EXHIBIT 10.4
Restated and Amended Funding Agreement and Secured Revolving Credit
Agreement between Teakwood Ventures, LLC and orbitTRAVEL.com
Corporation
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RESTATED AND AMENDED FUNDING AGREEMENT AND
SECURED REVOLVING CREDIT AGREEMENT
AGREEMENT, dated as of October 27, 2000 between Orbitravel.com Corporation,
a Delaware corporation (the "Company") and Teakwood Ventures, LLC, a Delaware
limited liability company ("you" or "Teakwood").
1. Authorization of Notes; Warrants. In order to finance the working
capital requirements of the Company, Company has duly authorized the issue and
sale of (a) its common stock in the aggregate amount of $750,000 representing
the purchase price for 19.8% of the outstanding common stock of the Company
calculated on a fully diluted basis with anti-dilution rights (b) its secured
revolving credit note (the "Secured Revolving Credit Note") in the aggregate
principal amount of up to $750,000 from time to time outstanding, evidencing
Revolving Loans made pursuant to Section 2, in the form of Exhibit A hereto and
(c) its Common Stock Purchase Warrant in the form attached hereto as Exhibit B
(the "Warrant") for the purchase of up to 20% of the outstanding common stock of
the Company calculated on a fully diluted basis at a no pay exercise price.
2. Security Agreement. As security for the obligations of the Company under
this Agreement, and to further induce Teakwood to enter into this Agreement, the
parties shall enter into the Security Agreement, Financing Statement and
Assignment Agreement (the "Security Agreement") attached hereto as Exhibit C.
3. Borrowings Under Revolving Notes.
3A. Revolving Loans. You agree, on and subject to the terms and conditions
set forth herein, to make loans (each a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Company in the aggregate principal amount of
$1,500,000 on the following dates (each, a "Funding Date" and in the following
bi-weekly amounts with half of each amount being attributed to a Revolving Loan
and the other half being attributable to an equity contribution):
(i) the principal amount of $355,000 upon the due execution of this
Agreement by both Parties (the "Initial Funding Date"); provided, however, that
the Company acknowledges the prior extension of credit to the Company by
Teakwood prior to the execution of this Agreement in the aggregate principal
amount of $345,000 respectively, half of which (namely $172,500) shall be deemed
to be an outstanding Revolving Loan of Teakwood to the Company and the other
half of which shall be deemed an equity contribution hereunder and subject to
the terms of this Agreement.
(ii) the principal amount of $200,000 on the 15th day of November ("Second
Funding Date");
(iii) the principal amount of $200,000 on the 30th day of November ("Second
Funding Date");
(iv) the principal amount of $200,000 on the 1st day of December ("Third
Funding Date");
(v) the principal amount of $200,000 on the 15th day of December ("Fourth
Funding Date");
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(v) Teakwood has the unilateral right to extend the Fourth Funding Date
until January 15, 2001 if the Company has raised debt and/or equity funding from
other sources by the Fourth Funding Date so that the Company is able to meet
budget requirements for the subsequent 30 day period.
3B. Secured Revolving Credit Note. The Revolving Loans made by you shall be
evidenced by a single Secured Revolving Credit Note, to be issued to you on the
date of the initial Revolving Loan, and to have a principal amount of $750,000.
At the time of making of each Revolving Loan and at the time of the making of
each payment of principal in respect of a Revolving Loan, you shall make a
notation on Schedule I of such Secured Revolving Credit Note, specifying the
date and the amount of the related Revolving Loan or payment, as the case may
be, provided that your failure to do so shall not limit or otherwise affect any
obligation of the Company under this Agreement or any payment of principal of or
any interest on any Secured Revolving Credit Note. If necessary to evidence any
change in the provisions of this Agreement relating to the Secured Revolving
Credit Note and if agreed to in writing by you and the Company, the Company
shall furnish a new Secured Revolving Credit Note to you in substitution for
Secured Revolving Credit Note previously issued.
3C. Manner of Borrowings. The Revolving Loan made on each Funding Date
shall be $100,000 except for the Initial Funding Date which shall be $177,500
and shall be made on a business day in integrals of $1,000 and shall be on
notice, given no later than 11:00 a.m. (Eastern time) on the business day before
the date on which the proposed Revolving Loan is to be made, by the Company to
you. Each such notice may be by telecopier or e-mail, which shall be confirmed
by telephone, specifying the amount of the proposed Revolving Loan and the
requested date thereof and the account of the Company to which the proceeds of
such Revolving Loan shall be credited. On each Funding Date, upon receipt of
notice as herein provided, and upon satisfaction of the conditions set forth in
Section 3F and the other conditions in this Agreement, you shall make available
to the Company in immediately available funds (provided that the conditions have
been satisfied at or before the close of business on the preceding day), the
proceeds of such Revolving Loan.
3D. Interest on Revolving Loans. The unpaid principal amount of each
Revolving Loan shall bear interest from the date of borrowing to the date of
payment thereof calculated in respect of each period at a rate per annum equal
to 12%.
3E. Repayment of Revolving Loans. The Company may from time to time, at its
option, prepay the outstanding amount of the Revolving Loans in whole or in
part. In the case of each prepayment under this paragraph, the principal amount
of the Revolving Loans to be prepaid shall mature and become due and payable on
the date fixed for such prepayment, together with interest on such principal
amount accrued to such date, without premium or penalty. Notwithstanding the
foregoing, the outstanding principal amount of the Revolving Loans shall mature
and become due and payable on June 30, 2001(with a maximum cure period for
non-payment until August 14, 2000), together with interest on such principal
amount accrued to such date, without premium or penalty, unless otherwise
extended by you as more fully set forth in the Security Agreement and the rate
of even date herewith.
3F. Conditions to Revolving Loans. Your obligation to make a Revolving
Loans on the applicable Funding Date and any subsequent Funding Dates set forth
herein in Section 3A is subject to the satisfaction of the following conditions
on the respective dates as shown below:
(1) the Company shall not be in breach of any of its obligations hereunder
as determined in the sole discretion of Teakwood;
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(2) the Company shall have executed and delivered its Warrant to purchase
20% of the shares of the Company's common stock in the form attached hereto as
Exhibit B in accordance with the terms set forth in Section 1 hereof;
(3) if requested by the Company, the Company shall have taken all necessary
corporate action to elect two of Teakwood's appointees to the Company's Board of
Directors which shall be no greater than five members at any time and the
Parties shall mutually agree on the fifth director;
(4) the Company shall keep its expenditures at all times within the budget
as attached hereto as Exhibit D (the "Budget") and shall provide you with weekly
detailed reports on all expenditures with a comparison with the Budget. Such
Budget shall not exceed the amount of funding hereunder unless otherwise agreed
by both parties; and
(5) the Company shall provide you upon signing of this Agreement with an
opinion of McLaughlin Stern reasonably satisfactory to you that the Company is
current in its SEC reporting requirements.
(6) the Company shall enter into a letter of intent by December 15, 2000
with XXXX providing that the Company shall act as XXXX official travel agent for
XXXX and shall have exchanged drafts for such agreement between them by December
15, 2000 with copies of such documents to be provided by the Company to you by
such dates.
(7) the Company shall enter with XXXX and XXXX into a letter of intent by
November 15, 2000 and shall have exchanged draft agreements by December 15, 2000
for joint content distribution and joint revenue sharing by the Company with
XXXX and XXXX with copies of such documents to be provided by the Company to you
by such dates.
(8) The Company shall use its best efforts to reach an agreement with
Savoretti to convert his consulting agreements to common stock in the amount of
$700,000 for an equity interest of 2% with anti-dilution provisions and
terminate his security interest against the Company with a settlement amount of
no more than $583,250 payable in quarterly equal amounts (the "Settlement
Amount"). Said settlement agreement shall also provide that Savoretti will
terminate and release his security interest against the Company upon payment of
the Settlement Amount.
(9) the Company shall use its best efforts to reach an agreement with the
Orbit Network and Divot Golf/Orbit Travel equity and debt holders to settle all
their claims against the Company and/or its subsidiaries by November 30, 2000 in
a manner satisfactory to you, and agree to invest by November 30, 2000 a minimum
of $500,000 in the Company by said date.
(10) the Company and David Noosinow shall agree that Noosinow will defer
his severance compensation until December 31, 2000 or until such time as he has
raised at least $895,000 as paid in capital from the Orbit Network equity and
debt holders at which time the Company shall pay out from the proceeds of said
working capital the full severance.
(12) the Company shall close the New York, New York office by September 31,
2001 and will immediately reduce expenses by either the greater of 15% or actual
savings by subletting all or a portion of the New York office premises.
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(13) the Company shall file the registration statements by November 30,
2000, to register in accordance with SEC requirements all stocks it is currently
obligated to register including stock issued to Europe Corporation, Global
Systems and Cambridge and shall use its best efforts to have said registration
statement declared effective on or before February 28, 2001.
