FORM OF CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is entered into as of the 29th
day of June, 2000 and effective as of the 28th day of October, 1999 by and among
NEW VISUAL ENTERTAINMENT, INC., a Utah corporation (the "Company"), and
[__________________], a [_____________] (the "LENDER").
W I T N E S S E T H:
- - - - - - - - - -
1. The Company has requested that the Lender provide the Company with a
credit facility.
2. The Lender is willing to provide such a facility to the Company upon
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITION OF TERMS
1.1 DEFINITIONS. As used in this Agreement, all exhibits hereto and in any
note, certificate, report, or other Loan Documents made or delivered pursuant to
this Agreement, the following terms have the respective meanings assigned to
them in this SECTION 1 or in the SECTION or recital referred to below:
"ADVANCE" means the disbursement by the Lender of a sum or sums lent to the
Company pursuant to this Agreement.
"ADVANCE DATE" has the meaning set forth in SECTION 2.2(a).
"AGREEMENT" means this Credit Agreement, including the EXHIBITS hereto, as the
same may be renewed, extended, amended, or modified from time-to-time
"CREDIT COMMITMENT" means $300,000, as the same may be decreased by the Company
pursuant to SECTION 2.1 or terminated by the Lender pursuant to SECTION 3.2.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 3.1.
"GAAP" means those generally accepted accounting principles and practices,
applied on a consistent basis, which are recognized as such by the American
Institute of Certified Public Accountants acting through its Accounting
Principles Board and the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of the
date in question.
"LOAN DOCUMENTS" means this Agreement, the Note and any agreements, documents
(and with respect to this Agreement, and such other agreements and documents,
any renewals, extensions, amendments, or supplements thereto), or certificates
at any time executed or delivered pursuant to the terms of this Agreement.
"MATERIAL ADVERSE CHANGE" means any act, circumstance, event or series of acts,
circumstances or events that has a material adverse effect on the business,
operations, property or financial condition of the Company and its subsidiaries,
including, without limitation, the following: (a) the failure of New Wheel
Technology to reach the "Milestone" by the "Termination Date", as such terms are
defined in that certain Agreement and Plan of Merger, dated as of February 14,
2000, by and among the Company, Astounding Acquisition Corporation, Allan
Blevins, Michael Shepperd and New Wheel Technology, Inc., a California
corporation (the "Merger Agreement"), or (b) the loss to the Company and its
subsidiaries of the services of Ray Willenberg, Jr. at any time, or the services
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of both Allan Blevins and Michael Shepperd prior to the "Milestone" being
reached, as such term is defined in the Merger Agreement.
"NEW WHEEL TECHNOLOGY" means New Wheel Technology, Inc., a subsidiary of the
Company.
"NOTE" means the Note executed by the Company and delivered pursuant to the
terms of this Agreement, a form of which is attached hereto as EXHIBIT A,
together with any renewals, extensions, or modifications thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of EXHIBIT B
attached hereto.
"OBLIGATIONS" means all present and future indebtedness, obligations, and
liabilities of every type and description of the Company at any time arising
under or in connection with this Agreement or any other Loan Document due or to
become due to the Lender or any other Person and shall include (i) all liability
for principal of and interest (including post-petition interest on the Principal
Debt) and (ii) all liability under the Loan Documents for any additional
interest, fees, taxes, compensation, costs, losses, expense reimbursements and
indemnification.
"PERSON" shall include an individual, corporation, joint venture, general or
limited partnership, trust, unincorporated organization, or government, or any
agency or political subdivision thereof.
"PRINCIPAL DEBT" means, as of any date, the sum of the outstanding principal
balance of all outstanding Advances hereunder as of such date.
"TERMINATION DATE" means the earlier of (a) October 28, 2002, or (b) the date
that the Lender's commitment to fund Advances hereunder is reduced to zero
pursuant to Section 2.1.
"UNUSED COMMITMENT" means, as of any date, (a) the Credit Commitment, MINUS (b)
the Principal Debt.
