Unsecured Credit Agreement - BriteSmile International Ltd. and CAP Advisers Ltd.
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UNSECURED CREDIT AGREEMENT
BY AND BETWEEN
BRITESMILE INTERNATIONAL LIMITED
AND
CAP ADVISERS LIMITED
Dated March , 2002
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UNSECURED CREDIT AGREEMENT
Dated March , 2002
BRITESMILE INTERNATIONAL LIMITED an Irish company with company registration
no. 306119 and registered office at 36 Fitzwilliam Place, Dublin 2, Ireland (the
"Borrower"), and CAP ADVISERS LIMITED an English company with company
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registration no. 2147486 acting through its Dublin branch at 36 Fitzwilliam
Place, Dublin 2, Ireland (the "Lender"), hereby agree as follows:
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ARTICLE I
DEFINITIONS
1. Section 1.1 Definitions. For all purposes of this Agreement,
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except as otherwise expressly provided, the following terms shall have the
meanings assigned to them in this Section or in the Section referenced after
such term:
"Advance" means a Revolving Advance.
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"Agreement" means this Unsecured Credit Agreement.
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"Availability" means the difference between (i) the Maximum Line and
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(ii) the outstanding principal balance of the Obligations.
"Banking Day" means a day on which the Federal Reserve Bank of New
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York is open for business.
"Base Rate" means the rate of interest publicly announced from time to
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time by The Bank of Nova Scotia at its principal office in London as its
"LIBOR Rate" for one year US dollar deposits of marketable size by prime
banks in the London inter-bank market.
"Commitment" means the Lender's commitment to make Advances to the
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Borrower pursuant to Article II.
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"Credit Facility" means the credit facility being made available to
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the Borrower by the Lender under Article II.
"Default" means an event that, with giving of notice or passage of
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time or both, would constitute an Event of Default.
"Default Period" means any period of time beginning on the first day
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of any month during which a Default or Event of Default has occurred and
ending on the date the Lender notifies the Borrower in writing that such
Default or Event of Default has been cured or waived.
"Default Rate" means an annual interest rate equal to three percent
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(3%) over the Floating Rate, which interest rate shall change when and as
the Floating Rate changes.
"Event of Default" has the meaning specified in Section 7.1.
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"Floating Rate" means an annual interest rate equal to the sum of the
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Base Rate plus two percent (2.0%), which interest rate shall change when
and as the Base Rate changes.
"Funding Date" has the meaning given in Section 2.1.
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"Lien" means any security interest, mortgage, deed of trust, pledge,
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lien, charge, encumbrance, title retention agreement or analogous
instrument or device, including the interest of each lessor under any
capitalized lease and the interest of any bondsman under any payment or
performance bond, in, of or on any assets or properties of a Person,
whether now owned or hereafter acquired and whether arising by agreement or
operation of law.
"Loan Documents" means this Agreement and any other documents relating
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to the Credit Facility.
"Maximum Line" means One Million United States Dollars (US$1,000,000).
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"Obligations" means each and every debt, liability and obligation of
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every type and description which the Borrower may now or at any time
hereafter owe to the Lender under or pursuant to this Agreement, whether
such debt, liability or obligation now exists or is hereafter created or
incurred, whether it is direct or indirect, due or to become due, absolute
or contingent, primary or secondary, liquidated or unliquidated, or sole,
joint, several.
"Person" means any individual, corporation, partnership, joint
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venture, limited liability company, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Revolving Advance" has the meaning given in Section 2.1.
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"Termination Date" means the earliest of (i) the date the Borrower
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cancels the Credit Facility; or (ii) the date the Lender demands payment or
repayment of all moneys owing in respect of the Credit Facility pursuant to
Section 1.1; or (iii) the date the Lender demands payment of the
Obligations after an Event of Default pursuant to section 7.2.