(14) The Company shall sign up at least 2 customers per month each
representing at least $5,000 in revenue annually.
(15) the Company will not enter into any employment agreements without your
consent except as otherwise provided for XXXXX and Robert Gilbert which
contracts shall be subject to Teakwood's prior written approval.
(16) the Company will implement a program to sell classified travel ads by
November 14, 2000.
(17) the Company shall issue two (2) press releases each month provided
corporate developments warrant such releases.
(18) the Company shall hire two (2) information technology and two (2)
production personnel by November 30, 2000.
(19) the Company shall deposit all funding received from you under this
Agreement in a bank account with operational controls to be mutually agreed with
you, which will provide for your prior written approval by you on any payments
over $10,000. All checks or other money transfers by the Company must be
co-signed by Joseph R. Cellura and Robert Gilbert, assuming he has been hired by
the Company.
(20) the Company shall provide you immediately upon your request of proof
reasonably satisfactory to you of its compliance with each of the foregoing.
(21) the Company and you shall agree on preliminary budgets for the Company
during the term of this Agreement subject to final review and agreement at least
5 business days in advance of any Funding Date for each period following the
respective Funding Date except for the budget for the $355,000 to be advanced on
the initial Funding Date as attached as a schedule hereto.
(22) The Company shall enter into an Employment Agreement with Robert
Gilbert in a form acceptable to the Company by November 1, 2000 under which he
will act as President of the Company.
3G. Optional Reduction. Upon prior written notice to you at any time, the
Company shall have the right to reduce or terminate the unused portion of the
commitment to make Revolving Loans hereunder, effective at any time, which
notice shall specify the effective date of such termination or reduction and the
amount thereof (which shall be in an amount of at least $1,000). On any date on
which the commitment shall be so reduced or terminated pursuant hereto, the
Company shall forthwith prepay the Revolving Loans to the extent that the
aggregate principal amount of the commitment exceeds the aggregate principal
amount of the Revolving Loans permitted to outstanding pursuant to paragraph 3A.
In addition, the Company may from time to time, at its option, upon prior
written notice to you, prepay the outstanding amount of the Revolving Loans in
whole or in part. In the case of each prepayment under this paragraph, the
principal amount of the Revolving Loans to be prepaid shall mature and become
due and payable
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on the date fixed for such prepayment, together with interest on such principal
amount accrued to such date, without premium or penalty.
4. Default. If any of the following events of default (with the exception
of the events of default described on Exhibit D hereto) shall occur:
a) Any representation or warranty made by the Company in this Agreement
and/or the Security Agreement or in any request or certificate of the
Company furnished Teakwood hereunder shall prove to have been incorrect in
any material respect; or
(b) The Company shall default in the payment, when due, of any principal
of or interest on the Revolving Loans or the Secured Revolving Credit Note
or any other sum payable by the Company under this Agreement; or
(c) The Company shall default in the performance of any other obligation
to be performed by it contained herein, or in the Security Agreement or
Secured Revolving Credit Note; or
(d) Any indebtedness for money borrowed, for which the Company or any
subsidiary or any guarantor of the Company's obligations to Teakwood is
liable, as principal obligor, guarantor, or otherwise, is not paid at its
stated maturity or is declared or otherwise becomes due and payable prior
to its stated maturity; ok we are already in breach and default of a
variety of settlements and obligations which will be scheduled for exhibit
to this agreement; or
(e) Any event of default as defined in any loan or similar agreement to
which the Company, any subsidiary or any such guarantor is now or
hereafter a party, or any other event thereunder or upon the occurrence of
which any holder or holders of indebtedness outstanding thereunder may
declare the same due and payable, shall occur and shall continue for more
than the period of grace, if any, provided therein; or
(f) Any such guarantor shall terminate or revoke his, her, or its guaranty
or shall take any action to terminate or revoke same; or
(g) The Company or any of its subsidiaries or any such guarantor shall (i)
terminate or suspend the operation of any portion of his, her, or its
business as presently conducted; (ii) apply for or consent to the
appointment of a receiver, trustee, or liquidator of himself, herself, or
itself, or of all or a substantial part of his, her, or its assets; (iii)
be unable, or admit in writing his, her, or its inability to pay his, her,
or its debts as they full due; (iv) make a general assignment for the
benefit of his, her, or its creditors; (v) be adjudicated a bankrupt or
insolvent; or (vi) file a voluntary petition in bankruptcy or a petition
or an answer seeking reorganization or an arrangement with creditors or to
take advantage of any insolvency law or an answer admitting the material
allegations of a petition filed against him, her or it in any bankruptcy,
reorganization, or insolvency proceeding, or any action shall be taken by
it for the purpose of effecting any of the foregoing; or
(h) An order, judgment, or decree shall be entered, without the
application, approval, or consent of the Company or any of its
subsidiaries or any such guarantor by any court of competent jurisdiction,
approving a petition seeking reorganization of the Company or any such
subsidiary or guarantor or appointing a receiver, trustee, or liquidator
of the Company or any such subsidiary or any such guarantor or of all or a
substantial part of any of their respective assets; or
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(i)The Company shall in any material respect fail to comply with any
statute, rule, regulation, ordinance, order, or other law or judicial
decree regarding the Company or its premises or assets; or ok but note
that unless we begin immediately on the 3rd quarter we will not make the
November 15, deadline which will result in several other defaults this is
just money; or
(j) Teakwood shall believe that the prospect of payment of the Revolving
Loans and/or the Secured Revolving Credit Note or the performance of any
of the Company's obligations under this or any other agreement with
Teakwood is impaired;
then, and in any such case, Teakwood may declare the principal of and
interest accrued on the Secured Revolving Credit Note to be forthwith due
and payable, whereupon the same shall become forthwith due and payable
and/or Teakwood may (i) immediately terminate its commitment hereunder
and/or (ii) declare the principal of and interest accrued on all of the
said note to be forthwith due and payable, whereupon the same shall become
forthwith due and payable, without presentment, demand, protest, or other
notice of any kind, all of which are hereby waived by the Company.
5. Affirmative Covenants of the Company. The Company covenants and agrees
that for so long as any indebtedness under this Agreement shall be outstanding:
5A. Accounting. As soon as practicable and in any event prior to November
30, 2000, a detailed statement in form and substance satisfactory to Teakwood
specifying the use of proceeds of the sum of $2,735,000 realized from
investments and/or loans by Teakwood prior to the date hereof. The Company's
independent auditors report will substantiate all money spent in the traditional
management letter.
5B. Judgment Creditors. The Company shall have prepared and delivered a
true and complete copy of all judgment creditors of the Company and all third
parties making claims or threatening litigation against the Company which shall
be confirmed by the Company's auditors in connection with the annual audit and
detailing the amount and nature of each claim or judgment upon signing this
Agreement.
5C. Travel File. As soon as practicable and in any event prior to November
10, 2000, The Company shall provide to Teakwood a letter from Savoretti
confirming that the Company has the right to use and operate on sufficiently
commercially advantageous terms Orbit Network's GDS contracts, including without
limitation, the "TravelFile" website that provides travel suppliers and Internet
users travel planning services, with Amadeus, Sabre, Galileo and World Span, its
services agreement with America Online and related furniture and equipment.
5D. Ordinary Course. The business of the Company and its subsidiaries shall
be conducted only in the ordinary and usual course and consistent with past
practice and, to the extent consistent therewith, each of the Company and its
subsidiaries shall use its best efforts to preserve its business organization
intact and maintain its existing relations with customers, suppliers, licensees,
employees and other business associates.
5E. No Sale of Stock. Without your prior written consent not to be
unreasonably withheld, Company shall not (i) sell or pledge or agree to sell or
pledge any stock owned by it in any of its subsidiaries; (ii) amend its
Certificate of Incorporation or Bylaws; (iii) split, combine or reclassify the
outstanding common stock of the Company; (iv) declare, set aside or pay any
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dividend payable in cash, stock or property with respect to the common stock; or
(v) adopt a plan of liquidation.
5F. No Pledge. Without your prior written consent, neither the Company nor
any of its subsidiaries shall (i) issue, sell, pledge, dispose of or encumber
any additional shares of, or securities convertible or exchangeable for, or
options, warrants, calls, commitments or rights of any kind to acquire, any
shares of capital stock of any class of the Company or its subsidiaries other
than, in the case of the Company, common stock issuable pursuant to options
outstanding on the date hereof; (ii) transfer, lease, license, sell, pledge,
dispose of or encumber any significant assets other than in the ordinary and
usual course of business; or (iii) acquire directly or indirectly by redemption
or otherwise any shares of the capital stock of the Company.
