EXHIBIT 10.19
CREDIT FACILITY AGREEMENT
THIS CREDIT FACILITY AGREEMENT (the "Agreement"), is made and entered into
as of May 17th, 2000 by and between ASPI EUROPE, INC., a Florida Corporation
("ASPI"), and MANHATTAN INVESTMENTS INCORPORATED, a NEVIS corporation ("MAN").
RECITALS
WHEREAS, MAN has agreed to provide ASPI with a loan facility of One Hundred
and Twenty-Five Thousand United States Dollars (US$125,000) on the terms and
conditions set forth herein and in the exhibits hereto.
WHEREAS, the parties have agreed that the Maturity Date for all credit
extended by MAN be the 31st of August, 2000.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, MAN and ASPI hereby agree as follows:
1. Credit Facility; Use of Proceeds.
1.1 Subject to the terms and conditions of this Agreement, MAN hereby
agrees to immediately advance One Hundred and Twenty-Five Thousand
United States Dollars (US$125,000) to ASPI.
1.2 ASPI may, from time to time, prior to the Maturity Date, partially or
wholly repay all advances.
1.3 The Advances shall be used by ASPI for working capital purposes and
current payables.
2. Interest Rate and Fees. Interest and fees shall accrue and be payable on
all Advances as set forth in the Note.
3. Collateral. This Agreement is not collateralized.
4. Representations and Warranties of ASPI.
As a material inducement to MAN to enter into and execute this Agreement
and to perform its covenants, agreements, duties and obligations hereunder, and
in consideration therefor, ASPI hereby makes the following representations and
warranties, each of which (a) is material and is being relied upon by MAN as a
material inducement to enter into this Agreement and (b) is true at and as of
the date hereof.
4.1 Authority. ASPI has full power and authority to enter into and perform
its obligations set forth in this Agreement and to borrow and repay
Advances under this Agreement.
4.2 Compliance with Laws, etc. The execution and delivery of this
Agreement does not and will not violate any requirement of law or any
contractual obligation of ASPI.
-1-
<PAGE>
4.3 Defaults. ASPI is not currently in default of any contractual
obligation which would have a material adverse effect on ASPI's
business, assets or financial condition.
4.4 Litigation. There is no litigation, arbitration or other proceedings
taking place, pending or to the knowledge of ASPI threatened against
ASPI or any of its assets which questions the validity of this
Agreement or the right of ASPI to enter into it or to consummate the
transactions contemplated hereby.
4.5 Disclosures. To the best of ASPI's knowledge, the information
contained in the covenants, agreements, representations and warranties
of ASPI in this Agreement, as contemplated hereby (i) does not contain
or will not contain any untrue statement of a material fact, or (ii)
does not omit or will not omit a material fact necessary to make the
statements contained herein or therein not misleading.
4.6 Material Adverse Change. Except as otherwise disclosed to MAN, there
has been no Event of Default (as defined in Section 6.1) and no change
or changes in the operations, management, business or prospects of
ASPI which, either individually or in the aggregate, has had or may
have, a material adverse effect on ASPI and its subsidiaries, taken as
a whole (a "Material Adverse Change").
5. Covenants of ASPI. ASPI covenants and agrees with MAN that during the
term of this Agreement, unless otherwise consented to in writing by MAN, ASPI
shall:
5.1 Operation in the Ordinary Course. Operate and conduct its business
within the normal course of business, and use reasonable efforts to
maintain its business and properties, maintain insurance in accordance
with current policies, and operate in accordance with all contractual
obligations and requirements of law to protect and preserve the value
of MAN.
5.2 Minimize Advances. Limit its Advances pursuant to the Note to funds
necessary to meet cash flow requirements, to the extent that the
business strategy of ASPI, as discussed with MAN, would not be
comprised.
5.3 Cooperation in Fundraising. Will execute and deliver such instruments,
documents and further assurances as MAN from time to time may
reasonably request in connection with raising capital for ASPI.
5.4 Inspection Rights. ASPI shall permit any authorized representative
designated by MAN, at MAN's expense, to visit and inspect any of the
properties of the ASPI or any of its subsidiaries, and to discuss its
and their affairs, finances and accounts with its and their officers
or employees all at such reasonable times and as often as may be
reasonably requested; provided that such rights shall be exercised in
a manner so as not to materially and adversely disrupt the ordinary
course of business of the ASPI or any of its subsidiaries.
