FACILITY AGREEMENT made the day of 2001
BETWEEN VOICE IQ INC., a company duly incorporated in the Province of Ontario,
Canada and having its offices at 000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx,
Xxxxxx ( VIQ )
AND B2G LEGAL PTY LTD ACN 094 750 679 a company duly incorporated in the
State of New South Wales, Australia and having its offices at Xxxxx 0,
000 Xxxxxxx Xxxxxx, Xxxxxx XXX 0000 ( B2GL )
WHEREAS
A. B2GL's issued capital consists of one hundred (100) ordinary shares
which are owned by X0X.xxx Limited (ACN 090 940 613) (X0X.XXX).
B. VIQ wishes to be allotted one hundred (100) ordinary shares in the
capital of B2GL, thus making VIQ an equal shareholder with X0X.xxx in
B2GL.
C. B2GL is the owner of all of the issued shares in the capital of
Auscript Pty Limited ACN 082 664 220 a company duly incorporated in the
State of New South Wales, Australia and having its offices at Xxxxx 0,
00-00 Xxxxxxxxx Xxxxxx, Xxxxxx XXX 0000 ( AUSCRIPT ).
D. VIQ has made a loan of Four hundred and fifty thousand dollars
($450,000) to X0X.xxx (the FIRST LOAN), the proceeds of which were used
by B2GL to acquire all of the issued shares in the capital of Auscript.
E. B2GL has offered to assume all of the liabilities and obligations of
X0X.xxx under the first loan.
F. Auscript is indebted to Lost Ark Nominees Pty Limited ACN 071 935 423 (
LOST ARK ) in the principal sum of one million dollars ($1,000,000)
(the LOST ARK DEBT ).
G. B2GL has requested VIQ to provide B2GL with the further sum of one
million dollars ($1,000,000) (the SECOND LOAN ) to be used to repay the
Lost Ark debt.
H. VIQ has agreed to make the second loan to B2GL on the terms and
conditions contained or referred to in this agreement.
NOW THIS AGREEMENT WITNESSES as follows:
1. DEFINTIONS AND INTERPRETATIONS
1.1 DEFINITIONS
In this agreement unless the context otherwise requires:
BUSINESS DAY means a day (except a Saturday, Sunday or public holiday)
on which banks are open for business in Sydney;
B2G GROUP means B2GL and Auscript jointly and each of them severally.
DEBT means the aggregate from time to time of the Principal Outstanding
together with interest, legal costs and expenses and all other money
actually or contingently payable by B2GL to VIQ under this agreement;
DRAWDOWN NOTICE means a notice substantially in the form of Annexure A
duly completed and signed by or on behalf of B2GL or in any other form
(including verbal) as VIQ in its absolute discretion accepts;
EVENT OF DEFAULT has the meaning given to that term in clause 11;
FACE VALUE means $1,450,000;
NOTE means the convertible note issued, or to be issued, by B2GL in
accordance with the terms set out in Annexure B which terms form part
of this agreement;
PRINCIPAL OUTSTANDING means the total principal amount of the first
loan and the second loan represented by the Note;
SECURITY means a Deed of Mortgage of Securities from B2GL in favour of
VIQ of all the issued shares in the capital of Auscript and the Note;
SHAREHOLDER AGREEMENT means the Shareholder Agreement between X0X.xxx
and VIQ setting out their agreement as to how B2GL will be owned and
its business will be managed by them;
THE B2GL SHARES means the one hundred (100) ordinary shares in the
capital of B2GL referred to in Recital B.
1.2 INTERPRETATION
In this agreement unless the context otherwise requires:
(a) reference to a person includes any other entity recognised by
law and vice versa;
(b) words importing the singular number include the plural number
and vice versa;
(c) any reference to any of the parties by their defined terms
includes that party's executors, administrators or permitted
assigns or, being a company, its successors or permitted
assigns;
(d) clause headings are for reference purposes only;
2. LIMIT
The maximum principal amount of the second loan to be made available
under this agreement is $1 million (the LIMIT) which is to be used by
B2GL to repay the Lost Ark debt. B2GL may make one drawing only of $1
million under this agreement in respect of the second loan when all
conditions precedent in clause 4 are satisfied and B2GL must draw the
second loan within 30 days of execution of this agreement, otherwise
the obligation of VIQ to make the loan is terminated.