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ARTICLE II
AMOUNT AND TERMS OF THE CREDIT FACILITY
Section 2.1 Revolving Advances. The Lender agrees, on the terms
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and subject to the conditions herein set forth, to make advances to the Borrower
from time to time on or after January 1, 2002 in US dollars from the date all of
the conditions set forth in Section 4.1 are satisfied (the "Funding Date") to
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the Termination Date (the "Revolving Advances"). The Lender shall have no
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obligation to make a Revolving Advance to the extent the amount of the requested
Revolving Advance exceeds Availability. Within the limits set forth in this
Section 2.1, the Borrower may borrow, prepay pursuant to Section 2.6 and
reborrow.
Section 2.2 Procedures for Requesting Advances. The Borrower
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shall comply with the following procedures in requesting Revolving Advances:
(a) Time for Requests. The Borrower shall request each
Advance not later than 11:00 a.m. Eastern Standard Time on the third Banking Day
prior to the day which is the date the Advance is to be made. Each such request
shall be effective upon receipt by the Lender, shall be in writing or telecopy
transmission and shall be substantially in the form of Exhibit A unless the
Lender and the Borrower shall agree in writing to any other form, shall be by
(i) an Officer of the Borrower; or (ii) a Person designated as the Borrower's
agent by an Officer of the Borrower in a writing delivered to the Lender; or
(iii) a person whom the Lender reasonably believes to be an Officer of the
Borrower or such a designated agent. The Borrower shall repay all Advances even
if the Lender does not receive such confirmation and even if the person
requesting an Advance was not in fact authorized to do so. Any request for an
Advance, whether written or telephonic, shall be deemed to be a representation
by the Borrower that the conditions set forth in Section 4.1 have been satisfied
as of the time of the request, and shall be accompanied by the documents
referred to in Section 4.2.
(b) Disbursement. Upon fulfillment of the applicable conditions set forth
in Article IV, the Lender shall disburse the proceeds of the requested Advance
by crediting the same to the Borrower's account in the name of BRITESMILE
INTERNATIONAL No. 0081803161 at the Bank of Hawaii, P.O. Box 2900, Honolulu, HI
96846, USA Routing No. 121301028, unless the Lender and the Borrower shall agree
in writing to another manner of disbursement.
Section 2.3 Interest; Default Interest;
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(a) Revolving Advances. Except as set forth in
subsection (b), the outstanding principal balance of the Revolving Advances
shall bear interest at the Floating Rate.
(b) Default Interest Rate. At any time during any
Default Period, in the Lender's sole discretion and without waiving any of its
other rights and remedies, the principal of the Advances outstanding from time
to time shall bear interest at the Default Rate, effective for any periods
designated by the Lender from time to time during that Default Period.
Section 2.4 Time for Interest Payments; Payment on Non-Banking
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Days; Computation of Interest and Fees; Avoidance of Doubt.
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(a) Time For Interest Payments. Interest shall accrue
from day to day and shall be due and payable in arrears on the last day of each
month and on the Termination Date.
(b) Payment on Non-Banking Days. Whenever any payment
to be made hereunder shall be stated to be due on a day which is not a Banking
Day, such payment may be
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made on the next succeeding Banking Day, and such extension of time shall in
such case be included in the computation of interest on the Advances or the fees
hereunder, as the case may be.
(c) Computation of Interest and Fees. Interest accruing
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on the outstanding principal balance of the Advances and fees hereunder
outstanding from time to time shall be computed on the basis of actual number of
days elapsed in a year of three hundred sixty (360) days.
(d) Avoidance of Doubt. For the avoidance of doubt, the
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Base Rate (and thus the Floating Rate and the Default Rate) applicable to each
Advance shall be determined at the date of the making of the Advance and shall
remain fixed until such time, if any, as the Lender refinances itself from Bank
of Nova Scotia Channel Islands Limited in respect of the funds used for that
Advance whereupon such Base Rate (and thus the Floating Rate and the Default
Rate) shall be recalculated by reference to Base Rate as at the date of such
refinancing, and the same shall apply mutatis mutandis in respect of further
such refinancings.