5G. Director Compensation. Neither the Company nor any of its subsidiaries
shall establish, adopt, enter into, or make any new grants or awards under or
amend, any collective bargaining, bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any directors, officers or employees other
than the grants made pursuant to an Orbit 2000 Stock Option Plan which plan is
to be approved by the Company's shareholders.
5H. Settlement of Litigation. Neither the Company nor any of its
subsidiaries shall settle or compromise any material claims or litigation or,
except in the ordinary and usual course of business, modify, amend or terminate
any of its material contracts or waive, release or assign any material rights or
claims without Teakwood's prior written consent.
5I. Indebtedness. Neither the Company nor any of its subsidiaries shall
incur any indebtedness for money borrowed or use or sell any debt securities, or
assume, guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other individual or entity, or make any loans or
advances, other than in the ordinary course of business consistent with past
practices without your prior written consent.
5J. Investments. Neither the Company nor any of its subsidiaries shall
acquire (by merger, consolidation or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof or
make any material investment either by purchase of stock or securities,
contributions to capital, property transfer or purchase of any material amount
of property or assets, in any other individual or entity without your prior
written consent.
5K. Acquisition Proposals. Without Teakwood's prior written consent, the
Company and its subsidiaries, respective officers and directors of the Company
or any of its subsidiaries (including without limitation, any investment banker,
attorney or accountant retained by the Company or any of it subsidiaries) will
not initiate or solicit, directly or indirectly, any inquiries or the making of
any proposal with respect to a merger, consolidation, recapitalization or
similar transaction involving, or any purchase of all or any significant portion
of the assets or, or any equity interest in, the Company or any of its
subsidiaries (an "Acquisition Proposal") or , except to the extent required,
based upon the advice of counsel, under applicable law for the discharge by the
Board of Directors of its fiduciary duties, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any person relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal.
The Company will immediately advise Teakwood of any existing activities,
discussion or negotiations with any third parties conducted heretofore with
respect to any of the foregoing. The Company will notify Teakwood immediately if
any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or
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discussions are sought to be initiated or continued with the Company.
Exhibit E attached hereto describes all such active proposals, discussions
and/or negotiations all of which Teakwood consents to.
5L. Access. Upon reasonable notice, the Company shall (and shall cause each
of its subsidiaries to) afford Teakwood's officers, employees, counsel, and
accountants access, during normal business hours, to all of its properties,
books, contracts and records and to make copies thereof and, during such period,
the Company shall (and shall cause its subsidiaries to) furnish promptly to
Teakwood all information concerning its business, properties and personnel as
Teakwood may request.
5M. Security Agreement. The Company, at its expense, shall cause at all
times the Security Agreement and any instruments amendatory thereof or
supplemental thereto and any instruments of assignment thereof (and any
appropriate financing statements or other instruments and continuations thereof
with respect to any thereof) to be recorded, registered and filed and to be kept
recorded, registered, and filed in such manner and in such places, and will pay
all such recording, registration, filing fees and other charges, and will comply
with all such statutes and regulations as may be required by law or as may be
reasonably required by Teakwood, in order to establish, preserve, perfect and
protect the lien of the Security Agreement as a valid, direct, first Security
Agreement line on and first priority perfected security interest in the
collateral thereunder.
5N. Budgets The Company shall not deviate from any budgets as agreed upon
with Teakwood.
5O. Miscellaneous. Neither the Company nor any of its subsidiaries will
enter into an agreement to do any of the foregoing.
6. Representations of the Company. The Company represents and warrants to
Teakwood as follows:
6A. Organization, Good Standing and Qualification . The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has full corporate power and authority to
own and hold its properties and to conduct its business. The Company is duly
licensed or qualified to do business, and in good standing, in each jurisdiction
in which the nature of its business requires such licensing, qualification or
good standing, except for any such failure to be so licensed or qualified or in
good standing that would not have a material adverse effect on the Company or
its results of operations, assets, or financial condition or on its ability to
perform its obligations under this Agreement.
6B. Capitalization. The capitalization of the Company as of the date hereof
is set forth on Schedule 6(b) attached hereto. The Company further represents
and warrants that, in consideration for good and valuable consideration received
from Teakwood prior to the date hereof, the Company issued to Teakwood and/or
companies related to Teakwood 112,000,000 shares of its Common Stock (the
"Teakwood Stock"). The Teakwood Stock was fully paid and nonassessable and
subject to no liens at the time of the issuance thereof. The Teakwood Stock has
anti-dilution rights so that the Company will issue such additional shares of
common stock to Teakwood free of charge to maintain at all times the 13.25%
ownership of the Company's common stock represented by the Teakwood Stock at the
current time.
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6C. Corporate Power, Authorization; Enforceability. The Company has all
requisite corporate power and authority to execute and deliver, and to perform
its obligations under this Agreement and each of the agreements contemplated
hereunder (collectively, the "Operative Agreements"), and has taken all
necessary corporate and stockholder action to authorize the execution, delivery
and performance of the Operative Agreements by the Company subject to
shareholders approval for issuance of 20% or more of the Company's stock which
shall include all stock previously issued to Teakwood. In the event this is not
approved, all other terms of this Agreement shall remain in full force and
effect. In the event such approval is not obtained, Company represents and
warrants that this does not affect Teakwood's ownership of the stock already
issued to Teakwood or to be issued to Teakwood pursuant to this Agreement, the
Secured Revolving Credit Note, or the Warrant. Each of the Operative Agreements
has been duly executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company enforceable against the Company in
accordance with their respective terms. The execution, delivery and performance
of this Agreement and each of the Operative Agreements, and compliance with the
provisions hereof by the Company will not (i) violate any law or statute or
order, judgment or decree of any court, administrative agency or other
governmental body applicable to the Company or its properties or assets, (ii)
conflict in any respect with or result in any breach of any of the terms or
provisions or constitute (with due notice or lapse of time, or both) a default
under the Certificate of Incorporation or By-laws of the Company, (iii) result
in a breach or violation of, or a default under, or acceleration of any
obligations pursuant to any note, indenture, Security Agreement, lease,
agreement, contract, understanding, arrangement or instrument ("Contracts") to
which the Company is a party or by which it or any of its properties or assets
may be bound or affected, (iv) result in any change in the rights or obligations
of any party under the Contracts, or (v), excepted as contemplated by the
Security Agreement in favor of Teakwood, result in the creation or imposition of
any lien, charge, restriction, claim or encumbrance of any nature whatsoever
upon any of the properties or assets of the Company.
6D. No Litigation. Except as set forth on Schedule 6D attached hereto,
there are no actions, suits, proceedings or investigations pending nor, to the
best knowledge of the Company, threatened against the Company by or before any
court or governmental agency. There is no lawsuit or claim by the Company
pending, or which the Company intends or reasonably expects to initiate, against
any other person or entity.
6E. Payment of Taxes. The Company has filed all tax returns and paid all
taxes shown thereon to be due, if any, that are required to have been filed on
or before the date hereof or the Conversion Date, as applicable, with
appropriate Federal, state, foreign, county and local governmental agencies or
instrumentalities, except where the failure to do so would not have a material
adverse effect upon the business of the Company.
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7. Notices. All notices required by this agreement shall be sent by
certified mail, return receipt requested, postage prepaid. Until such time as
notice of a new address is received by each of the parties, the following
address shall constitute the addresses for purposes of notice hereunder:
If to the Company: OrbitTRAVELcom Corporation
One Union Square South 10-J
New York, New York 10003
Telephone: 212-353-8468
with a copy to: Richard J. Blumberg, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue
New York, New York 10016
Telephone: 212-448-1100
If to the Lender: Teakwood Ventures, LLC
276 5th Avenue--Suite 603
New York, NY 10001
with a copy to: Paul C. Homsy, Esq.
Zevnik Horton Guibord McGovern
Palmer & Fognani, L.L.P.
1330 Avenue of the Americas, 11th Floor
New York, NY 10019
8. Funding Commitment Letter. The Company acknowledges that Teakwood has
purchased certain Common Stock of the Company in consideration for the sum of
$2,500,000 pursuant to the Funding Commitment Letter and Subscription Agreement
(the "Commitment Letter"), dated February 15, 2000 between the Company and
Teakwood. Company hereby confirms that Teakwood is not obligated to extend the
remaining $7,500,000 in financing provided for under the terms of the Commitment
Letter.
9. Breach by Teakwood. In the event of a breach by Teakwood of its funding
requirements under this Agreement and such breach is not cured within 5 days of
its occurrence, Teakwood's liability will not exceed the total unfunded portion
of the $1,500,000 principal amount covered by this Agreement.
10. Publicity. The initial press release with respect to the transaction
contemplated hereby shall be a joint press release and thereafter the Company
and Teakwood shall consult with each other in issuing any press releases or
otherwise making public statements with respect to the transactions contemplated
hereby and in making any filings with any federal or state governmental or
regulatory agency or with any national securities exchange with respect thereto.
