
clauses of this agreement. BORROWER authorizes THE BANK to transfer, assign or
negotiate the credit balance outstanding, and the guaranties established in its
favor as a result of this document.
FOURTEENTH: Upon request, BORROWER shall pay THE BANK all expenses and fees
incurred by same in relation to the negotiation, implementation, steps before
the notary, including legal or financial consultants' fees and expenses or of
any other type which in the opinion of THE BANK, it may use to assist or advise
it during preparation and throughout the duration of the credit to enforce or
protect any term or condition of the agreement.
FIFTEENTH: BORROWER waives the steps for executory process and domicile in the
event that THE BANK should need to resort to judicial collection of the
obligations herein assumed by it and agrees that in the event of public auction
of its assets, the sum owing plus interests agreed upon and the respective
expenses should serve as the basis for the claim.
SIXTEENTH: BOND: At this point, MOISES EZRA COHEN, described above, personally
appeared to act in his own name and representation and on behalf and in
representation of the company, EZCONY INTERAMERICA, INC., a company duly
incorporated on October 26, 1990, with IBD No. 37322 under the laws of the
British
Virgin Islands and of which he is President, being duly empowered for this act,
as evidenced in the Minutes of the Special Stockholders' Meeting held on August
3, 1995, enclosed below and an integral part of this document, and EZRA COHEN, a
Panamanian male of legal age, married, a businessman, a resident of this city
and bearer of personal identification card No. 8-223-130, who is acting in his
own name and representation, and stated that they hereby become the SOLIDARY
GUARANTORS (hereinafter referred to as the GUARANTORS) of BORROWER in favor of
THE BANK, to guarantee payment of the sum of SEVEN HUNDRED AND FIFTY THOUSAND
dollars (US$750,000), which is legal tender in the United States of America, of
principal, plus conventional or legal interest, commissions and performance of
each and every one of the obligations assumed by BORROWER for the entire
duration that they should survive; this shall not be extinguished in whole or in
part due to any act or omission of THE BANK, even if the essential or accessory
terms, clauses and conditions are modified or any real or personal collateral is
released, without the prior notice or consent of THE GUARANTORS. It is
understood that any extension or grace period granted by THE BANK to BORROWER
does not extinguish THE SOLIDARY BOND established by THE GUARANTORS, who openly
consent that such extension or grace period does not exempt them from their
obligation towards THE BANK, although for any reason THE BANK may not subrogate
its rights and privileges. THE BANK may require THE GUARANTORS to repay the
guaranteed obligations, with no need to require payment made against BORROWER.
It is also understood that THE GUARANTORS expressly waive any notice that may
correspond to them. Likewise, the GUARANTORS renounce the domicile, the
presentation, the benefit of exclusion, protest and notice of any document
covered by this bond not having received due attention, the future requirement
in case of arrears, steps pertaining to any executory process initiated based on
this bond and accept that all judicial or out-of-court expenses, costs, lawyers'
fees in relation to said process shall be for their sole account and that the
sum sued shall serve as the basis for any public auction. This bond shall not be
considered to be extinguished or weakened due to any act or omission of THE
BANK, nor because THE BANK allowed BORROWER to default on its obligations or to
fulfill them incompletely or differently from the agreed manner or it did not
insist on full compliance with the obligations or did not exercise its
respective contractual or legal rights in timely fashion.
SEVENTEENTH: COLLATERAL. At this point, BORROWER (EZCONY TRADING CORP.)
personally appeared and stated it shall hereinafter constitute collateral in
favor of THE BANK on its fixed-term deposits number 01-1001-224520, backup
number 203404, in the amount of TWO HUNDRED AND FIFTY THOUSAND dollars
(US$250,000), and on its successive increments and renewals in order to
guarantee and ensure payment of the obligations assumed or to be assumed in
future by BORROWER. Said obligations are additionally guaranteed by the interest
derived from said deposits, authorizing THE BANK to cancel the deposits under
reference and to use the funds derived from such cancellation to repay said
obligations as it should deem advisable, even assuming that there are no
accounts in arrears nor are the guaranteed obligations due.
THE BANK is authorized to retain and renew this guaranty deposit under the same
terms and conditions as THE BANK offers to its clients until such time as all
obligations guaranteed by this deposit have been repaid in full and, if and when
THE BANK should so
desire, to credit the liquid product of this deposit, its interest and other
credits to the payment of any of its obligations, with no need for formalities
or specific steps.
