EXHIBIT 10.11
DATED 2 FEBRUARY 2000
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GLOBAL INFORMATION GROUP U.S.A., INC.
as Borrower
and
XXXXXX INVEST AG
as Lender
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SECOND LOAN AGREEMENT
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2 Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX
Tel: 0000 000 0000 Fax: 0000 000 0000
THIS SECOND LOAN AGREEMENT is made on 2 February 2000
BETWEEN:
(1) GLOBAL INFORMATION GROUP U.S.A., INC. (registered number [ ])
having its registered office at Xxx Xxxxxxxxxxx Xxxxx, Xxxxx 0000, Xxx
Xxxx, XX 00000, XXX (the "Borrower"); and
(2) XXXXXX INVEST AG (the "Lender"), having its principal place of
business at c/o EMB Boratung und Service XX, Xxxxxxxxxxxxx 0x, XX-0000,
Xxx, Switserland.
BACKGROUND
M. The Borrower (1) Chatelin Capital Partners Limited ("CCP") (2) Jolec
Trading Limited (3) Xxxxxxx Xxxx (4) Newick Developments Limited
("Newick") (5) and the Lender (6) have entered into a share purchase
and shareholders agreement ("Agreement") (appended as Schedule 1) dated
14 January 2000 relating to the Borrower.
N. This agreement is the Second Loan Agreement referred to in clause 12.2
of, and the sixth schedule to, the Agreement.
O. Capitalised expressions not defined in this Second Loan Agreement shall
have the meanings given to them in clause 1.1 of the Agreement.
P. The Lender has agreed to offer the Borrower a loan facility in the
maximum aggregate amount of US$800,000 ("Second Loan Facility") on the
following terms and conditions.
IT IS AGREED as follows:
1. Amount
A maximum aggregate amount of US$800,000.
2. Purpose
The entire proceeds of the Loan Facility shall be applied by the
Borrower in accordance with clause 10.4.2 of the Agreement.
3. Conditions Precedent
Before a Loan may be drawn down under this Second Loan Agreement, the
Borrower shall deliver to the Lender in form and substance satisfactory
to the Lender (i) a certified copy of a resolution of its Board of
Directors approving the transactions contemplated by this letter and
authorising a specified person or persons to execute this letter and
(ii) a copy of this Second Loan Agreement duly executed by the
Borrower.
4. Drawdown
The Second Loan Facility shall be drawn down in no more than four equal
tranches (each a "Loan") if in the reasonable opinion of the board of
directors of the Borrower, the cash flow statements of the Borrower
show a need for this at any time before the Repayment Date (as defined
in this Second Loan Agreement), after which date any unutilised amount
of the Second Loan Facility shall automatically be cancelled.
The Lender will not be obliged to make available a Loan hereunder if,
on the Drawdown Date, any of the representations in paragraph 12 of
this Second Loan Agreement or clause 7 of the Agreement shall not then
be true and correct in all respects or any of the events specified in
paragraph 13 of this Second Loan Agreement shall have occurred and
shall then be continuing.
5. COVENANTS
5.1 The Borrower shall provide the Lender with cash flow statements in a
form acceptable to the Lender on a monthly basis and further provide us
with information in accordance with clause 11.1 of the Agreement.
5.3 If at any time the Borrower, any of its subsidiaries or any company
controlled by it purchases all or any of the source codes relating to
the bespoke computer software used in the Borrower's business in
accordance with clause 12.4 of the Agreement then the Borrower shall
use it best endeavours to deliver within a reasonable time and in any
event within 30 days of the completion of such purchase an executed
escrow agreement (negotiated in good faith and in accordance with the
principals appended as Schedule 2) over all source codes relating to
the bespoke computer software used in the Borrower's business in favour
of the Lender and Newick.
5.4 If required by the Lender and Xxxxxx, and if the purchase as referred
to in 5.2 by Borrower of the bespoke computer software has not been
realised, the Lender, Xxxxxx and, the Borrower shall - if Lender or
Xxxxxx so requests - negotiate in good faith to provide the Lender and
Xxxxxx with an alternative form of security other than that required
under Clause 5.2 of this First Loan Agreement over any and all source
codes or other intellectual property relating to the bespoke computer
software used in the Borrower's business (other than any which is held
in escrow under Clause 5.2 of this First Loan Agreement). If such
alternative security is agreed, the Borrower undertakes to execute all
documentation required by the Lender and Xxxxxx to perfect and protect
such security.
6. Repayment
The Loans shall be repaid in full on the sooner to occur of (i) an IPO
or Third Party Sale (each as defined in the Agreement), (ii) that date
falling 5 years after the date of Completion, and (iii) any or all of
the equity share capital of the Borrower or its parent undertaking
being admitted or readmitted to an internationally Recognised Stock
Exchange. The relevant date shall be referred to in this Second Loan
Agreement as the Repayment Date.
7. Prepayment
On giving the Lender not less than 15 days' notice, the Borrower may
prepay all or any part of the Loan (but if in part in an amount of
US$50,000 or an integral multiple thereof, if more). The Borrower may
not re-borrow any prepayment. Prepayments shall be made together with
all unpaid interest on the amount prepaid.
8. Interest Periods
The first Interest Period shall commence on the date of disbursement of
the Second loan Facility and end on that date following 18 months
thereafter. Each subsequent Interest Period shall be a period of 3
months commencing on the date following the expiry of the preceding
Interest Period.
If an Interest Period would end on a day which is not a business day,
such Interest Period shall be extended to the next business day.
The first Interest Period of each Loan, other than the first Loan,
shall end on the last day of the then current Interest Period relating
to the first Loan. Thereafter, all Interest Periods relating to such
Loans shall be co-terminous and such Loans shall be treated as one
Loan.