Each party shall use its best efforts to enable the other party to review and
consent to all releases prior to release.
11. Miscellaneous. This agreement has been entered into in the State of New
York and the validity, interpretation and legal effect of this agreement shall
be governed by the laws of the State of New York applicable to contracts entered
into and performed entirely within such State.
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The New York courts (state and federal) shall have jurisdiction of any
controversies regarding this, agreement and the parties hereto consent to the
jurisdiction of said courts. This agreement contains the entire understanding of
the parties relating to its subject matter. No change or modification of this
agreement shall be binding upon either party unless made in writing. A waiver by
either party of any provision of this agreement in any instance will not be
deemed to waive it for the future. All remedies, rights, undertakings, and
obligations contained in this agreement shall be cumulative and none of them
shall be in limitation of any other remedy, right, undertaking, or obligation of
either party. In entering into this Agreement, Company and Distributor each have
and shall have the status of an independent contractor and nothing herein shall
contemplate or constitute either party as the agent or employee of the other.
This agreement may be executed in one or more counterparts, each of which shall
constitute an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first written
above.
ORBITTRAVEL.COM CORPORATION
By /s/ Joseph Cellura
TEAKWOOD VENTURES, LLC
By /s/ Aditha Reksono
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Exhibit A
CONVERTIBLE SECURED REVOLVING
CREDIT NOTE
New York, NY
October 26, 2000
1. OrbitTravel.com Corporation, a Delaware corporation ("Company"), for
value received, hereby promises to pay to Teakwood Ventures LLC (the "Lender"),
at the main office of Lender's bank, or at such other place as the Lender shall
designate to the Company in writing, the principal sum of $750,000 or if less,
the aggregate principal amount of all loans (the "Revolving Loans") made by the
Lender to the Company pursuant to the Secured Revolving Credit Agreement
referred to below, in lawful money of the United States of America, on or before
June 30, 2001.
2. The Company also promises to pay to the Lender interest (computed on the
basis of a 360-day year of twelve 30-day months) from and including the first
calendar day upon which any such Revolving Loans are made or outstanding to but
excluding the payment date thereof. Such interest shall be payable (a) at the
time of any prepayment or any required payment of any principal amount of the
Revolving Loans and in the amount accrued on such principal amount to the date
prepayment or payment at a rate per annum (until such principal amount shall
have become due and payable) equal to12% and (b) on any overdue payment of
principal and, to the extent permitted by law, any overdue payment of interest
until paid, at a rate per annum from time to time equal to15% .
3. The Company expressly waives any presentment, demand, protest or notice
in connection with this Note now or hereafter required by applicable law. This
needs to be reworded with Blumberg as it does not fit in the public company
there must be a notice given.
4. This Secured Revolving Credit Note is referred to in and issued pursuant
to the Secured Revolving Credit Agreement, dated the date hereof, between the
Company and Teakwood Ventures, LLC. Reference is made to the secured Revolving
Credit Agreement for a statement of the terms and conditions under which the
principal hereof and accrued interest thereon may become or may be declared to
be forthwith due and payable and may be subject to prepayment.
5. The Company agrees to repay with interest the principal of this on or
before June 30, 2001 under the circumstances and to the extent specified in the
Revolving Credit Agreement. Subject to the terms and conditions of the Secured
Revolving Credit Agreement, the outstanding principal amount of this Note may
become or be declared due and payable in the manner and with the effect provided
for in the Secured Revolving Credit Agreement.
6. Conversion Rights and Anti-dilution
(a) Conversion Privilege. During the period of time commencing on the date
of this Note and continuing until the payment in full of this Note and provided
shareholders have approved the issuance of more than 20% of the Common Stock to
the Lender and/or its associated companies, the Company, at its option in the
event the quoted price for the Company's common stock (the "Common Stock")
reaches 25 cents or above, may convert all or any portion of the outstanding
principal balance of, and all accrued interest on, this Note into the number of
shares of Common
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Stock obtained by dividing (i) the unpaid principal amount of, and interest
through the date of conversion on, this Note to be converted, by (ii) the
Conversion Price which is one cent for each share of Common Stock. After
conversion, the Company shall issue no pay Common Stock to the Company so that
the Company shall maintain its stock ownership percentage at the time of
conversion. The Company will exercise best efforts to promptly obtain said
shareholder approval.
(b) Conversion Procedure. To convert this Note pursuant to this SECTION 6,
Lender must notify the Company of such election. As promptly as practicable
after delivery of said election to convert in accordance with this SECTION 6(b),
Company shall issue and deliver to Lender, a certificate or certificates for the
full number of whole shares of Common Stock issuable upon the conversion of this
Note in accordance with the provisions of this SECTION 6. Company shall use its
best efforts to promptly register all shares of Common Stock as freely trading
shares covered by Lender's election to convert.
(c) Cash Payments In Lieu of Fractional Shares. No fractional shares of
Common Stock or scrip representing fractional shares of Common Stock shall be
issued upon conversion of the principal of, or interest on, this Note. If any
fractional share of Common Stock would be issuable upon the conversion of any
portion of this Note, Company shall pay a cash adjustment therefor in respect of
such fractional share equal to the product of (i) the percentage representing
such fractional share multiplied by (ii) the Conversion Price.
(d) Adjustment of Conversion Price. (i) If Company shall (a) pay a dividend
or other distribution, in Common Stock, on any class of capital stock of
Company, (b) subdivide the outstanding Common Stock into a greater number of
shares by any means or (c) combine the outstanding Common Stock into a smaller
number of shares by any means (including, without limitation, a reverse stock
split) (any such event being an "ADJUSTMENT EVENT"), then in each such case the
Conversion Price shall be decreased or increased as follows: the adjusted
Conversion Price shall be equal to the Conversion Price in effect immediately
prior to the effective date of the Adjustment Event, multiplied by a fraction
whose numerator is the number of shares of Common Stock issued and outstanding
immediately prior to such effective date, and whose denominator is the number of
such shares outstanding immediately after such effective date. An adjustment
made pursuant to this SECTION 6(d)(i) shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date of such subdivision or combination, as the case may be; (ii) The
provisions of this SECTION 6(d) shall similarly apply to all successive events
of the type described in this SECTION 6(d). Notwithstanding anything contained
herein to the contrary, no adjustment in the Conversion Price shall be required
unless cumulative adjustments would require an increase or decrease of at least
1% in the Conversion Price then in effect; provided, however, that any
adjustments which by reason of this SECTION 6(d) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 6 shall be made by the Company and shall be
made to the nearest cent. Except as provided in this SECTION 6, no adjustment in
the Conversion Price will be made for the issuance of Common Stock or any
securities convertible into or exchangeable for Common Stock or carrying the
right to purchase Common Stock or any securities so convertible or exchangeable.
(iii) Whenever the Conversion Price is adjusted as provided herein, the Company
shall promptly provide the Lender with written notice of such adjustment setting
forth the Conversion Price in effect after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.
(e) Effect of Reclassification, Consolidation, Merger, or Sale. In the
event of (i) any reclassification (including, without limitation, a
reclassification effected by means of an exchange
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or tender offer by the Company) but excluding a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination, (ii) any consolidation, merger or combination of the
Company with another corporation as a result of which holders of Common Stock
shall be entitled to receive securities or other property (including cash) with
respect to or in exchange for Common Stock or (iii) any sale or conveyance of
the property of the Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive securities or other property (including cash) with respect to or in
exchange for Common Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall enter into an Amended and Restated Note
providing that this Note shall be convertible into the kind and amount of
securities or other property (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
which Company would have received if this Note had been converted immediately
prior to such reclassification, change, consolidation, merger, combination, sale
or conveyance. Such Amended and Restated Note shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this SECTION 6. Whenever an Amended and Restated Note is entered
into as provided herein, Company shall promptly provide the Lender with an
Officer's Certificate setting forth a brief statement of the facts requiring
such Amended and Restated Note. The provisions of this SECTION 6 shall similarly
apply to all successive events of the type described in this SECTION 6.
(f) Taxes on Shares Issued. The issuance of a certificate or certificates
on conversion of this Note shall be made without charge to the Lender for any
tax or charge with respect to the issuance thereof.
(g) Reservation of Shares; Shares To Be Fully Paid, Compliance with
Government Requirements; Listing of Common Stock. Company shall reserve, out of
its authorized but unissued Common Stock or its Common Stock held in treasury,
sufficient shares of Common Stock to provide for the conversion of all of this
Note.