5.5 Notification. ASPI shall promptly (but in no event more than five (5)
days following the occurrence of any such event or matter) notify MAN
of (i) the occurrence of any Material Adverse Change or any "Event of
Default" (as defined in Section 6.1), or any condition, event or act
which with the giving of notice or the passage of time (or both) would
constitute an Event of Default; (ii) any change in the name,
organizational structure or control of ASPI; (iii) the occurrence of
any uninsured or partially insured loss through fire, theft, liability
or property damage in excess of $100,000; or (iv) any suit or other
proceeding where the amount sought to be recovered by the complaining
party exceeds $100,000, or where one or more of the allegations
against ASPI or any of its officers,
-2-
<PAGE>
directors or employees involves fraud or potential criminal liability
on the part of any such persons or entities.
5.6 Use of Proceeds. ASPI shall use the funds for working capital
purposes.
6. Events of Default; Remedies.
6.1 Event of Default. The occurrence of any one or more of the following
shall constitute an "Event of Default" under this Agreement: (a) ASPI
shall fail to pay when due any principal, interest, fees or other
amounts payable under or shall fail to observe or perform any
obligation, duty or other covenant contained in this Agreement, or any
representation or warranty of ASPI under any Loan Document or any
exhibit hereto shall prove at any time to be incorrect in any
significant respect (provided that ASPI shall be provided a ten (10)
day grace period not more often than twice during any 12 month period
with respect to the failure to make any payment required hereunder);
(b) ASPI shall be in default under the terms of any other material
agreement, contract or instrument to which it shall be a party, which
default shall have a material adverse impact on ASPI; (c) ASPI shall
dissolve and wind-up its business affairs or shall otherwise
discontinue or substantially wind down its business operations; shall
become insolvent; shall suffer, consent to or apply for the
appointment of a receiver, trustee, custodian or liquidator of or for
itself or for any of its property; shall generally fail to pay its
debts as they become due or make a general a assignment for the
benefit of creditors; shall file a voluntary petition in bankruptcy or
seek a reorganization in order to effect a plan or other arrangement
with creditors or seek any other relief under the insolvency or
bankruptcy laws of any country, as amended (the "Bankruptcy Law"), or
any state law, whether now or hereafter in effect; shall be
adjudicated bankrupt; or shall have entered against it any order for
relief under the Bankruptcy Law or any such state law, or shall have
filed against it, an involuntary petition pursuant to the Bankruptcy
Law or any such state law, and in each such case the same shall not be
dismissed or discharged within sixty (60) days following the entry of
such order or filing; (d) any of the agreements attached as exhibits
hereto shall be in whole or in material part unenforceable; or (e)
there shall exist or occur any event or condition which impairs or is
substantially likely to impair ASPI's ability to repay in a prompt and
timely fashion all principal and accrued interest under this
Agreement, and/or ASPI's ability to perform in a timely manner all
duties and obligations hereunder in strict accordance with the terms
hereof.
6.2 Remedies. Upon the occurrence of an Event of Default, MAN shall
furnish written notice to ASPI, specifying the Event of Default. If
ASPI shall not have cured such alleged Default within ten (10) days in
the event of a failure to make any payment due hereunder or within
twenty (20) calendar days in the event of any other Event of Default,
then, at MAN's option and notwithstanding anything else in this
Agreement to the contrary, (a) all unpaid and outstanding principal
and accrued interest under the Note shall become immediately due and
payable without notice, presentment, demand, protest or notice of
dishonor, all of which are expressly waived by ASPI; (b) the
obligation of MAN to make any further Advances shall immediately cease
and terminate; and (c) MAN shall have all rights, powers and remedies
available under this Agreement or as otherwise provided by law, all of
which rights, powers and remedies may be exercised at any time, or
from time to time, by MAN following such occurrence. All such rights,
powers and remedies of MAN are cumulative and not exclusive and shall
be in addition to any and all other rights, powers and remedies
provided by law or equity.
-3-
<PAGE>
7. Conditions to the Obligations of MAN to Make Advance. The obligation of MAN
to make the first advance hereunder shall be subject to the satisfaction of the
conditions set forth in this Section 8, unless waived by MAN.
7.1 Accuracy of Representations and Warranties of ASPI and Related
Certificate. The representations and warranties of ASPI shall be true
and correct as of the date Advance is made (an "Advance Date") as
though made on and as of such date, ASPI shall have performed all
obligations and complied with all covenants required to be performed
or to be complied with by ASPI under this Agreement on or prior to
each Advance Date.