3. DRAWING AND ASSUMPTION OF LIABILITY FOR FIRST LOAN
(a) VIQ will make available the drawing of the second loan by way
of a cash advance on the day of receipt of the Drawdown
Notice, or when that day is not a Business Day, on the next
following Business Day, and subject to satisfaction of clause
4.
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(b) VIQ hereby consents to the assumption by B2GL of all of the
liabilities and obligations of X0X.xxx under the first loan.
4. CONDITIONS PRECEDENT
VIQ's obligation to make available the drawing of the second loan under
this agreement is subject to the following conditions precedent:
(a) The directors of B2GL resolve to issue the Note to VIQ for an
aggregate Face Value of $1,450,000, as specified in the
Drawdown Notice;
(b) on the Business Day of the proposed drawdown date of the
second loan (being 2 January, 2001) VIQ has received from B2GL
a duly completed Drawdown Notice;
(c) no event has occurred which constitutes or which with the
giving of notice or the lapse of time would constitute an
Event of Default; and
(d) VIQ has first received evidence that the Security and
Shareholder Agreement in form and substance satisfactory to
VIQ has been entered into.
VIQ may waive any one or more of these conditions.
5. NOTE
B2GL must issue the Note to VIQ upon settlement of the cash advance
made available under the second loan pursuant to the Drawdown Notice.
6. EXPIRY OF CONVERSION RIGHTS
The right of VIQ to convert the Note to The B2GL Shares will expire at
5pm on the 60th day after the date of issue of the Note (the CONVERSION
RIGHT EXPIRY DATE) (both inclusive).
7. REPAYMENT
The Note may be redeemed by repayment of the Debt and satisfying all
other terms of the Note (but not until after the Conversion Right
Expiry Date). B2GL must repay all outstanding Debt not later than 5pm
on the day which is 180 days after the date of issue of the Note (the
FACILITY EXPIRY DATE) (both inclusive).
8. INTEREST
B2GL must pay interest at the rate of 7% per annum on the Principal
Outstanding in arrears from the 61st day following the drawdown by B2GL
of the second loan (the INTEREST COMMENCEMENT DATE) as follows.
(a) Accrued interest will be calculated on daily balances of the
Principal Outstanding and will be payable monthly in arrears,
the first payment being payable on the date one month after
the Interest Commencement Date and subsequent payments on the
same day of each succeeding month; and
(b) on any day B2GL redeems the Note, in respect of the period
since the date interest was last paid under clause 8(a).
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9. UNDERTAKINGS
B2GL undertakes that until the Principal Outstanding is repaid in full
or converted into The B2G Shares:
(a) no dividend will be declared or paid by B2GL to its
shareholders;
(b) B2GL will issue no shares or rights or options for shares in
its capital;
(c) B2GL will not grant any charge or other security without VIQ's
prior written consent;
(d) B2GL will cause Auscript to carry on its business in the
normal course;
(e) B2GL will not transfer or otherwise dispose of or mortgage or
charge any of the shares in Auscript;
(f) B2GL will not cause Auscript to issue any shares in the
capital of Auscript;
(g) B2GL will not permit Auscript to grant any charge over its
assets or undertaking or to make any borrowings other than
trade borrowings in the normal course of the business of
Auscript without obtaining the prior written consent of VIQ;
and.
(h) B2GL will not permit Auscript to declare or pay any dividend
to its shareholders without obtaining the prior written
consent of VIQ.