The Company covenants that all Common Stock which may be issued upon
conversion of this Note, will upon issuance, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issuance and delivery thereof. The Company covenants that if any
Common Stock issued or delivered upon conversion of this Note hereunder requires
registration with or approval of any governmental authority under any applicable
federal or state law (excluding federal or state securities laws) before such
Common Stock may be lawfully issued, the Company will in good faith and as
expeditiously as possible endeavor to secure such registration or approval, as
the case may be. Company shall maintain the Common Stock's authorization for
listing on the Nasdaq Over the Counter Market. Company shall not take any action
which may result in the delisting or suspension of the Common Stock on the
Nasdaq SmallCap Market (other than to switch listing from the Nasdaq SmallCap
Market to the Nasdaq National Market or a stock exchange).
(h) Notice To Lender Prior To Certain Actions. In the event that:
(i) Company shall declare or authorize any event which could result
in an adjustment in the Conversion Price under Section 6(D) or
require the execution of an amended and restated Note; or
(ii) Company shall authorize the combination, consolidation or merger
of Company for which approval of any stockholders of the Company
is required, the sale or transfer of all or substantially all of
the assets of the
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Company or the voluntary or involuntary dissolution, liquidation
or winding-up of the Company in whole or in part; then, in each
such case, the Company shall give or cause to be given to Lender,
as promptly as possible but in any event at least 15 days prior
to the applicable date hereinafter specified, a notice stating
the date on which a record is to be taken for the purpose of
determining the holders of outstanding Common Stock entitled to
participate in such event, the date on which such event is
expected to become effective or occur and the date on which it
is expected that holders of outstanding Common Stock of record
shall be entitled to surrender their shares, or receive any
items, in connection with such event. Failure to give such
notice, or any defect therein, shall not affect the legality
or validity of such event.
(i) Proxy Statement. On or before December 15, 2000, (the "PROXY STATEMENT
TRIGGER DATE"), Company shall provide each stockholder entitled to vote at the
next meeting of stockholders of Company, which meeting shall not be later than
forty-five (45) days after the Proxy Statement Trigger Date (the "STOCKHOLDER
MEETING DEADLINE"), a proxy statement, which been previously submitted for
review by Lender, soliciting each such stockholder's affirmative vote (such
affirmative vote being the `REQUIRED STOCKHOLDER CONSENT") at such stockholder
meeting for approval of Company's issuance of all of the Common Stock as
described in this Note (including the approval of issuances at a discount to
market as may be required by the Rules of Nasdaq Stock Market, Inc.), and
Company shall use its best efforts to solicit its stockholders' approval of such
issuance of the Common Stock and cause the Board of Directors of Company to
recommend to the stockholders that they approve such proposal.
This Note is entitled to the benefits of a Security Agreement, dated as of
October 16, 2000 between the Company and Lender.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
ORBITTRAVEL.COM CORPORATION
By /s/ Joseph Cellura
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<PAGE>
Schedule I to Revolving Credit Note
PAYMENT SCHEDULE
Date Amount of Loan Principal Paid Unpaid Principal Notation
or Repaid Made By
__________$180,000_____________________________________________________________
___________$25,000____________________________________________$30,000__________
___________$30,000__________________________________________________$15,000____
___________$_________________________________________________$45,000____________
____________________________________________________________$50,000____________
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EXHIBIT B
THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES,
BLUE SKY OR OTHER APPLICABLE LAWS OF ANY STATE OR ANY OTHER RELEVANT
JURISDICTION, AND MAY NOT BE OFFERED AND SOLD UNLESS (A) REGISTERED AND/OR
QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF U.S. FEDERAL SECURITIES LAWS,
THE SECURITIES BLUE SKY, OR OTHER APPLICABLE LAWS OF ANY STATE, OR OTHER
RELEVANT JURISDICTION OR (B) EXEMPT FROM SUCH REGISTRATION OR QUALIFICATION.
THERFORE, NO SALE, PLEDGE OR OTHER TRANSFER OF THIS SECURITY SHALL BE MADE, NO
ATTEMPTED SALE, PLEDGE OR OTHER TRANSFER OF THIS SECURITY SHALL BE MADE, NO
ATTEMPTED SALE, PLEDGE OR OTHER TRANSFER SHALL BE VALID, AND THE ISSUER SHALL
NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A) SUCH
TRANSACTION SHALL HAVE BEEN DULY REGISTERED UNDER THE SECURITIES ACT AND
QUALIFIED OR APPROVED UNDER THE SECURITIES, BLUE SKY, OR OTHER APPLICABLE LAWS
OF ANY STATE OR OTHER RELEVANT JURISDICTION, OR (B) THE COMPANY SHALL HAVE BEEN
SATISFIED THAT SUCH REGISTRATION, QUALIFICAITON OR APPROVAL IS NOT REQUIRED.
VOID AFTER 5:00 P.M. PACIFIC STANDARD TIME, ON October 25, 2010
October 27, 2000 Warrant to Purchase
----------------------
Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK OF
ORBITTRAVEL.COM CORPORATION
This is to certify that Teakwood Ventures, LLC, a Delaware limited
liability company (the "Holder") is entitled to purchase, subject to the
provisions of this Warrant, from OrbitTRAVEL.com Corporation, a corporation
organized under the laws of the State of Delaware (the "Company"), shares (the
"Warrant Shares") representing at the time of purchase twenty percent (20%) of
the issued and outstanding common stock of the Company (the "Common Stock"), at
any time on or prior to the date that is ten (10) years from the date hereof, at
which time this Warrant shall expire (the "Expiration Date"). The Company shall
as promptly as possible seek and exercise best efforts to obtain any and all
required shareholder approvals for the issuance of Common Stock to the Holder of
20% or more of the issued and outstanding Common Stock. The Company represents
and warrants that no such approvals are required to issue up to 19.8% of the
Common Stock to the Holder and the Holder may elect to acquire such lesser
amount of stock at its sole option under the terms hereof. Except as otherwise
provided herein, this Warrant shall be exercisable without payment by the Holder
of any price. The number of shares of Common Stock to be received upon exercise
of this Warrant shall be adjusted from time
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<PAGE>
to time as set forth in Section 5 below. This Warrant and the Common Stock
issuable upon exercise hereof are sometimes referred to collectively as the
"Securities." This Warrant is also subject to the following terms and
conditions:
1. Exercise and Payment; Exchange; Anti-dilution. This Warrant or a portion
thereof may be exercised in whole or in part (other than fractional interests)
at any time before the Expiration Date. Exercise shall be by presentation and
surrender to the Company at its principal office, or at the office of any
transfer agent designated by the Company (the "Transfer Agent"), of (i) this
Warrant, (ii) the properly executed Form of Exercise attached hereto as Exhibit
"A" and incorporated herein by this reference. If this Warrant is exercised in
part only, the Company or the Transfer Agent shall, upon surrender of this
Warrant, execute and deliver a new Warrant evidencing the rights of the Holder
to purchase the remaining number of Warrant Shares purchasable hereunder. Upon
receipt by the Company of this Warrant in proper form for exercise, (unless the
option described in the foregoing proviso is selected by the Holder), the Holder
shall be deemed to be the holder of record of the Common Stock issuable upon
such exercise, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder. Upon exercise by Holder, the
Company shall issue additional common stock shares to Company so that it
maintains at all time its 20% or 19.8% (if it elects to acquire such lesser
amount of Warrant Shares) ownership interest in all issued and outstanding
shares of common stock of the Company.
2. Reservation of Shares. The Company shall, at all times until the
expiration of this Warrant, reserve for issuance and delivery upon exercise of
this Warrant the number of Warrant Shares which shall be required for issuance
and delivery upon exercise of this Warrant. Upon exercise of the Warrant, the
Company shall promptly register the Warrant Shares and insure that they will be
freely tradeable.
3. No Rights as Shareholder. This Warrant shall not entitle the Holder to
any rights as a shareholder of the Company, either at law or in equity. The
rights of the Holder are limited to those expressed in this Warrant and are not
enforceable against the Company except to the extent set forth herein.
4. Adjustments in Number and Exercise Prices of Warrant Shares.
(a) The number of shares of Common Stock for which this Warrant may be
exercised shall be subject to adjustments as follows:
(i) If the Company is recapitalized through the subdivision or combination
of its outstanding shares of Common Stock for which this Warrant may be
exercised shall be increased or reduced, as of the record date for such
recapitalization, in the same proportion as the increase or decrease in the
outstanding shares of Common Stock,
(ii) If the Company declares a dividend on Common Stock payable in Common
Stock or securities convertible into Common Stock, the number of shares of
Common Stock for which this Warrant may be exercised shall be increased as of
the record date for determining which holders of Common Stock shall be entitled
to receive such dividend, in proportion to the increase in the number of
outstanding shares (and shares of Common Stock issuable upon conversion of all
such securities convertible into Common Stock) of Common Stock as a result of
such dividend.
