AMENDMENT NO. 3 TO AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
--------------------------------------------------
This AMENDMENT NO. 3 TO AMENDED AND RESTATED REVOLVING CREDIT, TERM
LOAN AND SECURITY AGREEMENT (the "Agreement"), dated as of June 28, 2002, is by
and among KOALA CORPORATION, a Colorado corporation, as borrower and debtor
("Borrower"), KEYBANK NATIONAL ASSOCIATION ("KeyBank"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as a Lender and in its capacity as
agent acting in the manner described in the Credit Agreement ("U.S. Bank" or
"Agent").
RECITALS
--------
A. Borrower, U.S. Bank and KeyBank are parties to that certain
Amended and Restated Revolving Credit, Term Loan and Security Agreement dated
September 26, 2001, as amended on August 6, 2001, November 13, 2001 and March
31, 2002 (the "Credit Agreement").
B. Borrower and the Lenders have agreed to enter into this Agreement
to amend the Credit Agreement.
C. The Lenders are willing to amend the Credit Agreement based on
the covenants, terms and conditions set forth herein.
AGREEMENT
---------
1. Definitions.
(a) Any capitalized terms used but not defined in this Agreement
shall have the meanings given to such terms in the Credit Agreement.
(b) The following definition of "TERM LOAN A" is hereby added to
the Credit Agreement:
"TERM LOAN A" means an amount equal to $14,500,000 of the Term
Facility."
(c) The following definition of "TERM LOAN B" is hereby added to
the Credit Agreement:
"TERM LOAN B" means an amount equal to $12,000,000 of the Term
Facility."
2. Restructuring of Term Note. Effective as of the date of this
Agreement, the Term Loan in the original principal amount of $28,000,000 and
with a current outstanding principal balance of $26,500,000, is to be
restructured into two separate parts, Term Loan A which will be in the principal
amount of $14,500,000 and Term Loan B, which will be in the principal amount of
$12,000,000. Each of Term Loan A and Term Loan B will be evidenced by a
promissory note in the form of Exhibit B-2 to the Credit Agreement.
3. Repayment of Term Loan. Section 2.2(c) of the Credit Agreement is
hereby deleted and replaced with the following:
Repayment. Borrower promises to pay to Lenders the outstanding
principal of the Term Loan A, and upon full payment of Term Loan
A, Term Loan B as follows: (i) until the Term Loan Maturity Date,
(A) for the year 2002, quarterly payments in the amount of
$500,000, which payments shall be due and payable on the last
Business Day of each quarter with the first such payment being
due on June 30, 2002, (B) for the year 2003 and thereafter,
quarterly payments in the amount of $1,000,000, which payments
shall be due and payable on the last Business Day of each quarter
with the first such payment being due on March 31, 2003, and (C)
annual payments equal to 75% of Excess Cash Flow, which payments
shall be due and payable on April 30 for the immediately
preceding Fiscal Year beginning in Fiscal Year 2002, and (ii) in
full upon the earlier to occur of (A) termination of this
Agreement, (B) acceleration of the time for payment of the
Indebtedness pursuant to this Agreement or (C) on the Term Loan
Maturity Date. All payments of Excess Cash Flow shall be applied
to repayment of the Term Loan in reverse order of maturity.
Subject to the provisions of this Agreement, any amounts
outstanding under the Term Loan A, and upon full payment of Term
Loan A, Term Loan B may be voluntarily prepaid in the minimum
amounts of $100,000 or such greater amount that is an integral of
$10,000. Borrower shall notify Lender by 1:00 p.m. on any
Business Day of any prepayment of any portion of any Term Loan.
Borrower shall also be required to use all Net Proceeds to repay
the outstanding principal and interest of Term Loan A and, and
upon full payment of Term Loan A, Term Loan B, in reverse order
of maturity, up to the total amount of such Net Proceeds.
4. Additional Principal Payments. Any Principal Make-Up Payments, as
defined in the Waiver and Amendment No. 2 to Amended and Restated Revolving
Credit, Term Loan and Security Agreement among KeyBank, U.S. Bank and Borrower,
shall be applied first to Term Loan A and upon full payment of Term Loan A, to
Term Loan B.