1.2 ACCOUNTING TERMS. As used in this Agreement, and in any certificate,
report, or other document made or delivered pursuant to this Agreement,
accounting terms not defined in SECTION 1.1, and accounting terms partly
defined in SECTION 1.1 to the extent not defined, have, as of any date, the
respective meanings given to them under GAAP and all references to balance
sheets or other financial statements means such statements, prepared in
accordance with GAAP as of such date.
1.3 RULES OF CONSTRUCTION. When used in this Agreement: (a) "OR" is not
exclusive; (b) a reference to a law includes any amendment or modification
to such law; (c) a reference to a Person includes its permitted successors
and permitted assigns; (d) except as provided otherwise, all references to
the singular shall include the plural and VICE VERSA; (e) except as
provided in this Agreement, a reference to an agreement, instrument, or
document shall include such agreement, instrument, or document as the same
may be amended, modified, renewed, extended, restated, or supplemented from
time to time in accordance with its terms and as permitted by the Loan
Documents; (f) all references to SECTIONS or EXHIBITS shall be to Sections
or Exhibits of this Agreement, unless otherwise indicated; (g) all EXHIBITS
to this Agreement shall be incorporated into this Agreement; (h) the words
"INCLUDE," "INCLUDES," and "INCLUDING" shall be deemed to be followed by
the phrase "WITHOUT LIMITATION;" and (i) except as otherwise provided
herein, in the computation of time from a specified date to a later
specified date, the word "FROM" means "FROM AND INCLUDING" and words "TO"
and "UNTIL" each mean "to but excluding."
2. THE LOAN
2.1 THE CREDIT COMMITMENT. Subject to the terms and conditions of this
Agreement, the Lender agrees to extend to the Company, from the date hereof
through the Termination Date, a line of credit which shall not exceed, in
the aggregate, the amount of the Credit Commitment. Within the limits of
this SECTION 2.1, during such period, the Company may borrow the Unused
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Commitment in accordance with this Agreement. The Company shall have the
right, upon three (3) business days' prior written notice to the Lender, to
permanently reduce the unused portion of the Credit Commitment.
2.2 MANNER OF BORROWING.
(a) NOTICE OF BORROWING. The Company may request an Advance by
submitting to Lender a Notice of Borrowing (in writing or by telephone
followed by written notice within one (1) business day), which is
irrevocable and binding on the Company. Each Notice of Borrowing must be
received by the Lender no later than 10:00 a.m. (San Diego, California
time) on the fifteenth (15th) business day before the date on which funds
are requested (the "ADVANCE DATE").
(b) ADVANCES. The obligation of the Lender to make any Advance under
this Agreement (including the initial Advance) shall be subject to the
following conditions precedent that must be in effect, as of the date of
such Advance and after giving effect thereto: (i) there exists no Event of
Default; (ii) the Lender shall have timely received from the Company a
Notice of Borrowing, and all of the statements contained in such Notice of
Borrowing shall be true and correct; and (iii) a Material Adverse Change
shall not have occurred since the date of this Agreement or since the most
recent Advance made to the Company.
(c) FUNDING. Subject to the terms and conditions in this Agreement, but
not later than 2:00 p.m., San Diego, California time, on the date specified
as an Advance Date, the Lender shall make available to Lilly Beter Capital
Group, Ltd., as the Company's agent, the amount of such Advance under the
Credit Commitment in immediately available funds.
(d) DEEMED ADVANCES. Notwithstanding anything to the contrary in this
Agreement, Advances may also be made in the following manner: Lilly Beter
Capital Group, Ltd., as the Lender's agent, may pay funds from time to time
on behalf of the Company to vendors of the Company or third party
professional service providers such as accountants and attorneys, including
fees and expenses due to Lilly Beter Capital Group, Ltd. by the Company.
Any such payments that are identified in writing to the Company as an
Advance hereunder shall be deemed an Advance. The Company shall be given
notice of any such deemed Advance as soon as practicable after the making
of such deemed Advance.