7.2 No Pending or Threatened Legal Action. No order, injunction, decree or
other action or legal, administrative, arbitration or other proceeding
or investigation by any governmental organization shall be pending or
threatened, challenging or imposing a material limitation on the
execution, delivery or performance of this Agreement, the consummation
of any of the transactions contemplated hereby or the operation by
ASPI of its business as now conducted or as presently proposed to be
conducted.
7.3 Proceedings and Documents. All proceedings taken in connection with
the transactions contemplated hereby and all documents incident to
such transactions shall be reasonably satisfactory in form and
substance to MAN and its counsel.
7.4 No Material Adverse Change. There shall have been no Material Adverse
Change.
8. Extension.
8.1 Extension. This Agreement may be extended by further written agreement
of the parties.
8.2 Automatic. This Agreement will automatically terminate upon the
occurrence of an Event of Default as set forth in Section 6.2.
Notwithstanding anything else in this Agreement to the contrary, upon
automatic termination hereunder, all unpaid and outstanding principal
and accrued interest under the Note shall become immediately due and
payable without notice.
9. Indemnification.
9.1 Indemnification. ASPI hereby indemnifies MAN and/or its Affiliates,
(collectively the "MAN Indemnified Parties" and each individually an
"MAN Indemnified Party") against, and agrees to hold the MAN
Indemnified Parties harmless from, and to defend the MAN Indemnified
Parties against, any and all damages (as defined below) incurred or
suffered by the MAN Indemnified Parties arising out of any
misrepresentation, inaccuracy or MAN on in any representation or
warranty made by ASPI under this Agreement. Promptly after receipt by
an MAN Indemnified Party of notice of the commencement of any action
such party will, if a claim in respect thereof is to be made against
an MAN Indemnified Party under this Section 9, notify ASPI in writing
of the commencement thereof. In case any such action is brought
against an MAN Indemnified Party and such MAN Indemnified Party
notifies ASPI of the commencement thereof, ASPI will be entitled to
participate therein.
9.2 Cumulative Remedy. The indemnity provided by this Section 10 is in
addition to any other rights or remedies which the MAN Indemnified
Parties or their successors or assigns may have at law or in equity on
account of, or with respect to, any of the matters covered by this
Section 10, or any other Section based upon any other representations,
warranties or covenants or agreements set forth in this Agreement.
-4-
<PAGE>
10. Definitions.
10.1 "Affiliate" means, with respect to any Person: (A) any Person who is
an "affiliate" of such Person as defined in Rule 12b-2 of the United
States Securities Exchange Commission under the United States
Securities and Exchange Act of 1934, as amended, (B) any Person who is
a director, officer or partner or holds a similar position with any
entity in which such Person has a 10% or greater equity or profit
interest, and (C) any family member of a person referred to in (A) or
(B).
10.2 "Contractual Obligation" means, in respect of any Person, any
agreement or instrument, written or oral, to which such Person is a
party or by which it or any of its properties or assets are bound,
including, without limitation, (i) any charter, bylaw, trust
instrument, indenture or evidence of indebtedness and (ii) any lease,
contract, guarantee, indemnity or other obligation or commitment
either by the Person or by any other person which relates to the
property, assets, obligations or commitments of the Person.
10.3 "Damages" as used herein shall mean any and all claims, actions,
demands, losses, costs, expenses, liabilities, damages and recoveries
to the full amount of the actual damage occasioned by each deficiency,
misrepresentation, inaccuracy, omission or breach in each case
including interest, penalties or other damage (including, without
limitation, reasonable attorneys' fees and other costs and expenses
reasonably incurred in investigating or in attempting to avoid the
same or oppose the imposition thereof or of enforcing this indemnity).
10.4 "Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization, Government or
Governmental body.
11. Notices. All notices, requests, demands, deliveries and other
communications hereunder shall be in writing and, except as otherwise
specifically provided in this Agreement, shall be deemed to have been duly
given, upon receipt, if delivered personally or via fax, or ten business days
after deposit in the mail, if mailed, first class with postage prepaid
(confirmed by telex if the addressee is in a country other than that of the
sender) to the parties at the following addresses:
If to ASP:
ASPI EUROPE, INC.