5. Miscellaneous.
(a) Borrower agrees to pay on demand all costs and expenses of
the Agent in connection with the preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other
Transaction Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent (including the cost of internal counsel) with respect thereto and with
respect to advising the Agent as to its rights and responsibilities under the
Transaction Documents. Borrower further agrees to pay on demand all costs and
expenses of the Agent and the other Lenders, if any (including, without
limitation, reasonable attorneys' fees and expenses and the cost of internal
counsel), in connection with the enforcement (whether through negotiations,
legal proceedings, or otherwise) of this Agreement or the Transaction Documents.
(b) The Lenders and Borrower, as used herein, shall include the
successors or assigns of those parties, except that Borrower shall not have the
right to assign its rights hereunder or any interest herein.
(c) No modification, rescission, waiver, release, or amendment of
any provision of this Agreement shall be made, except by a written agreement
signed by Borrower and the Required Lenders.
(d) This Agreement may be executed in any number of counterparts,
and by the Lenders and Borrower on separate counterparts, each of which, when so
executed and delivered, shall be an original, but all of which shall together
constitute one and the same Agreement.
(e) Article and Section headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
(f) The terms of this Agreement and the other Transaction
Documents shall be cumulative except to the extent that they are specifically
inconsistent with each other, in which case the terms of this Agreement shall
prevail.
(g) This Agreement, the Credit Agreement, and the other
Transaction Documents constitute the entire agreement and understanding between
the parties hereto with respect to the transactions contemplated hereby and
supersede all prior negotiations, understandings, and agreements between such
parties with respect to such transactions, including, without limitation, those
expressed in any commitment letter delivered by the Lenders to Borrower.
(h) This Agreement, and the transactions evidenced hereby, shall
be governed by, and construed under, the internal laws of the State of Colorado,
without regard to principles of conflicts of law, as the same may from time to
time be in effect, including, without limitation, the Uniform Commercial Code as
in effect in the state.
(i) Borrower and the Lenders agree that any action or proceeding
to enforce, or arising out of, the Transaction Documents may be commenced in any
state or federal court of competent jurisdiction in the State of Colorado, and
Borrower and Lenders waive personal service of process and agree that a summons
and complaint commencing an action or proceeding in any such court shall be
properly served and shall confer personal jurisdiction if served by registered
or certified mail to Borrower or the Lenders, as appropriate, or as otherwise
provided by the laws of the State or the United States.
(j) Borrower and the Lenders hereby knowingly, voluntarily, and
intentionally waive any right to trial by jury borrower or lenders may have in
any action or proceeding, in law or in equity, in connection with the
Transaction Documents or the transactions related thereto. Borrower represents
and warrants that no representative or agent of the Lenders has represented,
expressly or otherwise, that the Lenders will not, in the event of litigation,
seek to enforce this right to jury trial waiver. Borrower acknowledges that the
Lenders have been induced to enter into this Agreement by, among other things,
the provisions of this paragraph.