Section 2.5 Voluntary Prepayment. Except as otherwise provided herein
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provided herein, the Borrower may prepay the Advances in whole at any time or
from time to time in part.
Section 2.6 Revolving Advances to Pay Obligations. Notwithstanding
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anything in Section 2.1, the Lender may, in its discretion at any time or from
time to time, without the Borrower's request and even if the conditions set
forth in Article IV would not be satisfied, make a Revolving Advance in an
amount equal to the portion of the Obligations from time to time due and
payable.
Section 2.7 Use of Proceeds. The Borrower shall use the proceeds of
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Advances for its general business purposes.
ARTICLE III
SETOFF
Section 3.1 Setoff. The Lender may at any time or from time to time,
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at its sole discretion and without demand and without notice to anyone,
set off any liability owed to the Borrower by the Lender, whether or not due,
against any Obligation, whether or not due.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.1 Conditions Precedent to the Initial Revolving Advance. The
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Lender's obligation to make the initial Advance hereunder shall be subject to
the condition precedent that the Lender shall have received this Agreement,
properly executed by the Borrower.
Section 4.2 Conditions Precedent to each Advance. The Lender's
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obligation to make each Advance hereunder shall be subject to the condition
precedent that the Lender shall have received all of the following, each in form
and substance satisfactory to the Lender;
(a) A request substantially in the form of Exhibit A; and
(b) Evidence that after making the Advance, the Maximum Line
will not exceed Availability.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender as follows:
Section 5.1 Existence and Power. The Borrower is a corporation, duly
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organized, validly existing and in good standing under the laws of the Republic
of Ireland and is duly licensed or qualified to transact business in all
jurisdictions where the character of the property owned or leased or the nature
of the business transacted by it makes such licensing or qualification
necessary. The Borrower has all requisite power and authority to conduct its
business, to own its properties and to execute and deliver, and to perform all
of its obligations under, the Loan Documents.
Section 5.2 Authorization of Borrowing; No Conflict as to Law or
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Agreements. The execution, delivery and performance by the Borrower of the
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Loan Documents and the borrowings from time to time hereunder have been duly
authorized by all necessary corporate action, including the board of directors
of the Borrower and the board of directors, or executive committee of the board
of directors, of BriteSmile Inc, the parent company of the Borrower and do not
and will not (i) require any further consent or approval of the shareholders in
the Borrower; (ii) require any authorization, consent or approval by, or
registration, declaration or filing with, or notice to, any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or any third party, except such authorization, consent, approval,
registration, declaration, filing or notice as has been obtained, accomplished
or given prior to the date hereof; (iii) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Borrower is a party or by which it
or its properties may be bound or affected; or (v) result in, or require, the
creation or imposition of any Lien upon or with respect to any of the properties
now owned or hereafter acquired by the Borrower.
Section 5.3 Financial Condition; No Adverse Change. The Burrower has
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furnished to the Lender its audited financial statements for its fiscal year
ended December 31, 2000 and unaudited financial statements for the fiscal-year-
to-date period ended December 31, 2001, and those statements fairly present the
Borrower's financial condition on the dates thereof and the results of its
operations and cash flows for the periods then ended and were prepared in
accordance with generally accepted accounting principles. Since the date of the
most recent financial statements, there has been no change in the Borrower's
business, properties or condition (financial or otherwise) which could have a
material adverse effect on the Borrower's business operations, other than the
events of September 11, 2001, which have negatively impacted revenues.
Section 5.4 Litigation. There are no actions, suits or
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proceedings pending or, to the Borrower's knowledge, threatened against or
affecting the Borrower or the properties of the Borrower before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the Borrower, would have
a material adverse effect on the financial condition, properties or operations
of the Borrower.
Section 5.5 Taxes. The Borrower has paid or caused to be paid to the
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proper authorities when due all federal, state and local taxes required to be
withheld by each of them. The Borrower has filed all tax returns which to the
knowledge of the Officers of the Borrower, as the case may be, are required to
be filed, and the Borrower has paid or caused to be paid to the respective
taxing authorities all taxes as shown on said returns or on any assessment
received by any of them to the extent such taxes have become due.