10. REPRESENTATIONS AND WARRANTIES
VIQ has entered into this agreement relying on the following
representations by X0XX. X0XX represents and warrants to VIQ that now
and at all times until payment of the Debt that:
(a) no event has occurred which constitutes or which with the
giving of notice or the lapse of would constitute an Event of
Default;
(b) B2GL is duly incorporated under the laws of the place of its
incorporation and has the power and authority to enter this
agreement and has undertaken and complied with the necessary
corporate procedures to ensure this agreement is enforceable
and binding on it;
(c) this agreement and the Security constitute legally valid,
binding, and enforceable obligations of B2GL;
(d) B2GL is the legal and beneficial owner of all of the issued
shares in the capital of Auscript and that those shares are
free and clear of any charge lien or encumbrance upon the
payment of the $1,000,000 second loan to Lost Ark for the
purpose of discharging the Lost Ark debt ;
(e) Each of the shares in Auscript is fully paid up;
(f) To the best of the knowledge of B2G Group, all information
provided to VIQ in connection with the B2G Group and Lost Ark
is true in all material respects and is not, by omission or
otherwise, misleading in any material respect;
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(g) X0X.xxx, X0XX and Auscript have filed all corporate notices
and effected all registrations with the Australian Securities
and Investments Commission and all those filings and
registrations are current, complete and accurate;
(h) To the best of the knowledge of B2G Group, B2G Group are not
in breach in any material respect under any agreement binding
upon them that has not been disclosed to VIQ;
(i) To the best of the knowledge of B2G Group, the financial
statements and accounts of the B2G Group:
a. disclose a true and fair view of the affairs,
financial position and assets and liabilities of the
B2G Group as at the date of their preparation and of
the income, expenses and results of operations of the
B2G Group as at the date of their preparation;
b. were prepared in accordance with Australian
Accounting Standards and the requirements of the
Corporations Law and all other applicable laws;
c. contain proper and adequate provision for and full
disclosure of all liabilities (including, but not
limited to, any Tax liabilities), whether actual,
contingent, prospective or otherwise; and
d. are not affected by any unusual, extraordinary,
exceptional or non-recurring items.
(j) To the best of the knowledge of B2G Group, since the
preparation of the financial statements and accounts of the
B2G Group there has been no material adverse change in the
assets, liabilities, turnover, earnings, financial condition,
trading position or prospects of the B2G Group;
(k) B2GL is not a trustee of any trust or settlement;
(l) Except as disclosed to VIQ, B2GL and Auscript have not entered
into any service contract with any of its officers or
employees which provides for payment of any remuneration in
excess of $100,000 per annum, and has not agreed to pay any
retirement allowances to, or superannuation contributions in
respect of, any of its officers or employees (except as
required by law);
(m) To the best of the knowledge of B2G Group, no action has been
taken in respect of B2GL or Auscript for winding up,
dissolution, de-registration or reorganisation; or for the
appointment to or over B2GL or Auscript or any of their assets
of any liquidator, provisional liquidator, administrator,
receiver, receiver and manager, trustee, other controller (as
defined in the Corporations Law) or similar official.
11. SECURITIES
B2GL agrees to give to VIQ the Securities as security for the payment
of the Debt and the due performance of B2GL's other obligations
hereunder.
12. EVENTS OF DEFAULT
(a) At the option of VIQ, the Debt will become immediately due and
payable by B2GL to VIQ notwithstanding any previous delay or
waiver by VIQ if any of the following
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occurs: There is default by B2GL in the performance of any
term, agreement, or condition contained in or implied by this
agreement or the Security.
(b) Any indebtedness or obligation of B2GL to any person,
including VIQ is not paid, met, or satisfied when due or
becomes due and payable before its specified maturity or B2GL
defaults under any charge or security in favour of any person
except debts incurred in the ordinary course of business where
those debts are reasonably disputed B2GL.
(c) A receiver, receiver and manager, controller, administrator,
liquidator, provisional liquidator, trustee, inspector,
official manager, or similar person is appointed to, or exists
in relation to, B2GL or B2GL's undertaking or any part of its
undertaking.
(d) An application for winding up or similar process of B2GL is
presented or an order is made or any effective resolution is
passed for the winding up of B2GL.
(e) All or any part of this agreement or the Security becomes
void, illegal, invalid, unenforceable by operation of law or
by act or omission of B2GL.
(f) Any warranty, misrepresentation or statement by any party is
or becomes false, misleading or incorrect when made or
regarded as made by the party.