If an Interest Period would otherwise overrun the Repayment Date, such
Interest Period shall be shortened so that such Interest Period ends on
the Repayment Date.
9. Interest
Interest on the Loan will be payable at the rate of 6.5 per cent. per
annum. Interest shall be calculated on a basis of the actual number of
days elapsed and a year of 360 days. Interest shall be payable in
arrears on the last day of an Interest Period ("Interest Payment
Date").
10. Additional Interest
If the Borrower fails to pay any sum due hereunder on its due date, the
Borrower shall pay interest on such sum from the date of such failure
to the date of actual payment (as well after as before judgment) at the
rate of 2.5 per cent. per annum.
11. Payments
All payments (whether capital, interest or otherwise) to be made by the
Borrower under this Second Loan Agreement shall be made without set-off
or counterclaim and free and clear of any deduction in respect of any
present or future taxes of any nature now or hereafter imposed
("Taxes") unless such deduction is required to be made by law, in which
event any affected payment shall be increased to ensure that the Lender
receives a net amount equal to the full amount due had such payment not
been subject to such deduction. The Borrower shall deliver, on being so
requested by the Lender, evidence satisfactory to it that such Taxes
have been paid.
Whenever any payment shall become due on a day which is not a business
day, the due date thereof shall be extended to the next business day
and interest shall be calculated accordingly.
All payments to be made by the Borrower under this Second Loan
Agreement shall be made on the due date for value in immediately
available funds to the Lender as it may, from time to time, instruct
the Borrower.
12. Representations
In addition to the representations, warranties, indemnities and
undertakings given by the Borrower under the Agreement, the Borrower
represents and warrants to the Lender that:-
12.1 it has the power to own its property and assets and carry on its
business as it is now being conducted;
12.2 it has the power to enter into and perform this First Loan Agreement
and the transactions contemplated by this First Loan Agreement and it
has taken all necessary action to authorise the entry into and
performance of this First Loan Agreement and the transactions
contemplated by this First Loan Agreement;
12.3 this First Loan Agreement constitutes the Borrower's legal, valid and
binding obligations enforceable in accordance with its terms;
12.4 the entry into and performance of this First Loan Agreement and the
transactions contemplated by this First Loan Agreement do not and will
not conflict with (i) any law or regulation or any official or judicial
order, or (ii) the Borrower's certificate of incorporation and bylaws;
12.5 to the best of Borrower's knowledge, full disclosure has been made to
us before the date of this First Loan Agreement of all material facts
or circumstances which need to be disclosed to enable us to obtain a
true and correct view of the Borrower's business, undertaking, assets,
liabilities, revenues and affairs (in each case, both current and
prospective) or which ought to be disclosed to any person proposing to
provide finance to the Borrower.
13. Events of Default
All sums due hereunder shall become immediately due and payable on
demand and all the Lender's obligations hereunder shall cease if any of
the following events occurs:
13.1 any sum payable by the Borrower under this First Loan Agreement is not
paid within 30 days after due date; or
13.2 the Borrower fails to comply with any other provisions of this First
Loan Agreement; or
13.3 any representation made in this First Loan Agreement or the Agreement
is incorrect in any respect or, if repeated at any time with reference
to the facts and circumstances then existing, would be so incorrect; or
13.4 the Borrower becomes insolvent, or it suspends making payments (whether
of principal or interest) with respect to all or any class of its debts
or announces an intention to do so; or
13.4 any administrative or other receiver or any manager relating to the
Borrower or any of its property is appointed or any other steps are
taken to enforce any charge or other security over any of its property,
or any steps are taken with a view to putting in force any kind of
attachment, sequestration, distress or execution against the Borrower
or any of its property.
13.6 the Borrower is wound up, dissolved or liquidated ; or
13.7 any event occurs or proceedings taken in relation to the Borrower in
any jurisdiction which has a similar, equivalent or analogous effect to
any of the events detailed in paragraphs 13.4 to 13.6 of this First
Loan Agreement inclusive; or
13.8 the Borrower ceases, or threatens to cease, to carry on all or a
substantial part of its business; or
13.9 any of the property subject to any security in favour of the Lender is
subject to a compulsory purchase order or any order analogous to such
an order.
14. Fees and Costs
The Borrower shall, on the date on which the first Loan Facility is
advanced, pay to CCP an arrangement fee of US$ 20,000 , pro rata as
with the disbursements of the Loan Facility.
The Borrower shall, on being so requested by the Lender, pay all
reasonable costs and fees incurred by the Lender in connection with the
preservation of its rights under, or the enforcement of, this First
Loan Agreement or any security document in favour of the Lender.
15. General Indemnity
The Borrower shall, on being so requested by the Lender, indemnify the
Lender against any loss or expense which the Lender may sustain or
incur as a consequence of the occurrence of any of the events referred
to in paragraph 13 of this First Loan Agreement.
16. law and jurisdiction
The terms of clause 22 of the Agreement shall be incorporated into this
First Loan Agreement.
17. Notices
The terms of clause 20 of the Agreement shall be incorporated into this
First Loan Agreement.
IN WITNESS whereof the parties have executed this First Loan Agreement the day
and year first above written.
THE LENDER:
GLOBAL INFORMATION GROUP U.S.A., INC.
By /s/Xxxxxxx X. Xxxx, President
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THE BORROWER:
XXXXXX INVEST AG
By /s/Xxxxx X. Xxxxxx, Director
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SCHEDULE
1. THE AGREEMENT
2. THE ESCROW AGREEMENT PRINCIPLES
