Exhibit 10.2
EXECUTION
COPY
LOAN AND SECURITY
AGREEMENT
This Loan and Security Agreement (hereinafter
called "Agreement") is between CELSIUS HOLDINGS, INC. , a
Nevada Corporation, authorized to do business in Florida
as CELSIUS PRODUCTS HOLDINGS, INC.
(“Borrower”), CELSIUS, INC. , a Nevada
corporation, authorized to do business in Florida as CELSIUS
PRODUCTS, INC. , (“Celsius Products”) whose address
is 140 N.E. 4 th
Avenue, Suite C, Delray Beach,
Florida 33483 (hereinafter Borrower and Celsius Products are
hereinafter individually and collectively called "Grantor”)
and CDS VENTURES OF SOUTH FLORIDA, LLC , a Florida limited
liability company (hereinafter called "Lender").
1.
Line Of Credit . Lender hereby establishes for a period
extending to September 8, 2012 (the "Maturity Date ") a
non-revolving line of credit (the "Credit Facility ") for Borrower
in the principal amount of SIX MILLION FIVE HUNDRED THOUSAND AND
NO/100THS DOLLARS ($6,500,000.00) (the "Credit Limit"). In
connection herewith, Borrower shall execute and deliver to Lender a
promissory note in the original principal sum of SIX MILLION FIVE
HUNDRED THOUSAND AND NO/100THS DOLLARS ($6,500,000.00) in the form
attached as Exhibit A hereto (the “Note”). All sums
advanced on the Credit Line or pursuant to the terms of this
Agreement (each an "Advance") shall become part of the principal of
said Note.
2.
Grant of Security Interest. Subject to the terms
and conditions of the Note and this Agreement, Grantor, for
consideration as defined herein, and to secure the full and prompt
payment, observance and performance when due of all present and
future obligations and indebtedness of Borrower to Lender, whether
at the stated time, by acceleration or otherwise, howsoever
created, arising or evidenced, whether direct or indirect, absolute
or contingent, whether or not of the same or similar class or of
like kind to any indebtedness incurred contemporaneously with the
execution of this Agreement, and whether now or hereafter existing,
or due or to become due, and whether such indebtedness from time to
time is reduced and thereafter increased, or entirely extinguished
and thereafter reincurred, including without limitation, the
following:
(a) Any
and all amounts owed by Borrower, under, in connection with, and/or
pursuant to the indebtedness evidenced by the Note, including the
outstanding principal balance with interest thereon according to
the provisions thereof, and all obligations thereunder, in
connection therewith and/or pursuant to any and all agreements and
other documents in connection therewith; and
(b) All
sums advanced or expenses or costs paid or incurred (including
without limitation reasonable attorneys' fees and other legal
expenses) by Lender pursuant to or in connection with the Note or
any other agreements and documents in connection therewith plus
applicable interest on such sums, expenses or costs; and
(c) Any
extensions, modifications, changes, substitutions, restatements,
renewals or increases or decreases of any or all of the
indebtedness referenced above; and
hereby grants to Lender a security
interest in the collateral described in Schedule 1, including all
of Borrower’s right, title and interest in and to the stock
of Celsius Products, same being attached to this Agreement and made
a part hereof (hereinafter collectively called the "Collateral").
Celsius Products is a wholly owned subsidiary of the Borrower and
the consideration for such granting to the Lender of the security
interest described herein is the direct benefit which will be
extended to Celsius Products by the Borrower.
3.