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Section 5.6 Default. The Borrower is in compliance with all
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provisions of all agreements, instruments, decrees and orders to which it is a
party or by which it or its property is bound or affected, the breach or default
of which could have a material adverse effect on the Borrower's financial
condition, properties or operations.
Section 5.7 Submissions to Lender. All financial and other
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information provided to the Lender by or on behalf of the Borrower in connection
with the Borrower's request for the credit facilities contemplated hereby is (i)
true and correct in all material respects, (ii) does not omit any material fact
necessary to make such information not misleading and, (iii) as to projections,
valuations or proforma financial statements, present a good faith opinion as to
such projections, valuations and proforma condition and results.
ARTICLE VI
COVENANTS
So long as the Obligations shall remain unpaid, or the Credit Facility
shall remain outstanding, the Borrower will comply with the following
requirements, unless the Lender shall otherwise consent in writing:
Section 6.1 Reporting Requirements. The Borrower will deliver,
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or cause to be delivered, to the Lender each of the following, which shall be in
form and detail acceptable to the Lender:
(a) Annual Financial Statements. As soon as available,
and in any event within nine (9) months after the end of each fiscal year of the
Borrower, the Borrower will deliver, or cause to be delivered, to the Lender,
the Borrower's audited financial statements with the unqualified opinion of
independent certified public accountants selected by the Borrower and acceptable
to the Lender, which annual financial statements shall include the Borrower's
balance sheet as at the end of such fiscal year and the related statements of
the Borrower's income, retained earnings and cash flows for the fiscal year then
ended, prepared on a consolidating and consolidated basis to include any
Affiliates, all in reasonable detail and prepared in accordance with accounting
standards generally accepted in Ireland.
(b) Projections. At least thirty (30) days before the
beginning of each fiscal year of the Borrower, the Borrower will deliver to the
Lender the projected balance sheets and income statements for each month of such
year, each in reasonable detail, representing the Borrower's good faith
projections and certified by the Borrower's chief financial officer as being the
most accurate projections available and identical to the projections used by the
Borrower for internal planning purposes, together with a statement of underlying
assumptions and such supporting schedules and information as the Lender may in
its discretion require.
(c) Defaults. As promptly as practicable (but in any
event not later than five (5) business days) after an Officer of the Borrower
obtains knowledge of the occurrence of any Default or Event of Default, the
Borrower will deliver to the Lender notice of such occurrence, together with a
detailed statement by a responsible Officer of the Borrower of the steps being
taken by the Borrower to cure the effect thereof.
Section 6.2 Books and Records; Inspection and Examination. The
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Borrower will keep accurate books of record and account for itself pertaining to
the Borrower's business and financial condition and such other matters as the
Lender may from time to time request in which true and complete entries will be
made in accordance with accounting standards generally accepted in Ireland and,
upon the Lender's request, will permit any officer, employee, attorney or
accountant
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for the Lender to audit, review, make extracts from or copy any and all company
and financial books and records of the Borrower at all times during ordinary
business hours, and to discuss the Borrower's affairs with any of its Directors,
Officers, employees or agents. The Borrower hereby irrevocably authorizes all
accountants and third parties to disclose and deliver to Lender, at the
Borrower's expense, all financial information, books and records, work papers,
management reports and other information in their possession regarding the
Borrower.
Section 6.3 Payment of Taxes and Other Claims. The Borrower will
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pay or discharge, when due, (a) all taxes, assessments and governmental charges
levied or imposed upon it or upon its income or profits, upon any properties
belonging to it, (b) all taxes required to be withheld by it, and (c) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
Lien upon any properties of the Borrower; provided, that the Borrower shall not
be required to pay any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which proper reserves have been made.