(k) Oral agreements or commitments to loan money, extend credit
or to forbear from enforcing repayment of a debt, including promises to extend
or renew such debt, are not enforceable. To protect you (Borrower) and us
(Lenders) from misunderstanding or disappointment, any agreements we reach
covering such matters are contained in this Agreement and the Transaction
Documents, which are the complete and exclusive statement of the agreement
between us, except as we may later agree in writing to modify it.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
BORROWER:
KOALA CORPORATION
By:/s/ Jim Zazenski
---------------------------
Name: Jim Zazenski
Title: Chief Operating Officer
Address:
11600 East 53rd Avenue, Unit D, Denver, CO 80239
Attn: Jim Zazenski, Chief Operating Officer
Phone: (303) 770-3934 Facsimile: (303) 574-9000
LENDERS:
U.S. BANK NATIONAL ASSOCIATION
By:/s/ Richard J. Mikos
-----------------------
Name: Richard J. Mikos
Title: Vice President
Address:
601 Second Avenue South
Minneapolis, MN 55402-4302
Attention: Richard J. Mikos, Vice President
Phone: (612) 973-2134
Facsimile: (612) 973-2148
KEYBANK NATIONAL ASSOCIATION
By: /s/Jeanette Ganousis
------------------------
Name: Jeanette Ganousis
Title: Senior Vice President
Address:
1675 Broadway, Suite 500
Denver, CO 80202
Attn: Jeanette Ganousis
Phone: (720) 904-4542
Fax: (720) 904-4515
PROMISSORY NOTE
---------------
(Term Loan A)
$9,666,666.67 June 28, 2002
Denver, Colorado
FOR VALUE RECEIVED, the undersigned, KOALA CORPORATION, a Colorado
corporation (hereinafter referred to as the "Borrower"), promises to pay to the
order of U.S. BANK NATIONAL ASSOCIATION (herein, together with its successors
and assigns who become holders of this Note, called the "Lender") at 601 Second
Avenue South, Minneapolis, Minnesota 55402, or at such other place as may be
designated in writing by Lender from time to time, the principal sum of NINE
MILLION SIX HUNDRED SIXTY-SIX THOUSAND SIX HUNDRED SIXTY SIX AND 67/100 DOLLARS
($9,666,666.67), in accordance with the terms of the Revolving Credit and
Security Agreement dated as of September 26, 2001 among Borrower and Lenders (as
amended from time to time, the "Revolving Credit Agreement"), together with
interest on the unpaid principal balances outstanding at the rate specified in
the Revolving Credit Agreement. Principal and interest due under this Note shall
be payable at the time or times provided in the Revolving Credit Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
by Borrower to Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest lawful rate permissible under any law which a court
of competent jurisdiction may deem applicable hereto.
If any Event of Default shall have occurred and be continuing, Borrower
promises to pay the Default Rate, on the outstanding unpaid principal and
interest balance hereof at the times and in the amount and manner provided for
more particularly in the Revolving Credit Agreement. Interest on the amount of
interest so unpaid shall be compounded monthly until paid in full. Principal,
interest, fees, charges, expenses and other costs owing hereunder are payable in
lawful money of the United States of America such that Lender has received
immediately available funds for the credit of Borrower on the date that such
payment or payments is or are due.
This Note is secured by the Collateral listed in the Revolving Credit
Agreement and other security instruments described in the Revolving Credit
Agreement. The cancellation or surrender of this Note, upon payment or
otherwise, shall not affect any right Lender has to retain the Collateral or any
other collateral for any other Indebtedness of Borrower to Lender.
Upon the occurrence of any of the following events:
1. Failure to pay when due any principal or interest on this Note
or any costs, fees, reimbursable expenses or other amounts payable by
Borrower under the Revolving Credit Agreement or under any of the
other Transaction Documents; or
2. The occurrence of any other Event of Default under the
Revolving Credit Agreement, or under any of the other Transaction
Documents, which is not cured within any applicable cure period
contained in the Revolving Credit Agreement;
then Lender may, at Lender's option: (i) have all principal, interest, fees,
charges, expenses and other costs outstanding or owing hereunder bear interest
at the Default Rate for so long as said Event of Default shall continue; and
(ii) declare all sums outstanding or owing hereunder, including principal,
interests fees, charges, expenses and other costs to be immediately due and
payable without presentment, demand or notice of any kind, all of which are
hereby expressly waived by Borrower; provided, however, that the principal,
interest, fees, expenses, charges and other costs owing on this Note shall be
and become automatically due and payable if the Revolving Credit Agreement, or
any of the other Transaction Documents, provide for the automatic acceleration
of the payment of the principal, interest, fees, charges, expenses and other
costs owing on this Note upon the occurrence of an Event of Default.
Borrower may prepay this Note, in whole or in part, at any time;
provided, however, that any prepayment will be subject to the terms of Article 2
of the Revolving Credit Agreement.
No waiver of any breach, Event of Default, default or failure of
condition under the terms of this Note, the Revolving Credit Agreement, or the
other Transaction Documents shall be implied from any failure of Lender to take,
or any delay by Lender in taking, action with respect to any such breach of or
Event of Default, default or failure of condition or from any previous waiver of
any similar or unrelated breach of or Event of Default, default or failure of
condition. A waiver of any term of this Note, the Revolving Credit Agreement or
the other Transaction Documents must be made in writing and shall be limited to
the express written terms of such waiver.