Definitions. The following terms shall have the following
meanings
“Accounts” means all Accounts as
that term is defined in Article 9 of the UCC;
“Chattel Paper” means all Chattel
Paper as that term is defined in Article 9 of the UCC;
“Commercial Tort Claims”
means all Commercial Tort Claims as that term is defined in Article
9 of the UCC;
“Common Stock” means the
Borrower’s common stock, par value $0.001 per
share;
“Consignments” means all
Consignments as that term is define in Article 9 of the
UCC;
“Contracts” means all
contracts, undertakings, franchise agreements or other agreements
(other than rights evidenced by Chattel Paper, Documents or
Instruments, as those terms are defined above and below) in or
under which the Borrower may now or hereafter have any right, title
or interest, including, without limitation, with respect to an
Account, and any agreement relating to the terms of payment or the
terms of performance thereof;
“Copyrights” means (a)
all copyrights of the United States or any other country; (b) all
copyright registrations filed in the United States or in any other
country; and (c) all proceeds thereof;
“Copyright License”
means all agreements, whether written or oral, providing for the
grant by the Borrower of any right to use any Copyright;
“Deposit Accounts” means
all Deposit Accounts at that term is defined in Article 9 of the
UCC ;
“Documents” means all
Documents as that term is defined in Article 9 of the
UCC;
“Encumbrance(s)” means
all Encumbrance(s) as that term is defined in Article 9 of the
UCC;
“Equipment” means all
Equipment as that term is defined in Article 9 of the
UCC;
“Fixtures” means
all Fixtures as that term is defined in Article 9 of the
UCC;
“General Intangibles”
means all General Intangibles as that term is defined in Article 9
of the UCC;
“Goods” means all Goods
as that term is defined in Article 9 of the UCC;
“Grantor” means
collectively, CELSIUS, INC., a Nevada corporation, authorized to do
business in Florida, as CELSIUS PRODUCTS, INC.
and CELSIUS HOLDINGS, INC., a Nevada
corporation.
“Health-Care-Insurance
Receivables” means all Health-Care-Insurance Receivables as
that term is defined in Article 9 of the UCC;
“Instruments” means all
Instruments as that term is defined in Article 9 of the
UCC;
“Inventory” means all
Inventory as that term is defined in Article 9 of the
UCC;
“Investment Property”
means all Investment Property as that term is defined in Article 9
of the UCC;
“Letters of Credit”
means all Letters of Credit as that term is defined in the Article
5 of the UCC;
“Letter-of-Credit
Rights” means all Letter-of-Credit Rights as that term is
defined in Article 9 of the UCC;
“Patents” means (a) all
letters patent of the United States and all reissues and extensions
thereof, (b) all applications for letters patent of the United
States and all divisions, continuations and continuations-in-part
thereof or any other country, including, without limitation, any
thereof referred to in any schedule attached hereto and (c) all
proceeds thereof, including the goodwill of the business connected
with the use of and symbolized by the Patents;
“Patent License” means
all agreements, whether written or oral, providing for the grant by
the Borrower of any right to manufacture, use or sell any invention
covered by a Patent, including, without limitation, any thereof
referred to in any schedule attached hereto;
“Payment Intangibles”
means all Payment Intangibles as that term is defined in Article 9
of the UCC;
“Proceeds” means all
Proceeds as that term is defined in Article 9 of the
UCC;
“Promissory Note(s)”
means as that term is defined in Article 9 of the UCC;
“Software” means
all Software as that term is defined in Article 9 of the UCC
;
“Stock” means all of the
common stock of Celsius Products;
“Supporting Obligations”
means all Supporting Obligations as that term is defined in Article
9 of the UCC;
“Tangible Chattel Paper”
means all Tangible Chattel Paper as that term is defined in Article
9 of the UCC;
“Trademarks” means (a)
all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether registered in the
United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof or any other
country or any political subdivision thereof or otherwise,
including, without limitation, any thereof referred to in any
schedule attached hereto; (b) all renewals thereof; and (c) all
proceeds thereof, including the goodwill of the business connected
with the use of and symbolized by the Trademarks;
“Trademark License”
means any agreement, written or oral, providing for the grant of
any right to use any Trademark.
“UCC” means the Uniform
Commercial Code as in effect from time-to-time in the State of
Florida and State of Nevada.
4.
Representations, Warranties and Covenants of Grantor.
Grantor expressly represents, warrants and covenants to
Lender as follows:
(a) The
address appearing with Grantor's signature below is the address of
Grantor's principal office. If any part of the
Collateral is not located at Grantor's principal office, it will be
located at such other locations as Grantor, or any other entity
affiliated with Grantor, may utilize in its business from time to
time, and Grantor hereby covenants to notify Lender of any such
additional location(s).
(b) If
Grantor does not keep the records concerning the Collateral and
concerning accounts, general intangibles, mobile goods and contract
rights at Grantor’s principal office, same will be located at
such other locations as Grantor, or any other entity affiliated
with Grantor, may utilize in its business from time to time, and
Grantor hereby covenants to notify Lender of any such additional
location(s).