2.3 NOTE. The Principal Debt shall be evidenced by the Note in form and
substance satisfactory to the Lender executed by the Company, which Note
shall be (a) dated the date hereof, (b) in the amount of $300,000, and (c)
payable to the order of the Lender.
2.4 REPRESENTATIONS AND WARRANTIES. To induce the Lender to enter into this
Agreement and to make each Advance pursuant to the terms hereunder, the
Company hereby represents and warrants to the Lender that the following is
true and correct as of the date of this Agreement and as of the date of any
Notice of Borrowing: (a) the proceeds of each Advance (other than a deemed
Advance pursuant to Section 2.2(d) above) shall be used by the Company to
pay expenses incurred by or on behalf of New Wheel Technology, or for the
development of the Cu@OCx technology being developed by New Wheel
Technology, and (b) the Company shall present to the Lender invoices,
documents, and other evidence of the intended use for or the application of
the Advances and shall present such documentary support, if reasonably
possible, contemporaneously with any Notice of Borrowing presented to the
Lender.
2.5 INTEREST AND PRINCIPAL PAYMENTS.
(a) INTEREST RATE, PAYMENT OF INTEREST AND CALCULATION. The Company
promises to pay interest on the Principal Debt outstanding from time to
time at the rate of six percent (6%) per annum (the "INTEREST RATE") or, if
less, the maximum rate permitted by applicable law. Past due amounts
(including interest, to the extent permitted by law will also accrue
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interest at the Interest Rate or, if less, the maximum rate permitted by
applicable law, and will be payable on demand. Interest on the Principal
Debt will be calculated on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest in arrears, on the Termination Date
or shall be declared to be or shall automatically become due and payable,
on the principal sum hereof outstanding, from the most recent date to which
interest has been paid on the Principal Debt, or if no interest has been
paid on the Principal Debt from the date of this Agreement until payment in
full of the Principal Debt has been made.
(b) PRINCIPAL PAYMENTS. The unpaid Principal Debt together with all
accrued interest thereon shall be due and payable on the Termination Date.
(c) OPTIONAL PREPAYMENTS. The Company shall have the right, from
time-to-time, to prepay the unpaid Principal Debt or accrued interest, in
whole or in part, without premium or penalty.
2.6 MANNER AND APPLICATION OF PAYMENTS. All payments and prepayments by the
Company on account of principal, interest, and fees hereunder shall be made
in immediately available funds. All such payments shall be made to the
Lender at its principal office specified in the Note, not later than 12:00
noon, San Diego, California time, on the date due and funds received after
that hour shall be deemed to have been received by the Lender on the next
following business day. If any payment is scheduled to become due and
payable on a day which is not a business day, then such payment shall
instead become due and payable on the immediately following business day
and interest on the principal portion of such payment shall be payable at
the then applicable rate during such extension. All payments made on the
Note shall be applied first to accrued interest and then to principal (in
the inverse order of maturity in the case of prepayments).
2.7 DEFAULT RATE. If permitted by law, all past-due principal of and accrued
interest on the Note bears interest from maturity (stated or by
acceleration) at fourteen percent (14%) per annum, or, if less, the maximum
rate permitted by applicable law, until paid, regardless whether payment is
made before or after entry of a judgment.
3. EVENTS OF DEFAULT
3.1 EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall exist if any one or more of
the following events (herein collectively called "EVENTS OF DEFAULT") shall
occur and be continuing:
(a) the Company shall fail to pay the amount due to the Lender at the
Termination Date,
(b) the Company shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor, or liquidator of itself or of all
or a substantial part of its assets, (ii) file a voluntary petition in
bankruptcy, admit in writing that it is unable to pay its debts as they
become due, or generally not pay such debts as they become due, (iii) make
a general assignment for the benefit of creditors, (iv) file a petition or
answer seeking reorganization of an arrangement with creditors or to take
advantage of any bankruptcy or insolvency laws, (v) file an answer
admitting the material allegations of, or consent to, or default in
answering, a petition filed against it in any bankruptcy, reorganization,
or insolvency proceeding, or (vi) take corporate or partnership action for
the purpose of effecting any of the foregoing;
(c) an involuntary proceeding shall be commenced against the Company
seeking bankruptcy or reorganization of the Company or the appointment of a
receiver, custodian, trustee, liquidator, or other similar official or all
or substantially all of such its assets, and such proceeding shall not have
been dismissed within sixty (60) days of the filing thereof; or an order,
order for relief, judgment, or decree shall be entered by any court of
competent jurisdiction or other competent authority approving a petition or
complaint seeking reorganization of any Company or appointing a receiver,
custodian, trustee, liquidator, or other similar official, or of all or
substantially all of its assets; or
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(d) any representation or warranty made or deemed made by the Company
shall prove to have been incorrect in any material respect on or as of the
date made or deemed made;
(e) there shall have occurred a Material Adverse Change.