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(iii) If the Company distributes to holders of its Common Stock, other than
as part of its dissolution or liquidation or the winding up of its affairs, any
shares of its Common Stock, any evidence of indebtedness or any of its assets
(other than cash, Common Stock or securities convertible into Common Stock), the
Company shall give written notice to the Holder of any such distribution at
least ten (10) days prior to the proposed record date in order to permit the
Holder to exercise this Warrant with respect to the Warrant Shares on or before
the record date. There shall be no adjustment in the number of shares of Common
Stock for which this Warrant may be exercised, by virtue of any such
distribution. This Warrant will terminate upon such dissolution, liquidation or
winding up.
(iv) If the event, as a result of which an adjustment is made under
paragraph (i), (ii) or (iii) above, does not occur, then any adjustments in the
or number of shares issuable that were made in accordance with such paragraph
(i), (ii) or (iii) shall be adjusted to and number of shares as were in effect
immediately prior to the record date for such event.
(b) The Company shall, upon the written request of the Holder, retain a
firm of independent public accountants of recognized standing (who may be any
such firm regularly employed by the Company) to make any computation required
under this Section 5, and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section 5.
(c) Whenever the number of Warrant Shares shall be adjusted as required by
the provisions of this Section 5, the Company forthwith shall file in the
custody of its Secretary or an Assistant Secretary, at its principal office, an
officer's certificate showing the adjusted number of Warrant Shares and setting
forth in reasonable detail the circumstances requiring the adjustment. Each such
officer's certificate shall be made available at all reasonable times during
reasonable hours for inspection by the Holder.
5. Notices to Holders. So long as this Warrant shall be outstanding, (a) if
the Company shall pay any dividends or make any distribution upon the Common
Stock otherwise than in cash, or (b) if there shall be any reorganization,
consolidation or merger of the Company into another corporation in which the
Company is not the surviving entity, or the sale or other transfer of all or
substantially all of the property and assets of the Company, or the voluntary or
involuntary dissolution, liquidation or winding up of the Company, then in such
event, the Company shall cause to be mailed to the Holder, at least ten (10)
days prior to the relevant date described below (or such shorter period as is
reasonably possible if ten (10) days is not reasonably possible), a notice
containing a description of the proposed action and stating the date or expected
date on which a reorganization, consolidation, merger, sale or transfer,
dissolution, liquidation or winding up is to take place and the date or expected
date, if any is to be fixed, as of which the holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such event.
6. Transfer or Loss of Warrant .
(a) This Warrant may not be transferred, in whole or in part.
(b) Upon receipt by the Company of evidence satisfactory to it of loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, of reasonably satisfactory indemnification and/or bond, or, in
the case of mutilation, upon surrender of this Warrant, the Company will execute
and deliver, or instruct the Transfer Agent to execute and deliver, a new
Warrant of like tenor and date, and any such lost, stolen, destroyed or
mutilated Warrant thereupon shall become void.
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7. Notices. Notices and other communications to be given to the Holder
and/or Company shall be deemed sufficiently given if delivered by hand, or three
(3) business days after mailing if mailed by registered or certified mail,
postage prepaid, addressed in the name and at the address of such party
appearing below.
If to the Company: Orbittravel.com Corporation
1230 Peachtree Street
Suite 1900 Atlanta, GA 30309 Telephone:
404-942-2500
If to the Holder: Teakwood Ventures, LLC
276 5th Avenue--Suite 603
New York, NY 10001
with a copy to: Paul C. Homsy, Esq.
Zevnik Horton Guibord McGovern
Palmer & Fognani, L.L.P.
1330 Avenue of the Americas, 11th Floor
New York, NY 10019
Either party may change the address to which notices shall be given by notice
pursuant to this Section 7.
8. Arbitration. Any controversy or claim arising out of or relating to this
Warrant or breach thereof, including without limitation claims against either
party, its affiliates employees, professionals, officers or directors shall be
settled by binding arbitration in accordance with the Rules of the American
Arbitration Association. The arbitrator shall prepare an award in writing, which
shall include factual findings and any legal conclusions on which the decision
is based. Judgment upon any award rendered by the Arbitrator(s) may be entered
in any court having jurisdiction thereof. In any such proceeding, the prevailing
party shall be entitled, in addition to any other relief awarded or adjudged,
such sum as the Arbitrator(s) may fix as and for reasonable attorneys' fees and
costs, and the same shall be included in the award and any judgment.
9. Governing Law. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
[remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the Company has executed this Warrant effective as of
October 27, 2000.
ORBITTRAVEL.COM CORPORATION
(a Delaware corporation)
By: /s/ Joseph Cellura
[HOLDER] TEAKWOOD VENTURES, LLC
By: /s/ Aditha Reksono
[SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK]
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EXHIBIT A (TO WARRANT)
FORM OF EXERCISE
(To be executed only upon exercise of Warrant)
To: Orbitravel.Com Corporation
Re: Warrant To Purchase Common Stock of Orbittravel.Com Corporation
The undersigned holder of the within Warrant hereby irrevocably exercises such
Warrant for, and purchases thereunder, _____* shares of Common Stock of As Seen
In Company, and requests that the certificates for such shares be issued in the
name of, and delivered to __________ whose address is:
Very truly yours,
By_______________________________________
*Insert here the number of shares called for on the face of this Warrant (or, in
the case of a partial exercise, the portion thereof as to which this Warrant is
being exercised), in either case without making any adjustment for additional
Common Stock which, pursuant to the adjustment provisions of this Warrant, may
be delivered upon exercise. In the case of a partial exercise, a new Warrant or
Warrants will be issued and delivered, representing the unexercised portion of
this Warrant to the holder surrendering the same.
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<PAGE>
EXHIBIT C
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, FINANCING STATEMENT AND ASSIGNMENT (the "SECURITY
AGREEMENT"), dated as of October 27, 2000, from OrbitTRAVEL.com Corporation, a
Delaware corporation, (the "Company" or the "Grantor") to Teakwood Ventures,
LLC, a Delaware limited liability company (the "Secured Party"). Capitalized
terms used herein without definition shall have the respective meanings
specified in the Secured Revolving Credit Agreement (hereinafter defined).
R E C I T A L S
WHEREAS, the Grantor is party to a separate Secured Revolving Credit
Agreement (the "Credit Agreement"), dated as of October ___, 2000 among the
Grantor and Security Agreement, pursuant to which the Grantor will issue its
Secured Revolving Credit Note to the Security Agreement; and
WHEREAS, the Grantor is obligated to execute this Security Agreement under
the Credit Agreement; and
WHEREAS, all things necessary to make this Security Agreement a valid and
binding obligation of the Grantor have been done;
NOW THEREFORE, in consideration of the mutual promises, covenants and
agreements hereafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
IN ORDER TO SECURE (a) the due, punctual and full payment by the Grantor of
the principal of, and premium, if any, and interest on, the Secured Revolving
Credit Note, whether at maturity or by prepayment, acceleration, declaration of
default or otherwise, as and when the same shall become due and payable in
accordance with the terms thereof and of the Credit Agreement, (b) all other
sums (including, without limitation, amounts payable as damages in case of
default) due and payable by the Grantor to or for the benefit of the as and when
the same shall become due and payable in accordance with the terms thereof, and
(c) the due, prompt and faithful performance of, and compliance with, all other
obligations, covenants, terms, conditions and undertakings of the Grantor
contained in each agreement of Grantor with Secured Party in accordance with the
terms thereof (all of the foregoing being referred to as the "Secured
Obligations");
THE GRANTOR DOES HEREBY (i) grant, bargain, sell, warrant, pledge, assign,
mortgage, hypothecate, transfer, convey and grant to the Secured Party, and to
their respective successors and assigns, a mortgage interest and a security
interest in the following property of the Company (collectively, the
"Collateral"):
(a) All accounts receivable, instruments, documents and chattel paper,
including, without limitation, all accounts created by or arising from the
rendering of services by Company to its
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customers and all accounts arising from sales or rendering of services by
Company made under any trade name or style, guaranties or collateral for any of
the foregoing, insurance policies or rights relating to any of the foregoing and
cash and non-cash proceeds of any and all the foregoing; and all contract
rights, tax refunds, insurance proceeds, patent rights, trademarks, copyrights,
trade names, good will, registrations, license rights, rights in intellectual
property, licenses, permits, corporate and other business records, rights to
refunds or indemnification and all other intangible personal property of Company
of every kind and nature;
(b) All other properties of Company, wheresoever situated or howsoever
held, real, personal or mixed, tangible or intangible, whether now held or
hereafter acquired as if specifically enumerated herein;
(c) All property, rights and interests nor or hereafter acquired by Company
for use in connection with the operation or maintenance of its business;
(d) All contracts now in effect or hereafter entered into by the Company
for the sale, purchase, exchange or exploitation of any asset of the Company;
(e) Whatever is received upon the sale, exchange, collection or other
disposition of the foregoing and insurance payable or damages or other payments
by reason of loss or damage to the foregoing, and all additions thereto,
substitutions and replacements thereof or accessions thereto (collectively, the
"Proceeds").