(c) Grantor
will give Lender sixty (60) days prior written notice of any change
in (i) Grantor's principal office, the location of the Collateral
or the location of the records described above, or (ii) the
Ownership of Grantor's business, (iii) the principals responsible
for the management of Grantor's business, (iv) Grantor's company
structure or identity, or (v) Grantor's name or trade name, or
prior to commencing to use an assumed name not set forth in this
Agreement.
(d) If
any of the Collateral is to be or has been attached to real estate,
the legal description of the real estate is attached to this
Agreement as Schedule 2 and made a part hereof.
(e) If
Grantor does not have a record interest in the real estate
described above, the record Owner is indicated on the attached
Schedule 2.
(f) Without
the prior written consent of Lender, Grantor will not move, sell,
lease, permit any encumbrance on or otherwise dispose of the
Collateral, other than its inventory in the ordinary course of its
business. Grantor represents and warrants that Grantor
and/or one or more of the Grantor’s affiliated entities are
the owners of the Collateral, free and clear of all liens, charges,
interests, and encumbrances, other than in favor of Lender, that no
other person or other entity has any interest in the Collateral
whatsoever, and that Grantor will defend same against all adverse
claims and demands.
(g) Grantor
will keep the Collateral insured by such companies, in such amounts
and against such risks as shall be acceptable to Lender, and the
Lender hereby acknowledges that the current levels of insurance
maintained by Grantor are acceptable for the first year of the
Note, with loss payable and additional insured clauses in favor of
Lender as are satisfactory to Lender. Grantor will deposit such
insurance policies with Lender. Grantor hereby assigns to Lender
and grants to Lender a security interest in any return of unearned
premium due upon cancellation of any such insurance and directs the
insurer thereunder to pay to Lender all amounts so due. All amounts
received by Lender in payment of insurance losses or return of
unearned premium may, at Lender's option, be applied to the
indebtedness by Lender, or all or any part thereof may be used for
the purpose of repairing, replacing or restoring the
Collateral. Notwithstanding the foregoing, if there is
no default under the Note, at the request of the Grantor, and upon
the approval of Lender in its sole discretion, amounts received by
Lender in payment of insurance losses or return of unearned premium
shall be used for the purpose of repairing, replacing or restoring
the Collateral. If Grantor fails to maintain
satisfactory insurance, Lender shall have the option, but not the
obligation, to obtain such insurance in such amounts as Lender
deems necessary, and Grantor agrees to repay, with interest at the
highest rate applicable to any indebtedness which this Agreement
secures, all amounts so expended by Lender.
(h)
Borrower represents and warrants to Lender that all financial
statements, income tax returns and credit information delivered by
Borrower to Lender accurately reflect the financial condition and
operations of Borrower at the times and for the periods therein
stated. So long as this Agreement is in force and
effect, Borrower agrees to deliver to Lender within one hundred
twenty (120) calendar days after the end of each of
Borrower’s fiscal years, a complete and accurate copy of
Borrower’s consolidated audited financial statements (with
notes), prepared by an independent certified public accountant
acceptable to Secured party (“CPA”), including
statements of cash flow, and a balance sheet and
statement of income, together with all schedules, all prepared in
accordance with generally accepted accounting principles
(“GAAP”). Borrower shall provide Lender with a copy of
its consolidated federal income tax return within fifteen (15) days
of filing (including all schedules and extensions). Borrower shall
also provide internally prepared condensed unaudited monthly
statements without notes but otherwise meeting all the requirements
of the annual statements no later than thirty (30) days after each
month end and internally prepared condensed quarterly financial
statements with partial notes (which are included in the Form 10-Q)
but otherwise meeting all the requirements of the annual statements
no later than forty five (45) days after the end of each fiscal
quarter end or such other date as requested by Lender for
statements other than the quarterly statements, acceptable to
Security Party and its accountants as well as financial statements
at such other times as requested by Security Party.
(i) Lender shall
not be deemed to have waived any of its rights in any Collateral
unless such waiver is in writing and signed by an authorized
representative of Lender. No delay or omission by Lender
in exercising any of Lender's rights s