3.2 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default shall occur and be
continuing, then the Lender may, without notice, exercise any one or more
of the following rights and remedies, and any other remedies provided in
any of the Loan Documents, as the Lender in its sole discretion may deem
necessary or appropriate: (a) terminate the Lender's commitment to lend
hereunder, (b) declare the Obligations or any part thereof to be forthwith
due and payable, whereupon the same shall forthwith become due and payable
without presentment, demand, protest, notice of default, notice of
acceleration or of intention to accelerate, or other notice of any kind,
all of which the Company hereby expressly waives, anything contained herein
or in the Note to the contrary notwithstanding, (c) reduce any claim to
judgment, or (d) without notice of default or demand, pursue and enforce
any of the Lender's rights and remedies under the Loan Documents, or
otherwise provided under or pursuant to any applicable law or agreement;
PROVIDED, HOWEVER, if any Event of Default specified in SECTIONS 3.1(b) or
(c) shall occur, then the Obligations shall thereupon become due and
payable concurrently therewith, and the Lender's obligation to lend shall
immediately terminate hereunder, without any further action by the Lender
and without presentment, demand, protest, notice of default, notice of
acceleration or of intention to accelerate, or other notice of any kind,
all of which the Company hereby expressly waives.
3.3 ORDER OF APPLICATION.
(a) NO DEFAULT. If no Event of Default exists, then except as
specifically provided in the Loan Documents, any payments shall be applied
to the Obligations in the order and manner as set forth in SECTION 2.5.
(b) DEFAULT. If an Event of Default exists, then any payment (including
proceeds from the exercise of any rights and remedies in the Collateral)
shall be applied in the following order:
(i) to all fees and expenses which the Lender has not been paid or
reimbursed in accordance with the Loan Documents;
(ii) to accrued interest on the Principal Debt; and
(iii) to the remaining Obligations in the order and manner as the
Lender deems appropriate.
4. MISCELLANEOUS
4.1 NOTICES. Any communications required or permitted to be given by any of the
Loan Documents must be (a) in writing and personally delivered or mailed by
prepaid certified or registered mail, or (b) made by facsimile transmission
delivered or transmitted, to the party to whom such notice of communication
is directed, to the address of such party shown opposite its name on the
signature pages hereof. Any such communication shall be deemed to have been
given (whether actually received or not) on the day it is personally
delivered or, if transmitted by facsimile transmission, on the day that
such communication is transmitted as aforesaid subject to telephone
confirmation of receipt; PROVIDED, HOWEVER, that any notice received by
Lender after 10:00 a.m. San Diego, California time on any day from the
Company pursuant to SECTION 2.2 shall be deemed for the purposes of such
SECTION to have been given by the Company on the next succeeding day, or if
mailed, on the third (3rd) day after it is marked as aforesaid. Any party
may change its address for purposes of this Agreement by giving notice of
such change to the other parties pursuant to this SECTION 4.1.
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4.2 GOVERNING LAW. THIS AGREEMENT HAS BEEN PREPARED, IS BEING EXECUTED AND
DELIVERED, AND IS INTENDED TO BE PERFORMED IN THE STATE OF CALIFORNIA AND
THE SUBSTANTIVE LAWS OF SUCH STATE AND THE APPLICABLE FEDERAL LAWS OF THE
UNITED STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION,
ENFORCEMENT, AND INTERPRETATION OF THIS AGREEMENT AND ALL OF THE OTHER LOAN
DOCUMENTS.