TO HAVE AND TO HOLD the above-mentioned Collateral unto the Secured Party,
with power of sale, IN TRUST NEVERTHELESS, upon the terms, conditions and trusts
set forth herein, for the equal and ratable benefit and security of all present
and future holders of any Secured Revolving Credit Note.
ARTICLE 1. REMEDIES AND ENFORCEMENT
1.1. Action to be Taken by Secured Party. The Secured Party will take such
action with respect to the enforcement of its remedies as a secured party
hereunder as determined in its sole discretion.
1.2. Remedies in Case of an Event of Default. In case the Company shall
have failed to pay Secured Party amounts as and when due under the Credit
Agreement or breached the Credit Agreement in any way (an "Event of Default")
and such failure shall be continuing:
(a) The Secured Party may, as assignee of the Company of the Collateral, in
its own name or, at its sole option, in the name of the Company, exercise any or
all of the rights, privileges of, and pursue any or all of the remedies accorded
to, the Company thereunder and may exclude the Company and all persons claiming
by, through or under the Company wholly or partly therefrom, including, without
limitation, the right to ask for, demand, take, collect, sue for, receive,
compromise and settle all payments in respect of the Collateral which the
Company, except for the execution hereof, could ask for, demand, take, collect,
sue for, receive, compromise and settle all for its own use, and in connection
therewith to enforce all rights and remedies thereunder which the Company could
enforce if this Security Agreement had not been made; and the Company hereby
ratifies any action which the Secured Party shall take to enforce their rights
hereunder; and
(b) The Secured Party without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public
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or private sale) to or upon the Company or any other Person (all and each of
which demands, advertisements and/or notices are hereby expressly waived), may
forthwith collect, recover, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give an
option or options to purchase, contract to sell or otherwise dispose of and
deliver the Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange, broker's board or at any of the Secured
Party's offices or elsewhere upon such terms and conditions as they may deem
advisable and at such prices as they may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Company hereby
acknowledges that the Collateral is of a type that could decline speedily in
value and is also of a type customarily sold on a recognized market, in each
case within the meaning of Section 9-504 of the Uniform commercial Code as in
effect in any applicable jurisdiction, and that the Secured Party need not give
any notice to the Company prior to any sale of the Collateral at any exchange,
broker's board or in any other recognized market. Without limiting the
foregoing, the Company agrees that the Secured Party need not give more than
five days' notice of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place and that
such notice is reasonable notification of such matters. No notification need be
given to the Company if it has signed after an Event of Default a statement
renouncing or modifying any right to notification of sale or other intended
disposition. In addition to the rights and remedies granted to it in this
Security Agreement and in any other instrument or agreement securing, evidencing
or relating to any of the Secured Obligations, the Secured Party shall have all
the rights and remedies of a secured party under the Uniform Commercial Code
applicable in any jurisdiction, including, without limitation, in the State of
New York.
1.3. Application of Moneys by Secured Party. All amounts held or collected
by the Secured Party as part of the Collateral (including, without limitation,
all amounts realized as a result of the exercise of any rights and remedies
hereunder) following the occurrence and continuance of any Event of Default
shall be applied forthwith by the Secured Party as follows:
FIRST: to the payment of all costs and expenses of such exercise
(including, without limitation, the cost of evidence of title and the costs and
expenses, if any, of taking possession of, retaining custody over repairing,
maintaining and preserving the Collateral or any part thereof, or any interest
therein prior to such exercise), all costs and expenses of any receiver of the
Collateral or any part thereof, or any interest therein and any taxes,
assessments or charges, prior to the lien of this Security Agreement, which the
Secured Party may consider it necessary or desirable to pay;
SECOND: to the payment of the accrued and unpaid interest (including
interest on unpaid principal and, to the extent permitted by applicable law,
unpaid interest) of the Secured Revolving Credit Note in accordance with the
provisions of the Credit Agreement and the Secured Revolving Credit Note;
THIRD: to the payment of the outstanding principal of, and premium, if any,
on the Secured Revolving Credit Note in accordance with the provisions of the
Credit Agreement and the Secured Revolving Credit Note;
FOURTH: to the payment of all amounts due and to become due on, under or in
respect of all Secured Obligations for which moneys have not theretofore been
applied by the Secured Party; provided, that if such moneys shall be
insufficient to pay all such amounts in full, such payments shall be made
ratably to each person entitled thereto in the proportion that such payments due
and to become due on, under or in respect of all Secured Obligations held by
such person bears to the aggregate amount of all such payments due and to become
due on all Secured Obligations, without discrimination or preference; and
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FIFTH: to the payment of the remainder, if any, to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may determine.
1.4 Secured Party's Appointment as Attorney-in-Fact. Effective upon the
occurrence and continuance of an Event of Default, the Company hereby
irrevocably constitutes and appoints the Secured Party and any officer or agent
of the Secured Party, with full power of substitution, as the Company's
attorneys-in-fact, with full irrevocable power and authority in the place and
stead of the Company and in the name of the Company or otherwise from time to
time in the Security Agreement's discretion, to execute and deliver all bills of
sale, assignments or other instruments which the Secured Party may deem
necessary or advisable to effectuate any sale, transfer, assignment or delivery
in exercise of any or all of the remedies hereunder whether pursuant to
foreclosure or power of sale or otherwise, and to take any other action to
accomplish the purposes of this Security Agreement, to ask, demand, collect, sue
for, recover, compound, receive and give acquittance and receipt for monies due
and to become due under or in connection with the Collateral, to receive,
endorse, and collect any drafts or other instruments, documents and chattel
paper in connection therewith, to file any claims or take any action or
institute any proceedings which the Secured Party may deem to be necessary or
desirable for the collection thereof, the Company hereby ratifying and
confirming all that such attorney or any substitute shall lawfully do by virtue
hereof. This power of attorney is a power coupled with an interest and shall be
irrevocable. Nevertheless, if so requested by the Secured Party or any
purchaser, the Company shall ratify and confirm any such sale, assignment,
transfer or delivery by executing and delivering to the Secured Party or such
purchaser all bills of sale, assignments, releases and other proper instruments
to effect such ratification and confirmation as may be designated in any such
request.
1.4.1. Financing Statements. The Company shall execute and deliver to
Teakwood such Financing Statements pursuant to the appropriate statutes for
filing in the appropriate offices in the States of New York and/or Montana
and/or elsewhere if and to the extent reasonably required, and any other
documents or instruments as are required to convey to Teakwood a valid perfected
security interest in the collateral. The Company agrees to perform all acts
which Teakwood may reasonably request so as to enable Teakwood to maintain such
valid perfected security interest in the collateral in order to secure the
payment and performance of the obligations. Teakwood is authorized to file a
copy of any such Financing Statements in any jurisdiction(s) in the States of
New York and/or Montana and/or elsewhere as it shall reasonably deem appropriate
in order to perfect such security interest. The Company hereby grants Teakwood
an irrevocable Power of Attorney coupled with an interest to sign on Company's
behalf any Financing Statement and file them in such locations, as it deems
appropriate.
1.5. Secured Party May Enforce Claims Without Possession of Note. All
rights of action and claims under this Security Agreement may be prosecuted and
enforced by the Secured Party without the possession of any of the Secured
Revolving Credit Note or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Secured Party shall be
brought in their own name as Secured Party of an express trust.
1.6. Remedies Cumulative and Continuing. Each right, power and remedy given
by this Security Agreement to the Secured Party shall be deemed cumulative and
concurrent and not exclusive of any thereof or of any other rights, powers and
remedies available to the Secured Party now or hereafter existing at law or in
equity or by statute or otherwise to enforce the performance or observance of
the covenants and agreements contained in this Security Agreement, and neither
the exercise or beginning of the exercise, nor the delay or omission of the
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Secured Party to exercise, any right or power accruing upon any default as
aforesaid shall impair any such right, power or remedy. Every right, power and
remedy given by this Security Agreement or by law to the Secured Party may be
exercised from time to time, and as often as shall be deemed expedient, by the
Secured Party.
1.7. Restoration of Rights and Remedies. If the Secured Party has
instituted any proceeding to enforce any right or remedy under this Security
Agreement and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Secured Party, then and in every such
case the Company, and the Secured Party shall be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Secured Party shall continue as though no such proceeding had
been instituted.
1.8. No Waiver, etc. by Secured Party. No failure by the Lender to insist
upon the strict performance of any term hereof or to exercise any right, power
or remedy consequent upon a breach hereof shall constitute a waiver of any such
breach or any such term. No waiver of any breach shall affect or alter this
Security Agreement, which shall continue in full force and effect with respect
to any other then existing or subsequent breach.
