EXHIBIT 10.8
DATED 2 FEBRUARY 2000
GLOBAL INFORMATION GROUP U.S.A., INC.
as Borrower
and
NEWICK DEVELOPMENTS LIMITED
as Lender
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FIRST LOAN AGREEMENT
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2 Xxxxxxxxx' Xxx, Xxxxxx XX0X 0XX
Tel: 0000 000 0000 Fax: 0000 000 0000
THIS FIRST 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) NEWICK DEVELOPMENTS LIMITED (the "Lender")
BACKGROUND
A. The Borrower (1) Chatelin Capital Partners Limited ("CCP") (2) Jolec
Trading Limited (3) Xxxxxxx Xxxx (4) Xxxxxx Invest AG ("Xxxxxx") (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.
B. This agreement is the First Loan Agreement referred to in clause 12.2
of, and the sixth schedule to, the Agreement.
C. Capitalised expressions not defined in this First Loan Agreement shall
have the meanings given to them in clause 1.1 of the Agreement.
D. The Lender has agreed to offer the Borrower a loan facility in the
maximum aggregate amount of US$100,000 ("First Loan Facility") on the
following terms and conditions.
IT IS AGREED as follows:
1. Amount
A maximum aggregate amount of US$100,000.
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 First 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 First Loan Agreement duly
executed by the Borrower.
4. Drawdown
The Loan shall be drawn down in not more than one tranche comprising the full
amount of the Loan Facility on the date of Completion (as defined in the
Agreement) ("Drawdown Date"), after which date any unutilised amount of the 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 First 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 First 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.
5.2 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 Xxxxxx.
5.3 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 First 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
First 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 First 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 First 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
13.5 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$ 2,500 , 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:
NEWICK DEVELOPMENTS LIMITED
/s/ Intertrust (Curacao) N.V.
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By: Xxxxxxx Xxxxx, Managing Director
SCHEDULE
1. THE AGREEMENT
2. THE ESCROW AGREEMENT