Attention: Patrick McGrath
Two Union Square
601 Union Square, Suite 4200
Seattle, WA 98101
If to the MAN:
MANHATTAN INVESTMENTS INCORPORATED
P.O. BOX 691
1215 Geneva 15
Switzerland
Any of the parties hereto may, from time to time, change its address for
receiving notices by giving written notice thereof in the manner outlined above.
-5-
<PAGE>
12. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13. Entire Agreement. This Agreement and the other agreements entered into in
connection herewith supersede all prior negotiations and agreements (whether
written or oral) and constitute the entire understanding among the parties
hereto.
14. Successors. This Agreement shall inure to the benefit of and be binding
upon the parties named herein and their respective successors and assigns.
15. Headings. The section headings contained in this Agreement are for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Agreement.
16. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of Bermuda applicable to Agreements to be entered into and
entirely performed within such jurisdiction.
17. Delay, Etc. No delay or omission to exercise any right, power or remedy
accruing to any party hereto shall impair any such right, power or remedy of
such party nor be construed to be a waiver of any such right, power or remedy
nor constitute any course of dealing or performance hereunder.
18. Costs and Attorneys' Fees. If any action, suit, arbitration proceeding or
other proceeding is instituted arising out of this Agreement, the prevailing
party shall recover all of such party's costs, including, without limitation,
the court costs and reasonable attorneys' fees incurred therein, including any
and all appeals or petitions therefrom.
19. Further Assurances, etc. From the date hereof, the parties will cooperate
with one another in order to effectuate the transactions contemplated hereby
and, in that regard, will execute and deliver such instruments, documents and
further assurances as the other party from time to time may reasonably request.
20. Waiver and Amendment. Any of the terms and provisions of this Agreement may
be waived at any time by the party which is entitled to the benefit thereof, but
only by a written instrument executed by such party. This Agreement may be
amended only by an agreement in writing executed by MAN and ASPI. 1.
21. Assignment. Neither this Agreement nor any right pursuing hereto or
interest herein shall be assignable by either of the parties hereto without the
prior written consent of the other party hereto.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement as of the date first above written.
ASPI EUROPE, INC.
By: /s/ Patrick McGrath
------------------------------------
MANHATTAN INVESTMENTS INCORPORATED
By: /s/ David Craven
-------------------------------------
-6-
<PAGE>
EXHIBITS
Exhibit A Promissory Note
<PAGE>
EXHIBIT A
PROMISSORY NOTE
up to US$125,000 May 17, 2000
In consideration of such loan or advance ("Advance") as MANHATTAN
INVESTMENTS INCORPORATED, a Nevis Corporation ("MAN"), makes hereon to or for
the benefit or at the request of ASPI EUROPE, INC., a Florida corporation (the
"Maker"), the Maker hereby promises to pay on or before August 31, 2000 (the
"Maturity Date") to MAN, or order (the "Holder"), in lawful money of the United
States of America, all Advances, plus interest thereon, at the rate hereinafter
provided.
The unpaid principal balance hereon is One Hundred and Twenty-Five Thousand
United States Dollars $125,000 ("Maximum Principal Amount").
Interest on this note shall accrue at a per annum rate of ten percent
(10%). The outstanding principal amount of this Note, together with unpaid
accrued interest thereon, shall be due and payable in full on or before the
Maturity Date.
This Note shall, at the option of the Holder, become immediately due and
payable, without notice or demand, and MAN 's obligation to make advances to the
Maker shall, without notice or demand, terminate, upon an Event of Default or as
otherwise provided in the Credit Facility Agreement.
The Maker may, from time to time, prepay this Note either in full or in
part, without penalty.
The Maker and all endorsers and guarantors hereof, if any, severally waive
diligence and the right to plead any statute of limitations, presentment, grace,
protest and demand, and also notice of protest, demand, dishonor and nonpayment
of this Note, and notice of intention to accelerate the maturity date, and any
and all moratorium, appraisement, exemption and homestead rights now provided or
which may hereafter be provided by any federal or state statute both as to
itself personally and as to all of its or their property, whether real or
personal, against the enforcement and collection of the obligations evidenced by
this Note and any and all extensions, renewals and modifications hereof. The
Maker, and every endorser or guarantor of this Note, regardless of the time,
order or place of signing, hereby assents to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange or
release of collateral, and to the addition or release of any other party or
person primarily or secondarily liable with respect to the obligations evidenced
by this Note. No delay or omission on the part of the Holder in exercising any
right or remedy under this Note shall operate as a waiver of such right or of
any other right of such Holder, nor shall any delay, omission or waiver on any
one occasion be deemed to constitute the waiver of the same or of any other
right on any future occasion. Time is of the essence of each and every provision
herein.