All obligations of Borrower and all rights, powers and remedies of
Lender expressed herein shall be in addition to and not in limitation of those
provided by law or in any written agreement or instrument (other than this Note)
relating to any of the Indebtedness of Borrower to Lender or the security
therefor.
Borrower waives presentment; demand; notice of dishonor; notice of
protest and nonpayment; notice of default interest and late charges; notice of
intent to accelerate; notice of acceleration; and diligence in taking any action
to collect any sums owing under this Note or in proceeding against any of the
rights and interests in and to properties securing payment of this Note.
Time is of the essence with respect to every provision hereof.
This Note is issued pursuant to the Revolving Credit Agreement and is
subject to the terms and conditions specified therein. Capitalized terms not
otherwise defined in this Note shall have the meanings assigned to them under
the Revolving Credit Agreement.
This Note shall be construed and enforced in accordance with the laws
of the State of Colorado, without regard to principles of conflicts of law,
except to the extent that Federal laws preempt the laws of the State of
Colorado.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first above written.
KOALA CORPORATION
By: /s/ Jim Zazenski
---------------------
Name: Jim Zazenski
Title: Chief Operating Officer
PROMISSORY NOTE
---------------
(Term Loan A)
$4,833,333.33 June 28, 2002
Denver, Colorado
FOR VALUE RECEIVED, the undersigned, KOALA CORPORATION, a Colorado
corporation (hereinafter referred to as the "Borrower"), promises to pay to the
order of KEYBANK NATIONAL ASSOCIATION (herein, together with its successors and
assigns who become holders of this Note, called the "Lender") at 1675 Broadway,
Suite 500 Denver, Colorado 80202, or at such other place as may be designated in
writing by Lender from time to time, the principal sum of FOUR MILLION EIGHT
HUNDRED THIRTY-THREE THOUSAND THREE HUNDRED THIRTY THREE AND 33/100 DOLLARS
($4,833,333.33), in accordance with the terms of the Revolving Credit and
Security Agreement dated as of September 26, 2001 among Borrower and Lenders (as
amended from time to time, the "Revolving Credit Agreement"), together with
interest on the unpaid principal balances outstanding at the rate specified in
the Revolving Credit Agreement. Principal and interest due under this Note shall
be payable at the time or times provided in the Revolving Credit Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
by Borrower to Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest lawful rate permissible under any law which a court
of competent jurisdiction may deem applicable hereto.
If any Event of Default shall have occurred and be continuing, Borrower
promises to pay the Default Rate, on the outstanding unpaid principal and
interest balance hereof at the times and in the amount and manner provided for
more particularly in the Revolving Credit Agreement. Interest on the amount of
interest so unpaid shall be compounded monthly until paid in full. Principal,
interest, fees, charges, expenses and other costs owing hereunder are payable in
lawful money of the United States of America such that Lender has received
immediately available funds for the credit of Borrower on the date that such
payment or payments is or are due.
This Note is secured by the Collateral listed in the Revolving Credit
Agreement and other security instruments described in the Revolving Credit
Agreement. The cancellation or surrender of this Note, upon payment or
otherwise, shall not affect any right Lender has to retain the Collateral or any
other collateral for any other Indebtedness of Borrower to Lender.
Upon the occurrence of any of the following events:
1. Failure to pay when due any principal or interest on this Note
or any costs, fees, reimbursable expenses or other amounts payable by
Borrower under the Revolving Credit Agreement or under any of the
other Transaction Documents; or
2. The occurrence of any other Event of Default under the
Revolving Credit Agreement, or under any of the other Transaction
Documents, which is not cured within any applicable cure period
contained in the Revolving Credit Agreement;
then Lender may, at Lender's option: (i) have all principal, interest, fees,
charges, expenses and other costs outstanding or owing hereunder bear interest
at the Default Rate for so long as said Event of Default shall continue; and
(ii) declare all sums outstanding or owing hereunder, including principal,
interests fees, charges, expenses and other costs to be immediately due and
payable without presentment, demand or notice of any kind, all of which are
hereby expressly waived by Borrower; provided, however, that the principal,
interest, fees, expenses, charges and other costs owing on this Note shall be
and become automatically due and payable if the Revolving Credit Agreement, or
any of the other Transaction Documents, provide for the automatic acceleration
of the payment of the principal, interest, fees, charges, expenses and other
costs owing on this Note upon the occurrence of an Event of Default.