13. ADMINISTRATIVE PROVISIONS
13.1 NOTICE
Any notice or other communication of any nature which must be given,
served or made under or in connection with this agreement or any
Security:
(a) must be in writing in order to be valid;
(b) is sufficient if executed by the party giving, serving or
making the same or on its behalf by any attorney, director,
secretary, other duly authorised officer or solicitor of such
party;
(c) will be deemed to have been duly given, served or made in
relation to a person if it is delivered or posted by prepaid
post to the address, or sent by telex or facsimile to the
number of that person set out herein (or at such other address
or number as is notified in writing by that person to the
other parties from time to time); and
(d) will be deemed to be given, served or made:
(i) (in the case of prepaid post) on the fifth day after
the date of posting;
(ii) (in the case of telex) on receipt by the sender of
the recipient's answerback code and number;
(iii) (in the case of facsimile) on receipt of a
transmission report confirming successful
transmission; and
(iv) (in the case of delivery by hand) on delivery.
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The fax number of the B2GL is 61 2 9233 2777; and of VIQ is 1 905 948
8276.
13.2 STAMP DUTY AND COSTS
B2GL must pay all stamp duty on or arising in connection with this
agreement, the Security and any other related documentation. Each part
will pay its own legal and other costs and expenses arising directly or
indirectly with respect to the preparation, execution, completion and
performance of this agreement or any related documentation, save that
B2GL agrees to indemnify VIQ in respect of all legal costs on a
solicitor and own client basis, and disbursements incurred by VIQ in
enforcing or attempting to enforce this agreement or the Securities.
13.3 GOVERNING LAW
This agreement will be governed by the laws of New South Wales. The
parties submit to the non-exclusive jurisdiction of the courts of that
State.
13.4 WAIVER
The failure or omission of a party at any time to:
(a) enforce or require the strict observance of or compliance with
any provision of this agreement; or
(b) exercise any election or discretion under this agreement,
will not operate as a waiver of them or of the rights of a party,
whether express or implied, arising under this agreement.
13.5 FURTHER ASSURANCE
Each party must sign, execute and complete all additional documents
which may be necessary to effect, perfect, or complete the provisions
of this agreement and the transactions to which it relates.
13.6 SEVERABILITY
If any part of this agreement is or becomes illegal, invalid or
unenforceable in any relevant jurisdiction, the legality, validity or
enforceability of the remainder of the agreement will not be affected
and this agreement will be read as if the part had been deleted in that
jurisdiction only.
13.7 ENTIRE UNDERSTANDING
This agreement contains the entire understanding and agreement between
the parties as to the subject matter of this agreement.
13.8 MERGER
The obligations contained in this agreement will continue until
satisfied in full.
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13.9 EXECUTION BY COUNTERPARTS
This agreement may consist of one or more counterpart copies and all
counterparts will, when taken together, constitute the one document.
14. GOODS AND SERVICES TAX
14.1 DEFINITIONS AND INTERPRETATIONS
For the purpose of this clause unless the context otherwise requires:
(a) "BORROWER" means B2GL;
(b) "GST LEGISLATION" means A New Tax System (Goods and Services
Tax) Xxx 0000 and any related tax imposition act (whether
imposing tax as a duty of customs excise or otherwise) and
includes any legislation which is enacted to validate
recapture or recoup the tax imposed by any of such acts;
(c) "GST" means any tax imposed by or through the GST Legislation
on supply (without regard to any input tax credit);
(d) "INPUT TAX CREDIT" includes reduced input tax credit.
(e) "LENDER" means VIQ;
(f) "REPRESENTATIVE" of a Lender means a representative member of
a GST group to which the relevant Lender belongs;
(g) "SUPPLY" means any supply (within the meaning which it bears
in the GST Legislation) by the Lender under this Agreement;
and
(h) where any other term is used in this clause which is defined
in the GST legislation or the TPA it shall have the meaning
which it bears in the GST Legislation, or the TPA as
appropriate.