ARTICLE VII
REPAYMENTS; CANCELLATION OF THE CREDIT FACILITY BY THE BORROWER; EVENTS OF
DEFAULT, RIGHTS AND REMEDIES
Section 7.1 Repayments. Notwithstanding any other provision of
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this Agreement, the Lender may at any time, by giving notice to that effect to
the Borrower; (i) cancel the Credit Facility whereupon the Credit Facility shall
cease to be available for further drawings and (ii) demand immediate payment or
repayment of all moneys owing in respect of Credit Facility, whereupon all such
amounts shall become immediately due and owing.
Section 7.2 Events of Default. "Event of Default", wherever used
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herein, means any one of the following events:
(a) Default in the payment of any Obligations when they
become due and payable;
(b) Default in the performance, or breach, of any
covenant or agreement of the Borrower contained in this Agreement and such
default or breach shall continue for ten (10) Banking Days; provided, that such
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ten (10) Banking Day cure period shall not apply in the case of (i) any default
or event addressed in any other provision or paragraph of this Section 7.2, (ii)
the failure to comply with the covenants set forth in Section 6.2 or 6.3, (iii)
any default in the performance, or breach, of any such covenant or agreement
which is not capable of being cured at all or within such ten (10) Banking day
period or which has been the subject of a previous default or breach within the
prior twelve (12) month period, or (iv) an intentional breach by Borrower of
such covenant or agreement.;
(c) The Borrower shall be or become insolvent, or admit
in writing its inability to pay its debts as they mature, or make an assignment
for the benefit of creditors; or the Borrower shall apply for or consent to the
appointment of any administrator, receiver, trustee, or similar officer for it
or for all or any substantial part of its property; or such administrator,
receiver, trustee or similar officer shall be appointed without the application
or consent of the Borrower as the case may be; or the Borrower shall institute
(by petition, application, answer, consent or otherwise) any bankruptcy,
insolvency, reorganization, administration, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; or any such proceeding shall be instituted (by petition,
application or otherwise) against the Borrower or
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any judgment, writ, warrant of attachment or execution or similar process shall
be issued or levied against a substantial part of the property of the Borrower;
(d) The Borrower shall liquidate, dissolve, terminate or suspend
its business operations or otherwise fail to operate its business in the
ordinary course, or sell or attempt to sell all or substantially all of its
assets, without the Lender's prior written consent;
(e) Default in the payment of any amount owed by the Borrower to
the Lender other than any indebtedness arising hereunder;
(f) Any event or circumstance with respect to the Borrower shall
occur such that the Lender shall believe in good faith that the prospect of
payment of all or any part of the Obligations or the performance by the Borrower
under the Loan Documents is impaired or any material adverse change in the
business or financial condition of the Borrower shall occur and such belief in
good faith shall continue for ten (10) Banking Days after the Lender shall have
notified the Borrower of such event or circumstance;
Section 7.3 Rights and Remedies. During any Default Period,
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the Lender may exercise any or all of the following rights and remedies:
(a) the Lender may, by notice to the Borrower, declare the
Commitment to be terminated, whereupon the same shall forthwith terminate;
(b) the Lender may, by notice to the Borrower, declare the
Obligations to be forthwith due and payable, whereupon all Obligations shall
become and be forthwith due and payable, without presentment, notice of
dishonor, protest or further notice of any kind, all of which the Borrower
hereby expressly waives;
(c) the Lender may, without notice to the Borrower and without
further action, apply any and all money owing by the Lender to the Borrower to
the payment of the Obligations;
Notwithstanding the foregoing, upon the occurrence of an Event of Default, the
Obligations shall be immediately due and payable automatically without
presentment, demand, protest or notice of any kind.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Waiver; Cumulative Remedies; Compliance with Laws. No
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failure or delay by the Lender in exercising any right, power or remedy under
the Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
Section 8.2 Amendments, Etc. No amendment, modification, termination or
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waiver of any provision of any Loan Document or consent to any departure by the
Borrower therefrom shall be effective unless the same shall be in writing and
signed by the Lender, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No notice to
or demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
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Section 8.3 Addresses for Notices; Requests for Accounting. Except as
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otherwise expressly provided herein, all notices, requests, demands and other
communications provided for under the Loan Documents shall be in writing and
shall be (a) personally delivered, (b) sent by first class mail, (c) sent by
overnight courier of national reputation, or (d) transmitted by telecopy, in
each case addressed or telecopied to the party to whom notice is being given at
its address or telecopier number as set forth below next to its signature or, as
to each party, at such other address or telecopier number as may hereafter be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section. All such notices, requests, demands and
other communications shall be deemed to have been given on (a) the date received
if personally delivered, (b) when deposited in the mail if delivered by mail,
(c) the date sent if sent by overnight courier, or (d) the date of transmission
if delivered by telecopy, except that notices or requests to the Lender pursuant
to any of the provisions of Article II shall not be effective until received by
the Lender.