Borrower may prepay this Note, in whole or in part, at any time;
provided, however, that any prepayment will be subject to the terms of Article 2
of the Revolving Credit Agreement.
No waiver of any breach, Event of Default, default or failure of
condition under the terms of this Note, the Revolving Credit Agreement, or the
other Transaction Documents shall be implied from any failure of Lender to take,
or any delay by Lender in taking, action with respect to any such breach of or
Event of Default, default or failure of condition or from any previous waiver of
any similar or unrelated breach of or Event of Default, default or failure of
condition. A waiver of any term of this Note, the Revolving Credit Agreement or
the other Transaction Documents must be made in writing and shall be limited to
the express written terms of such waiver.
All obligations of Borrower and all rights, powers and remedies of
Lender expressed herein shall be in addition to and not in limitation of those
provided by law or in any written agreement or instrument (other than this Note)
relating to any of the Indebtedness of Borrower to Lender or the security
therefor.
Borrower waives presentment; demand; notice of dishonor; notice of
protest and nonpayment; notice of default interest and late charges; notice of
intent to accelerate; notice of acceleration; and diligence in taking any action
to collect any sums owing under this Note or in proceeding against any of the
rights and interests in and to properties securing payment of this Note.
Time is of the essence with respect to every provision hereof.
This Note is issued pursuant to the Revolving Credit Agreement and is
subject to the terms and conditions specified therein. Capitalized terms not
otherwise defined in this Note shall have the meanings assigned to them under
the Revolving Credit Agreement.
This Note shall be construed and enforced in accordance with the laws
of the State of Colorado, without regard to principles of conflicts of law,
except to the extent that Federal laws preempt the laws of the State of
Colorado.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first above written.
KOALA CORPORATION
By: /s/ Jim Zazenski
---------------------
Name: Jim Zazenski
Title: Chief Operating Officer
PROMISSORY NOTE
---------------
(Term Loan B)
$8,000,000.00 June 28, 2002
Denver, Colorado
FOR VALUE RECEIVED, the undersigned, KOALA CORPORATION, a Colorado
corporation (hereinafter referred to as the "Borrower"), promises to pay to the
order of U.S. BANK NATIONAL ASSOCIATION (herein, together with its successors
and assigns who become holders of this Note, called the "Lender") at 601 Second
Avenue South, Minneapolis, Minnesota 55402, or at such other place as may be
designated in writing by Lender from time to time, the principal sum of EIGHT
MILLION DOLLARS ($8,000,000.00), in accordance with the terms of the Revolving
Credit and Security Agreement dated as of September 26, 2001 among Borrower and
Lenders (as amended from time to time, the "Revolving Credit Agreement"),
together with interest on the unpaid principal balances outstanding at the rate
specified in the Revolving Credit Agreement. Principal and interest due under
this Note shall be payable at the time or times provided in the Revolving Credit
Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
by Borrower to Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest lawful rate permissible under any law which a court
of competent jurisdiction may deem applicable hereto.
If any Event of Default shall have occurred and be continuing, Borrower
promises to pay the Default Rate, on the outstanding unpaid principal and
interest balance hereof at the times and in the amount and manner provided for
more particularly in the Revolving Credit Agreement. Interest on the amount of
interest so unpaid shall be compounded monthly until paid in full. Principal,
interest, fees, charges, expenses and other costs owing hereunder are payable in
lawful money of the United States of America such that Lender has received
immediately available funds for the credit of Borrower on the date that such
payment or payments is or are due.