4.3 CHOICE OF FORUM; CONSENT TO SERVICE OF PROCESS AND JURISDICTION. Any suit,
action, or proceeding against the Company with respect to this Agreement,
the Note, or other Loan Documents, or any judgment entered by any court in
respect thereof, shall be brought in the courts of the State of California,
County of San Diego, or in the United States courts located in the State of
California as the Lender in its sole discretion may elect, and the Company
hereby irrevocably submits to the nonexclusive jurisdiction of such courts
for the purpose of any such suit, action, or proceeding. The Company hereby
irrevocably consents to the service of process in any suit, action, or
proceeding in said court by the mailing thereof by the Lender by registered
or certified mail, postage prepaid, to the Company's address shown opposite
its name on the signature pages hereof. Nothing herein or in any of the
other Loan Documents shall affect the right of Lender to serve process in
any other manner permitted by law or shall limit the right of Lender to
bring any action or proceeding against the Company or with respect to any
of its property in courts in other jurisdictions. The Company hereby
irrevocably waives any objections which it may now or hereafter have to the
laying of venue of any suit, action, or proceeding arising out of or
relating to this Agreement, the Note, or any other Loan Documents brought
in the courts located in the State of California, County of San Diego, and
hereby further irrevocably waives any claim that any such suit, action, or
proceeding brought in any such court has been brought in any inconvenient
forum. Any action or proceeding by the Company against the Lender shall be
brought only in a court located in the State of California, County of San
Diego.
4.4 INVALID PROVISIONS. Any provision of any Loan Document held by a court of
competent jurisdiction to be illegal, invalid or unenforceable shall not
invalidate the remaining provisions of such Loan Document which shall
remain in full force and the effect thereof shall be confined to the
provision held invalid or illegal.
4.5 SUCCESSORS AND ASSIGNS. The Loan Documents shall be binding upon and inure
to the benefit of the Company and the Lender and their respective
successors, assigns, and legal representatives; PROVIDED, HOWEVER, that the
Company may not, without the prior written consent of the Lender, assign
any rights, powers, duties, or obligations thereunder. The Lender reserves
the right to sell all or a portion of its interest in the Loan Documents,
and the Lender shall have the right to disclose any information in its
possession regarding the Company to any potential transferee of the Note or
any part thereof.
4.6 HEADINGS. SECTION headings are for convenience of reference only and shall
in no way affect the interpretation of this Agreement.
4.7 NO THIRD PARTY BENEFICIARY. The parties do not intend the benefits of this
Agreement to inure to any third party, nor shall any Loan Document or any
course of conduct by any party hereto be construed to make or render the
Lender or any of its officers, directors, agents, or employees liable (a)
to any materialman, supplier, contractor, subcontractor, purchaser, or
lessee of any property owned by the Company, or (b) for debts or claims
accruing to any such Persons against the Company.
4.8 MULTIPLE COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
4.9 ENTIRETY. THIS AGREEMENT, THE NOTE, AND THE OTHER LOAN DOCUMENTS REFERRED
TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
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SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER
HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE
PROVISIONS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THE
COMPANY IS A PARTY MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN
WRITING SIGNED BY THE PARTIES HERETO.