14.2 INDEMNITY
The Borrower hereby agrees to indemnify the Lender and hold the Lender
indemnified against:
(a) any liability to pay or reimburse GST payable in consequence
of the Lender or any receiver manager or other person
exercising any rights powers or remedies or any of its agents
pursuant to this document or the Securities (including without
limitation any supply of property which is or becomes the
subject of this document or the Securities) whether or not
such liability is imposed directly upon the Lender agent
receiver manager or other person by the GST Legislation or by
virtue of any indemnity or contractual obligation or
otherwise; and
(b) any loss which the Lender may incur by reason of the
imposition of GST on any other Supply (including any supply to
the Borrower) which is not recovered under clause 14.3.
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14.3 REIMBURSEMENTS
If this document requires the Borrower to reimburse or contribute to
the cost of an amount paid or payable by the Lender in respect of an
acquisition from a third party (the reimbursed costs) and an input tax
credit is available to the Lender in respect of that acquisition, the
amount required to be reimbursed or contributed (or taken into account)
shall be reduced by the amount of any input tax credit available to the
Lender in respect of such an acquisition, before making adjustments
under clause 14.4.
14.4 GROUP
Should any liability for payment of GST be imposed upon a
Representative, this clause shall still apply as if the GST was imposed
upon the Lender and as if the Lender was entitled to any input tax
credits and or any reduced input tax credits relating to the relevant
Supply.
IN WITNESS WHEREOF the agreement has been executed the day and year first above
written.
)
SIGNED for and on behalf ) /s/ Xxxxx X. Xxxxx
of VOICE IQ INC. ) ...............................................
in the presence of: ) (Signature) XXXXX X. XXXXX
/s/ Xxxxxxx Xxxxxx
.............................................
(Signature of Witness)
XXXXXXX XXXXXX
.............................................
(Name of Witness in Full)
SIGNED for and on behalf )
of B2G LEGAL PTY LTD )
ACN 094 750 679 ) ...............................................
in the presence of: ) (Signature)
.............................................
(Signature of Witness)
.............................................
(Name of Witness in Full)
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ANNEXURE A
DRAWDOWN NOTICE
To: Voice IQ Inc.
DRAWDOWN NOTICE
We refer to the Facility Agreement between Voice IQ Inc. and B2G Legal Pty Ltd
dated 2000 (the AGREEMENT). Definitions in the Agreement apply in this notice.
Under clause 3 of the Agreement:
(a) we give you irrevocable notice that we wish to draw on
2000 (DRAWDOWN Date);
[NOTE: DATE MUST BE BUSINESS DAY]
(b) the principal amount to be drawn is $1,000,000;
[NOTE: AMOUNT MUST COMPLY WITH THE LIMIT IN CLAUSE 2]
(c) please remit funds to for the purpose of repaying
the Lost Ark debt;
(d) we require the funds for the purposes specified under clause 2
of the Agreement;
(e) we represent and warrant that:
(i) the representations and warranties by B2GL in the
Agreement are true as though they had been made at
the date of this Drawdown Notice and the Drawdown
Date in respect of the facts and circumstances then
subsisting;
(ii) no Event of Default is subsisting or will result from
the drawing.
Definitions in the Agreement apply in this Drawdown Notice.
Capacity
------------------------------ ------------------------------
For and on behalf of B2G Legal Pty Ltd
DATED 2000
SCHEDULE 1
CONVERTBILE NOTE CERTIFICATE
B2G LEGAL PTY LTD
ACN 094 750 679
THIS IS TO CERTIFY THAT
VOICE IQ INC.
Is the registered holder of one (1) convertible note of $1,450,000, fully paid,
maturing on the FACILITY EXPIRY DATE subject to the Constitution of the Issuer
and the Facility Agreement made between the Issuer and Voice IQ Inc dated
2000. The right of VIQ to convert the Note to THE B2GL Share
will expire at 5m on the 60th day after the date of issue of this Note.
DATED
THE COMMON SEAL of )
B2G LEGAL PTY LTD was )
affixed to this document in )
accordance with its Constitution )
in the presence of: )
)
---------------------------------) ------------------------------
Signature of secretary ) Signature of director
)
---------------------------------) ------------------------------
Name of secretary - please print Name of director - please print