EIGHTEENTH: BORROWER undertakes to maintain fire insurance and extension of
coverage to cover all existing inventory at the premises in an amount not less
than FIVE HUNDRED THOUSAND DOLLARS (US$500,000). The corresponding policies
should be duly endorsed favor of THE BANK. THE BANK may enter into the insurance
agreement and renew it, as well as pay the corresponding premium directly, in
which case BORROWER accepts that the sums paid for this reason be charged to the
debt and payment, interest and guaranties be subject to the same conditions
stipulated in this agreement. In the event of an accident and at the request of
THE BANK, should the product of the insurance be insufficient, BORROWER shall
pay the balance against it according to THE BANK's records.
NINETEENTH: At this point, (blank) personally appeared and undertakes to
contract and endorse to THE BANK life insurance in the amount of (blank)
dollars. Said insurance may be contracted by THE BANK by paying the premiums
directly, in which case BORROWER accepts that the amounts paid for this reason
shall be charged to the debt and shall be subject in respect of payment,
interest and guaranties to the same conditions stipulated in this agreement.
They likewise state that they accept the conditions established in the policy
and in the collective insurance contract entered into or to be entered into with
an insurance company acceptable to THE BANK and they agree that in the event of
meeting their death before fully repaying the obligations assumed under this
agreement, the product of the insurance should go to repaying the said
obligations. It is understood that if insurance is enough to cover the whole of
the obligations, THE BANK shall cancel the obligations assumed under this
agreement. In the event that the whole of the obligations are not covered by
insurance, the outstanding balance of same shall continue to be guaranteed until
such time as it is fully repaid, together with other values established in this
paper.
TWENTIETH: The duration of this line of credit agreement shall be from the date
of its execution to July eighteenth (18), nineteen hundred and ninety-six
(1996), and it shall be renewed automatically unless communication to the
contrary has taken place between THE PARTIES.
TWENTY-FIRST: THE BANK reserves the right to early cancellation of the line of
credit at any time if it deems it necessary for any reason and shall so notify
BORROWER by special delivery. BORROWER may at any time terminate the accounts
corresponding to the line of credit by repaying the balance due at such date and
notifying THE BANK in writing, upon making payment, of its desire to terminate
the accounts.
TWENTY-SECOND: THE BANK accepts the obligations assumed in its favor by BORROWER
and GUARANTORS, as well as the bonds established in the terms set down in this
document.
TWENTY-THIRD: BORROWER and GUARANTORS state that they know and accept each and
every one of the clauses and conditions of this agreement and undertake to
faithfully comply with them.
ANNEX 1
For BANCO DE IBEROAMERICA, S.A.
(SIGNED) JUAN MANUELA LIMA BAUTISTA, Passport No. 24688804.
(SIGNED) EZCONY TRADING CORP., I.D. card N-16-236
(SIGNED) EZCONY INTERAMERICANA INC, MOISES EZRA COHEN, I.D. Card N-16-236.
(SIGNED) MIGUEL AQUILES MONTENEGRO BARAHONA, I.D. card 7-78-284
(SIGNED) NEW WORLD INTERACTIVE CORP. MOISES EZRA COHEN, I.D. n-16-236
(SIGNED) MOISES EZRA COHEN, I.D. card N-16-236
(SIGNED) EZRA COHEN, I.D. card 8-223-130
NOEMI MORENO ALBA, Notary Public, Tenth Circuit, Panama, Identity Card 7-37-78,
DOES HEREBY CERTIFY: that the signatures of MOISES EXRA COHEN and EZRA COHEN
have been recognized as their own by the parties signing this document;
consequently, they are genuine signatures.
Panama, October 18, 1995.
ANNEX 1
TWENTY-FOURTH: It is hereby agreed that upon expiry of the obligations herein
assumed, THE BANK may require payment of the balance due, either judicially or
out-of-court, of any BORROWER, in which case the BORROWER required to pay shall
undertake to repay the whole of the amounts due, including principal, interest,
commissions and other expenses.
The obligation on the part of the BORROWER required to pay shall not be
affected, impaired or diminished because of the fact that the latter had not
directly requested disbursements from THE BANK under the line of credit, or
because of the fact that it had requested or received disbursements for an
amount lower than the amount claimed, if the amount of the obligations due
should result from use of the credit facility by any or all other BORROWERS.
For: BANCO DE IBEROAMERICA, S.A.