1.9. Purchase of Collateral by the Secured Party. The Secured Party may be
a purchaser of the Collateral or of any part thereof or any interest therein at
any sale thereof, whether pursuant to foreclosure or power of sale or otherwise
hereunder, and may apply upon the purchase price the indebtedness secured hereby
owing to such purchaser, to the extent of such purchaser's distributive share of
the purchase price. Any such purchaser shall, upon any such purchase, acquire
good title to the properties so purchased, free of the lien of this Security
Agreement and free, to the extent permitted by applicable law, of all rights of
equity or redemption in the Company, which right of equity and redemption the
Company hereby expressly waives and releases, and the Company hereby covenants
to warrant and defend the title of such purchaser.
1.10. Receipt a Sufficient Discharge to Purchaser. Upon any sale of the
Collateral or any part thereof or any interest therein, whether pursuant to
foreclosure or power of sale or otherwise hereunder, the receipt of the officer
making the sale under judicial proceedings or of the Secured Party shall be
sufficient discharge to the purchaser for the purchase money, and such purchaser
shall not be obliged to see to the application thereof.
1.11. Waiver of Appraisement, Valuation. etc. The Company hereby waives:
(i) to the full extent it may lawfully do so, the benefit of all appraisement,
valuation, stay, extension, moratorium and redemption laws now or hereafter in
force and all rights of marshalling in the event of any sale of the Collateral
or any part thereof or any interest therein.
1.12. Sale a Bar Against the Company. Any sale of the Collateral or any
part thereof or any interest therein, whether pursuant to foreclosure or power
of sale or otherwise hereunder, shall forever be a perpetual bar against the
Company to assert any claim of ownership to the Collateral or any part thereof
or any interest therein.
1.13. Appointment of Receiver. If an Event of Default shall have occurred
and be continuing, the Secured Party shall, as a matter of right and without
notice to the Company or any person claiming by, through or under the Company,
and without regard to the then value of the Collateral or the interest of the
Company therein, be entitled to the appointment of a receiver or receivers of
the Collateral, whether such receivership be incidental to a proposed sale of
the Collateral or otherwise and the Company hereby irrevocably consents to such
appointment and will not oppose such appointment.
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1.14. Possession, Management and Income of Collateral. If an Event of
Default shall have occurred and be continuing, the Secured Party, without
notice, may enter upon any premises at which the Collateral or any part thereof
shall be located and take possession of the Collateral or any part thereof by
force, summary proceedings, ejectments or otherwise and may remove the Company
and all other Persons and any and all property therefrom, and may hold, operate,
maintain, repair, preserve and manage the same and receive all earnings, income,
rents, issues and proceeds accruing with respect thereto or any part thereof.
The Secured Party shall be under no liability for or by reason of any such
taking of possession, entry, removal or holding, operation or management, except
that any amounts so received by the Secured Party shall be applied to pay all
costs and expenses of so entering upon, taking possession of, holding,
operating, maintaining, repairing, preserving and managing the Collateral or any
part thereof, and any taxes, assessments or other charges prior to the lien of
this Security Agreement which the Secured Party may consider it necessary or
desirable to pay, and any balance of such amounts shall be applied as provided
in Article 1.3.
1.15. Right of Secured Party to Perform Company's Covenants, etc. If the
Company fails to make any payment or to perform any agreement required to be
made or performed hereunder, the Secured Party may (but shall not be obliged to)
at any time thereafter make such payment or perform such agreement, or otherwise
cause performance or compliance thereof, for the account and at the expense of
the Company, and take possession of the Collateral or any part thereof for such
purpose and take all such action thereon as, in the, opinion of the Secured
Party may be necessary or appropriate therefor. The Secured Party shall give
prompt written notice to the Company of any action taken by the Security
Agreement pursuant to the preceding sentence. All sums so paid by the Secured
Party and all costs and expenses (including, without limitation, attorneys' fees
and expenses) so incurred, together with interest, from the date of payment or
incurring, on such amounts at a rate of interest per annum equal to the interest
on the Secured Revolving Credit Note, shall constitute additional indebtedness
secured by this Security Agreement and shall be paid by the Company to the
Secured Party on demand.
1.16. No Assumption of Obligations by Secured Party. The rights and powers
conferred on the Secured Party hereunder are solely to protect their interest in
the Collateral and shall not impose any duty on the Security Agreement to
exercise such rights or powers. Neither the pledge of, and granting of a
security interest in, the Collateral nor any action or inaction on the part of
the Secured Party hereunder or under any of the other Operative Agreements shall
release the Company from any of its obligations hereunder or under any of the
other Operative Agreements, or constitute an assumption of any such obligations
on the part of the Secured Party, or cause the Secured Party to become subject
to any obligation or liability to the Company.
1.17. Provisions Subject to Applicable Law; All rights, powers and remedies
provided in this Security Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Security Agreement invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
1.18. Release, etc. Upon receipt by the Secured Party of evidence
satisfactory to them of the payment in full of the principal and premium, if
any, and interest on the Secured Revolving Credit Note in accordance with the
terms thereof, and the payment of all other amounts secured hereby and the
performance of all other covenants and agreements secured hereby, this Security
Agreement shall terminate and the Secured Party, at the request and expense of
the Company, will execute and deliver to the Company a proper instrument or
instruments acknowledging the satisfaction and termination of this Security
Agreement, and will duly assign, transfer and deliver
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to the Company or its designee all of the rights, properties and monies at the
time held by the Secured Party hereunder.
1.19. Additional Security. Without notice to or consent of the Company and
without impairment of the security interest and rights granted pursuant to this
Security Agreement, the Secured Party may accept from the Company or from any
other person or persons, additional security for the Secured Obligations.
Neither the giving of this Security Agreement nor the acceptance of any such
additional security shall prevent the Secured Party from resorting, first, to
such additional security, or, first, to the security created by this Security
Agreement, in either case without affecting the Secured Party's security
interest and rights granted pursuant to this Security Agreement.
ARTICLE 2. MISCELLANEOUS
2.1. Notices; Further Information. All notices and other communications
hereunder shall be in writing and shall be delivered by hand, by telecopy or by
first class mail, postage prepaid, addressed at the address for such party as
set forth in the Credit Agreement.
2.2. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT
OR ANY OF THE OTHER OPERATIVE OR ANY TRANSACTION CONTEMPIATED HEREBY OR THEREBY
OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.
2.3. Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. There shall be
substituted for any such provision so rendered ineffective a provision which, as
far as legally possible, most nearly reflects the intent of the parties hereto.
2.4. Counterparts. This Security Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument, and all of which are identical.
2.5. Table of Contents; Headings. The table of contents and the section
headings in this Security Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
2.6. Amendments. Any term of this Security Agreement may be amended,
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company, and the Security Agreement.
2.7. Successors and Assigns. This Security Agreement shall be binding upon
the Company and its respective successors and assigns and all persons claiming
by, through or under the Company or any such successor or assign, and shall
inure to the benefit of and be enforceable by the Secured Party.
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2.8. Further Assurances. The Company agrees that at any time and from time
to time, at the expense of the Company, the Company will promptly execute,
acknowledge, file, deliver, record and publish all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and all such further certificates, instruments
and documents, and take all such further action, as may be required by law, or
as may be necessary or desirable, or that the Secured Party in order to (a)
grant more effectively all or any portion of the Collateral, (b) maintain or
preserve the lien of this Security Agreement, (c) preserve and defend title to
the Collateral and the rights of the Secured Party against any person, (d)
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Secured Party to exercise and enforce its rights and
remedies hereunder, and (e) carry out more effectively the purposes of this
Security Agreement.
2.9. Governing Law. THIS SECURITY AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL. MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE EXCEPT
WITH RESPECT TO MANDATORILY APPLICABLE PROVISIONS OF THE LAWS OF ANY STATE WHERE
ANY PORTION OF THE COLLATERAL IS LOCATED, INSOFAR AS THEY RELATE TO THE
ENFORCEMENT OF RIGHTS AND REMEDIES IN RESPECT OF SUCH COLLATERAL.
IN WITNESS WHEREOF, the parties have caused this Security Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
ORBITTRAVEL.COM CORPORATION
By /s/ Joseph Cellura
TEAKWOOD VENTURES, LLC
By /s/ Aditha Reksono
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EXHIBIT D
Existing Defaults
(omitted)
65
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EXHIBIT E
Proposals and Negotiations
(omitted)
66
<PAGE>
SCHEDULE TO SECTION 3(F)(21)
Budget for 355,000
(omitted)
67
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<PAGE>
EXHIBIT 6[B]
CAPITALIZATION SCHEDULE
(omitted)
68
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SCHEDULE 6[D]
Litigation, Claims, etc.
(omitted)
69
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