This Note is secured by the Collateral listed in the Revolving Credit
Agreement and other security instruments described in the Revolving Credit
Agreement. The cancellation or surrender of this Note, upon payment or
otherwise, shall not affect any right Lender has to retain the Collateral or any
other collateral for any other Indebtedness of Borrower to Lender.
Upon the occurrence of any of the following events:
1. Failure to pay when due any principal or interest on this Note
or any costs, fees, reimbursable expenses or other amounts payable by
Borrower under the Revolving Credit Agreement or under any of the
other Transaction Documents; or
2. The occurrence of any other Event of Default under the
Revolving Credit Agreement, or under any of the other Transaction
Documents, which is not cured within any applicable cure period
contained in the Revolving Credit Agreement;
then Lender may, at Lender's option: (i) have all principal, interest, fees,
charges, expenses and other costs outstanding or owing hereunder bear interest
at the Default Rate for so long as said Event of Default shall continue; and
(ii) declare all sums outstanding or owing hereunder, including principal,
interests fees, charges, expenses and other costs to be immediately due and
payable without presentment, demand or notice of any kind, all of which are
hereby expressly waived by Borrower; provided, however, that the principal,
interest, fees, expenses, charges and other costs owing on this Note shall be
and become automatically due and payable if the Revolving Credit Agreement, or
any of the other Transaction Documents, provide for the automatic acceleration
of the payment of the principal, interest, fees, charges, expenses and other
costs owing on this Note upon the occurrence of an Event of Default.
Borrower may prepay this Note, in whole or in part, at any time;
provided, however, that any prepayment will be subject to the terms of Article 2
of the Revolving Credit Agreement.
No waiver of any breach, Event of Default, default or failure of
condition under the terms of this Note, the Revolving Credit Agreement, or the
other Transaction Documents shall be implied from any failure of Lender to take,
or any delay by Lender in taking, action with respect to any such breach of or
Event of Default, default or failure of condition or from any previous waiver of
any similar or unrelated breach of or Event of Default, default or failure of
condition. A waiver of any term of this Note, the Revolving Credit Agreement or
the other Transaction Documents must be made in writing and shall be limited to
the express written terms of such waiver.
All obligations of Borrower and all rights, powers and remedies of
Lender expressed herein shall be in addition to and not in limitation of those
provided by law or in any written agreement or instrument (other than this Note)
relating to any of the Indebtedness of Borrower to Lender or the security
therefor.
Borrower waives presentment; demand; notice of dishonor; notice of
protest and nonpayment; notice of default interest and late charges; notice of
intent to accelerate; notice of acceleration; and diligence in taking any action
to collect any sums owing under this Note or in proceeding against any of the
rights and interests in and to properties securing payment of this Note.
Time is of the essence with respect to every provision hereof.
This Note is issued pursuant to the Revolving Credit Agreement and is
subject to the terms and conditions specified therein. Capitalized terms not
otherwise defined in this Note shall have the meanings assigned to them under
the Revolving Credit Agreement.
This Note shall be construed and enforced in accordance with the laws
of the State of Colorado, without regard to principles of conflicts of law,
except to the extent that Federal laws preempt the laws of the State of
Colorado.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first above written.
KOALA CORPORATION
By: /s/ Jim Zazenski
---------------------
Name: Jim Zazenski
Title: Chief Operating Officer
PROMISSORY NOTE
---------------
(Term Loan B)
$4,000,000.00 June 28, 2002
Denver, Colorado
FOR VALUE RECEIVED, the undersigned, KOALA CORPORATION, a Colorado
corporation (hereinafter referred to as the "Borrower"), promises to pay to the
order of KEYBANK NATIONAL ASSOCIATION (herein, together with its successors and
assigns who become holders of this Note, called the "Lender") at 1675 Broadway,
Suite 500 Denver, Colorado 80202, or at such other place as may be designated in
writing by Lender from time to time, the principal sum of FOUR MILLION DOLLARS
($4,000,000.00), in accordance with the terms of the Revolving Credit and
Security Agreement dated as of September 26, 2001 among Borrower and Lenders (as
amended from time to time, the "Revolving Credit Agreement"), together with
interest on the unpaid principal balances outstanding at the rate specified in
the Revolving Credit Agreement. Principal and interest due under this Note shall
be payable at the time or times provided in the Revolving Credit Agreement.