4.10 CONFIDENTIALITY. The Lender agrees to keep confidential any information
furnished or made available to it by the Company pursuant to this Agreement
that is marked confidential; PROVIDED THAT nothing herein shall prevent the
Lender from disclosing such information (a) to any affiliate of the Lender,
or any officer, director, employee, agent, or advisor of the Lender or any
affiliate of the Lender, (b) to any other Person if reasonably incidental
to the administration of the credit facility provided herein, (c) as
required by any legal requirement, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any governmental
authority, (f) that is or becomes available to the public or that otherwise
becomes available to the Lender other than as a result of a disclosure by
the Lender prohibited by this Agreement, (g) in connection with any
litigation to which the Lender or any of its affiliates may be a party, (h)
to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this SECTION, to any actual or
proposed participant or assignee.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
Address for Notice:
LENDER:
----------------------- [-----------------------]
-----------------------
By:__________________________
Name: _______________________
Title: ________________________
COMPANY:
New Visual Entertainment, Inc. NEW VISUAL ENTERTAINMENT, INC.,
5920 Friars Road, Suite 104 A Utah Corporation
San Diego, CA 92108
By:__________________________
Name: _______________________
Title: ________________________
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EXHIBIT A
TO LOAN AGREEMENT
-----------------
NOTE
$300,000
[LENDER'S ADDRESS]
June 29, 2000
FOR VALUE RECEIVED, the undersigned, New Visual Entertainment, Inc., a
Utah corporation (the "COMPANY"), hereby unconditionally promises to pay to the
order of [___________________] (the "LENDER"), located at 3925 Excelsior Blvd.,
Suite 500 Minneapolis, Minnesota 55416, in lawful money of the United States of
America and in immediately available funds, the principal amount of (a) THREE
HUNDRED THOUSAND ($300,000), or, if less, (b) such lesser amount as shall equal
the aggregate unpaid principal amount of all Advances made by the Lender to the
Company pursuant to the Loan Agreement (as hereinafter defined), in one payment
together will all accrued and unpaid interest on the third anniversary of the
execution of this Note (the "Maturity Date"). The annual interest rate shall be
six percent (6%) calculated from the date of each Advance until the earlier of
the repayment of such Advance, together with accrued interest, or the Maturity
Date, all as set forth in the Loan Agreement.
The holder of this Note is authorized to endorse on the schedule
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date and amount of each Advance
made by the Lender to the Company pursuant to the Loan Agreement and the date
and amount of each payment or prepayment of principal thereof. Each such
endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed. The failure to make any such endorsement (or any error
therein) shall not affect the obligations of the Company in respect of any
Advance or the Loan Agreement.
This Note is the Note referred to in the Loan Agreement effective as of
October 28, 1999 (as amended, restated, supplemented or otherwise modified from
time to time, the "LOAN AGREEMENT"), among the Company, as borrower, and the
Lender, is unsecured and is subject to the provisions of the Loan Agreement.
Upon the occurrence of any one or more Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Loan Agreement.
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All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest, notice of acceleration and intent to accelerate,
and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Loan Agreement
and used herein shall have the meanings given to them in the Loan Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
NEW VISUAL ENTERTAINMENT, INC.
By:
---------------------------------------------------
Name:
-------------------------------------------------
Title:
------------------------------------------------
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<TABLE>
Schedule to Note
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Principal Amount of Unpaid Principal
Advance Amount Principal Balance Notation
Date of Advance Paid of Note Made By
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<S> <C> <C> <C> <C>
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</TABLE>
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EXHIBIT B
TO LOAN AGREEMENT
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
____________, 200__
[LENDER'S ADDRESS]
The undersigned, New Visual Entertainment, Inc., a Utah corporation
(the "COMPANY"), refers to the Credit Agreement effective as of October 28, 1999
(as amended or modified from time to time, the "LOAN AGREEMENT"), among the
Company, as borrower, and [_______________], as lender (the "LENDER").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Loan Agreement.
The Company hereby gives you notice pursuant to Section 2.2 of the Loan
Agreement that it requests an Advance on the terms set forth below:
(a) The Advance Date requested is __________.
(b) The aggregate principal amount of the requested Advance
is $________.
(c) The representations and warranties made by the Company in the
Loan Agreement are true and correct on and as of the date
hereof with the same force and effect as if made on and as of
such date.
(d) No Event of Default, as defined in the Loan Agreement, has
occurred and is continuing or will result from the requested
Advance.
Delivery of an executed counterpart of this Notice of Borrowing by
telecopier will be effective as delivery of an original executed counterpart of
this Notice of Borrowing.
Very truly yours,
NEW VISUAL ENTERTAINMENT, INC.
By: __________________________________
Name:_________________________________
Title: _______________________________
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