Section 8.4 Costs and Expenses. The Borrower shall pay on demand all
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costs and expenses, including reasonable legal fees and
disbursements, incurred by the Lender in connection with the Obligations, this
Agreement, the Loan Documents and any other document or agreement related hereto
or thereto, and the transactions contemplated hereby, including all such costs,
expenses and fees, other than internal costs and expenses, incurred in
connection with the administration and performance of the Obligations but
excluding the Lender's costs and expenses in connection with the preparation,
negotiation and execution of the Loan Documents. The parties agree that, in the
event of any dispute arising under this Agreement, the Loan Documents and any
other document or agreement related hereto or thereto, including the collection
and enforcement of the Obligations, the prevailing party in any such dispute
shall be entitled to an award of all costs and expenses, excluding internal
costs and expenses but including without limitation attorneys' fees and legal
costs, which may arise from the enforcement thereof, whether such enforcement is
pursued by filing of a suit or otherwise.
Section 8.5 Binding Effect; Assignment; Complete Agreement; Exchanging
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Information. The Loan Documents shall be binding upon and inure to the
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benefit of the Borrower and the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
thereunder or any interest therein without the Lender's prior written consent.
Section 8.6 Severability of Provisions. Any provision of this Agreement
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which is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.
Section 8.7 Headings. Article, Section and subsection headings in this
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Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 8.8 Governing Law; Jurisdiction. The Loan Documents shall be
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governed by and construed in accordance with English law. Each of the parties
hereto hereby (i) consents to the jurisdiction of the Irish Courts in connection
with any controversy related to this Agreement; (ii) waives any argument that
venue in any such forum is not convenient, and (iii) agrees that a final
judgment in any such suit, action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized on the date
first above written.
36 Fitzwilliam Place BRITESMILE INTERNATIONAL LIMITED
Dublin 2, By: /s/ Brian Delaney
Ireland -----------------
Telecopier: 353-1-661-2456 Name: Brian Delaney
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Attention: Brian Delaney Its: Director
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36 Fitzwilliam Place CAP ADVISERS LIMITED
-------------------- Dublin Branch
Dublin 2 By: /s/ SM Looby
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Ireland Name: Susan Looby
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Telecopier: 353-1-661-2456 Its: Group Financial Controller
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Attention: Susan Looby
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EXHIBIT A TO CREDIT AND SECURITY AGREEMENT
[BRITESMILE INTERNATIONAL LIMITED LETTERHEAD]
To: CAP Advisers Limited
Dublin Branch
36 Fitzwilliam Place
Dublin 2
Ireland
Telecopier:
Attention:
We refer to that certain Unsecured Credit Agreement dated ,2002 (as
amended or modified to date, the "Credit Agreement") by and between Britesmile
International Limited and CAP Advisers Limited Dublin branch. Capitalised terms
used herein but not otherwise defined shall have the same meanings assigned to
them in the Credit Agreement.
Pursuant to Section 2.2(a) of the Credit Agreement, we hereby request or confirm
our request for an Advance on the date, of the type(s) and in the amount(s)
specified below.
Amount of Advance (US$) Date of Borrowing
BRITESMILE INTERNATIONAL LIMITED
By:.............................
................................
Its:............................
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