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
by Borrower to Lender for the use, forbearance or detention of money advanced
hereunder exceed the highest lawful rate permissible under any law which a court
of competent jurisdiction may deem applicable hereto.
If any Event of Default shall have occurred and be continuing, Borrower
promises to pay the Default Rate, on the outstanding unpaid principal and
interest balance hereof at the times and in the amount and manner provided for
more particularly in the Revolving Credit Agreement. Interest on the amount of
interest so unpaid shall be compounded monthly until paid in full. Principal,
interest, fees, charges, expenses and other costs owing hereunder are payable in
lawful money of the United States of America such that Lender has received
immediately available funds for the credit of Borrower on the date that such
payment or payments is or are due.
This Note is secured by the Collateral listed in the Revolving Credit
Agreement and other security instruments described in the Revolving Credit
Agreement. The cancellation or surrender of this Note, upon payment or
otherwise, shall not affect any right Lender has to retain the Collateral or any
other collateral for any other Indebtedness of Borrower to Lender.
Upon the occurrence of any of the following events:
1. Failure to pay when due any principal or interest on this Note
or any costs, fees, reimbursable expenses or other amounts payable by
Borrower under the Revolving Credit Agreement or under any of the
other Transaction Documents; or
2. The occurrence of any other Event of Default under the
Revolving Credit Agreement, or under any of the other Transaction
Documents, which is not cured within any applicable cure period
contained in the Revolving Credit Agreement;
then Lender may, at Lender's option: (i) have all principal, interest, fees,
charges, expenses and other costs outstanding or owing hereunder bear interest
at the Default Rate for so long as said Event of Default shall continue; and
(ii) declare all sums outstanding or owing hereunder, including principal,
interests fees, charges, expenses and other costs to be immediately due and
payable without presentment, demand or notice of any kind, all of which are
hereby expressly waived by Borrower; provided, however, that the principal,
interest, fees, expenses, charges and other costs owing on this Note shall be
and become automatically due and payable if the Revolving Credit Agreement, or
any of the other Transaction Documents, provide for the automatic acceleration
of the payment of the principal, interest, fees, charges, expenses and other
costs owing on this Note upon the occurrence of an Event of Default.
Borrower may prepay this Note, in whole or in part, at any time;
provided, however, that any prepayment will be subject to the terms of Article 2
of the Revolving Credit Agreement.
No waiver of any breach, Event of Default, default or failure of
condition under the terms of this Note, the Revolving Credit Agreement, or the
other Transaction Documents shall be implied from any failure of Lender to take,
or any delay by Lender in taking, action with respect to any such breach of or
Event of Default, default or failure of condition or from any previous waiver of
any similar or unrelated breach of or Event of Default, default or failure of
condition. A waiver of any term of this Note, the Revolving Credit Agreement or
the other Transaction Documents must be made in writing and shall be limited to
the express written terms of such waiver.
All obligations of Borrower and all rights, powers and remedies of
Lender expressed herein shall be in addition to and not in limitation of those
provided by law or in any written agreement or instrument (other than this Note)
relating to any of the Indebtedness of Borrower to Lender or the security
therefor.
Borrower waives presentment; demand; notice of dishonor; notice of
protest and nonpayment; notice of default interest and late charges; notice of
intent to accelerate; notice of acceleration; and diligence in taking any action
to collect any sums owing under this Note or in proceeding against any of the
rights and interests in and to properties securing payment of this Note.
Time is of the essence with respect to every provision hereof.
This Note is issued pursuant to the Revolving Credit Agreement and is
subject to the terms and conditions specified therein. Capitalized terms not
otherwise defined in this Note shall have the meanings assigned to them under
the Revolving Credit Agreement.
This Note shall be construed and enforced in accordance with the laws
of the State of Colorado, without regard to principles of conflicts of law,
except to the extent that Federal laws preempt the laws of the State of
Colorado.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the date first above written.
KOALA CORPORATION
By: /s/ Jim Zazenski
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Name: Jim Zazenski
Title: Chief Operating Officer