(SIGNED) JUAN MANUEL LIMA BAUTISTA, Passport No. 24688804
(SIGNED) MIGUEL AQUILES MONTENEGRO BARAHONA, I.D. card 7-78-284
For: BORROWER
(SIGNED) EZCONY TRADING CORP., NEW WORLD INTERACTIVE CORP.
MOISES EZRA COHEN, I.D. card N-16-236
Panama, October 16, 1995
I RAQUEL TORRIJOS DE GOMEZ, Notary Public of the Third Circuit of Panama, I.D.
Card No. 8-243-747, hereby CERTIFY:
That MOISES EZRA COHEN, whom I know, has signed this document in my presence and
that of the undersigned witnesses and consequently, the signatures are genuine.
Panama, October 16, 1995
(Signed): Witness. (Signed): Witness.
(Signed): Lic. RAQUEL TORRIJOS DE GOMEZ, Third Notary Public.
MINUTES OF EXTRAORDINARY SHAREHOLDERS' MEETING
In Panama City, at 7:30 in the morning on August 3, 1995, an
Extraordinary Shareholders' Meeting of the NEW WORLD INTERACTIVE CORP. company
took place.
Prior summons having been waived by those who had a right to it and the
representation of 100% of the shares being present, there being thus the
regulatory quorum, the meeting was opened. It was presided by MOISES EZRA COHEN
MIZRACHI, acting as Secretary in said meeting DAVID DJEMAL, who are President
and Secretary, respectively, of this corporation.
The meeting being opened, the President explained that the reason for
the meeting was to authorize the company to hold a credit line agreement for the
amount of Seven Hundred and Fifty Thousand Dollars (US$750,000.00) with Banco de
Iberoamerica, S.A.
A motion was duly made, discussed and passed and the following
resolution was adopted:
IT IS HEREBY RESOLVED
1. To authorize the contracting of a credit line for the amount of Seven Hundred
and Fifty Thousand Dollars (US$750,000.00) with BANCO IBEROAMERICA, S.A., to be
used jointly with the EZCONY TRADING CORP. company.
2. To authorize Mr. MOISES EZRA COHEN MIZRACHI to sign all public and private
documents relating to his operation under the terms and conditions he may find
most favorable for the company.
There being no other matter to discuss, the meeting was closed at (blank)
(SIGNED) PRESIDENT.
(SIGNED) AD-HOC SECRETARY
I hereby certify that the above is a copy of the minutes of the Stockholders'
Meeting held on the date first above stated, which is contained in the company's
minute book.
(SIGNED) SECRETARY
MINUTES OF EXTRAORDINARY SHAREHOLDERS' MEETING
In Panama City, at 9:00 in the morning on August 3, 1995, A Special
Shareholders' Meeting of the EZCONY INTERAMERICA, INC. company took place.
Prior summons having been waived by those who had a right to it and the
representation of 100% of the shares being present, there being thus the
regulatory quorum, the meeting was opened. It was presided by MOISES EZRA COHEN
MIZRACHI and EZRA COHEN YITZAKI acted as ad-hoc Secretary.
The meeting being opened, the President explained that the reason for
the meeting was to establish the company as a solidary guarantor of the present
and future obligations which the EZCONY TRADING CORPORATION and NEW WORLD
INTERACTIVE CORPORATION may assume with BANCO DE IBEROAMERICA, S.A., and to
designate the person who would act for the company.
A motion was duly made, discussed and passed and the following
resolution was adopted:
IT IS HEREBY RESOLVED
1. To authorize the company to establish itself as solidary guarantor of the
present and future obligations assumed or acquired by the companies, EZCONY
TRADING CORPORATION and NEW WORLD INTERACTIVE CORPORATION, with BANCO DE
IBEROAMERICA, S.A., whether one or both of such companies use the credit
facility contracted with said Bank.
2. To authorize Mr. MOISES EZRA COHEN MIZRACHI to sign all public and private
documents relating to his operation under the terms and conditions he may find
most favorable for the company.
There being no other matter to discuss, the meeting was closed at 10:00 a.m.
(SIGNED) PRESIDENT.
(SIGNED) AD-HOC SECRETARY
I hereby certify that the above is a copy of the minutes of the Stockholders'
Meeting held on the date first above stated, which is contained in the company's
minute book, and I also certify that the president and the secretary who sign
this document are the holders of said positions.
(SIGNED) AD-HOC SECRETARY