Upon failure of the Maker to perform or to pay, in full, any obligation of
the Maker under this Note, or any instrument securing this Note, as and when
such performance or payment shall become due, then at the option of the Holder,
upon demand but without any advance notice being required, the principal balance
of this Note together with all accrued interest thereon, plus all other amounts
payable at the time of such demand pursuant to this Note, or any instrument
securing this Note, shall become immediately due and payable in full or as to
any portion designated by the Holder. Failure to exercise the foregoing option
(or any other right or remedy provided herein in any instrument securing this
Note, or at law) upon any default of the Maker shall
<PAGE>
not constitute waiver of the right to exercise the same or any other option,
right, or remedy at any subsequent time in respect of the same event or any
other event of default, and the Maker and each endorser and each guarantor
hereof hereby expressly waive the benefit of every statute or rule of law or
equity which would produce a result contrary to or in conflict with the
foregoing.
The acceptance by the Holder of any payment hereunder which is less than
payment in full of any amount due and payable by the time of such payment shall
not constitute a waiver of the right to exercise any option, right, or remedy at
that time or at any subsequent time, nor shall it nullify any prior exercise of
any such option, right, or remedy without the express written consent of the
Holder.
All agreements between the Maker and the Holder are expressly limited so
that in no contingency or event whatsoever, whether by reason of payment of
extension or loan or commitment fees, of advancement of proceeds, acceleration
of maturity of the unpaid principal balance hereof or otherwise, shall the
amount paid or agreed to be paid to the Holder for the use, forbearance or
detention of the principal amount hereof exceed the maximum legal rate
permissible under any law which a court of competent jurisdiction may deem
applicable hereto. If, from any circumstance whatsoever, fulfillment of any
provision of this Note or any instrument securing this Note, at the time
performance of such provision shall be due, shall involve transcending the
maximum legal rate of interest prescribed by law which a court of competent
jurisdiction may deem applicable hereto or thereto, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such maximum rate,
and if from any circumstance the Holder shall ever receive as interest an amount
which would exceed said maximum legal rate, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance due
hereunder and not to the payment of interest; to the extent that such excessive
amount exceeds the unpaid principal balance hereon, the Holder shall refund it
to the Maker. In determining whether excessive interest would be charged hereon,
to the extent permitted by applicable law all sums paid or agreed to be paid to
the Holder for the use, forbearance, or detention of the indebtedness evidenced
hereby outstanding from time to time shall be prorated, amortized, allocated and
spread from the date of disbursement of the proceeds of this Note until payment
in full of the unpaid principal sum so that the actual rate of interest on
account of such indebtedness is uniform throughout the term hereof.
The Maker and the Holder intend that all of the provisions hereof shall be
valid and enforceable as specifically set forth herein. If any provision hereof
is declared to be invalid or unenforceable, it is the intention of the Maker and
the Holder that the remainder of this document, or, if applicable, the remainder
of the invalid or unenforceable clause, sentence, or paragraph, shall be valid
and enforced to the fullest extent permitted.
The Maker agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, incurred by the Holder in enforcing the obligations
of the Maker under this Note.
Subject to and upon compliance with the provisions hereof, the Holder of
the Promissory Note shall have the right, at such Holder's option, at any time
prior to notice of prepayment, to convert all or any part of the principal
amount, and related accrued interest, of such Promissory Note into Common Stock
at the price of 80% of the closing market value of the Common Stock on the day
the Company receives notification of conversion. For twelve months following
conversion, the Holder will be notified not later than thirty (30) days prior to
an anticipated filing with the Securities and Exchange Commission of a
registration statement, excluding a Form S-8. Subject to any restriction imposed
by any underwriter of such offering, the Holder will have the opportunity to be
included in such registration statements equal to the amount of Common Stock
issued upon conversion.
This Note may not be changed orally but only by an agreement in writing
signed by the party against whom such change is sought to be enforced.
<PAGE>
IN WITNESS WHEREOF, the Maker has executed and delivered this Note as of
the date first above written.
ASPI EUROPE, INC.
By: /s/ Patrick McGrath
------------------------------------
Title: Chief Financial Officer
MANHATTAN INVESTMENTS INCORPORATED
By: /s/ David Craven
------------------------------------
Title: Director
