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Exhibit 10.18
AGREEMENT dated as of June 25, 1997 between Russian Wireless
Telephone Company, Inc. (the "Borrower"), a Delaware corporation formerly known
as Telcom Group USA, Inc. having offices for the transaction of business located
at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000; and Inversiones Santa
Catalina, N.V. (the "Lender"), a joint stock corporation organized under the
laws of the Netherlands Antilles having offices for the transaction of business
located at X.X. Xxx 0000, Xxxxxxx, Xxxxxxxxxxx, Antilles.
WHEREAS, in May 1995, the Borrower, redeemed from the Lender
800,000 shares of Borrower's $.01 par value common stock and agreed to pay
therefor the sum of $600,000 (the "Redemption Price"); and
WHEREAS, as evidence of Borrower's obligation to pay the
Redemption price to Lender, Borrower made and issued on May 22, 1995 a certain
promissory note which provided, among other things, that Borrower would pay to
the Lender on May 22, 2000 the principal sum of $600,000, together with interest
thereon computed at the rate of 2% per annum (the "Note"); and
WHEREAS, the Borrower desires to borrow the sum of $150,000
from Lender in accordance with the terms, and subject to the conditions
hereinbelow set forth; and
WHEREAS, Lender is willing to lend said $150,000 to the
Borrower pursuant to the terms of this agreement,
NOW, THEREFORE, in consideration of the foregoing, and the
mutual terms and conditions hereinbelow set forth, it is agreed, as follows:
1. $150,000 Loan. Borrower hereby acknowledges receipt from
the Lender of the sum of $150,000 (the "Principal") which constitutes the
proceeds of a loan made by the Lender to the Borrower. Borrower hereby promises
that, on the earlier to occur of (i) the closing of its proposed initial public
offering of securities (the "Offering"), and (ii) December 31, 1997, Borrower
shall pay, by bank check, certified check or other immediately available funds,
said Principal (or the outstanding balance thereof remaining unpaid on said
date), together with interest computed on said principal amount (as the same may
be reduced from time to time) from the date first above-written through the date
of such payment, at the rate of 15% per annum (said Principal and interest being
hereinafter referred to collectively as the "Indebtedness"). Anything herein
contained to the contrary notwithstanding, in the event that, for any reason,
Borrower withdraws the registration statement pertaining to the Offering prior
to the declaration of effectiveness thereof by the Securities & Exchange
Commission (the "Commission"), or otherwise ceases (a "Termination") to proceed
with registration of the securities subject to such Offering under the
Securities Act of 1933, as amended (the "Act"), the entire amount of the
Indebtedness shall thereupon become immediately due and payable without further
notice.
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2. Events of Default. Upon the occurrence of any of the
following events (herein called "Events of Default") which shall have occurred
and be continuing:
a. Borrower shall default in the payment of the
Indebtedness when due; or
b. (i) Borrower shall commence any proceeding or
other action relating to it in bankruptcy or seek reorganization, arrangement,
readjustment of its debts, receivership, dissolution, liquidation, winding-up,
composition or any other relief under the Bankruptcy Act, as amended, or under
any other insolvency, reorganization, liquidation, dissolution, arrangement,
composition, readjustment of debt or any other similar act or law, of any
jurisdiction, domestic or foreign, now or hereafter existing; or (ii) Borrower
shall admit the material allegations of any petition or pleading in connection
with any such proceeding; or (iii) Borrower applies for, or consents or
acquiesces to, the appointment of a receiver, conservator, trustee or similar
officer for it or for all or a substantial part of its property; or (iv)
Borrower makes a general assignment for the benefit of creditors; or
c. (i) There shall be commenced any involuntary
proceeding in bankruptcy against Borrower or there shall be taken any action
against Borrower seeking reorganization, arrangement, readjustment of its debts,
liquidation, dissolution, arrangement, composition, readjustment of debt or any
other similar act or law of any jurisdiction, domestic or foreign, now or
hereafter existing, which proceeding or action shall continue for sixty (60)
days undismissed, unbonded or undischarged; or
(ii) there shall be appointed any receiver,
conservator, trustee or similar officer for Borrower or for all or substantially
all of its property, and such appointment shall continue for sixty (60) days
undismissed, unbonded or undisclosed; or (iii) there shall be issued any warrant
of attachment, execution or similar process against substantially all of the
property of Borrower which shall continue for sixty (60) days undismissed,
unbonded and undischarged; or
d. There shall be a material breach of any warranty,
representation or covenant of Borrower contained herein; or
e. A Termination shall occur (as defned in Section 1
hereof),
then, and in any such event the Lender may by written notice to Borrower declare
the entire unpaid Principal outstanding together with accrued interest thereon
at a rate (the "Late Rate") equal to the greater of (i) 12% per annum or (ii)
the highest maximum rate permitted by law, due and payable, and the same shall,
unless such
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default be cured within five (5) days after such notice, forthwith become due
and payable upon the expiration of such five (5) day period, without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived.
3. Acceleration of Payment of the Note. In order to induce
Lender to enter into and execute this Agreement, the parties hereto hereby agree
that the Note is hereby deemed to have been modified to provide that the entire
unpaid balance of the principal amount of the Note, together with all accrued
but unpaid interest due and owing with respect thereto, shall become due and
payable on the date when the Indebtedness shall become due and payable
hereunder.
4. Borrower's Warranties and Representations. Borrower hereby
represents and warrants to the Lender, as follows:
a. Organization and Corporate Power. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware, has all requisite corporate power and authority to
execute this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Borrower does not, and the
consummation of the transactions contemplated hereby will not, violate any
provisions of Borrower's organizational and governing documents, or any
provision of any law, rule, regulation, mortgage, lien, lease, agreement,
instrument, order, arbitration award, judgment or decree to which Borrower or
any of its subsidiaries is a party or by which Borrower or any of its
subsidiaries is bound. Borrower has taken all action required by law, its
organizational and governing documents or otherwise (including action by such
entity's board of directors or other managing body) to authorize its execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement is a valid and binding
agreement of Borrower.
b. Consents. No authorization, consent or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery or performance by
Investor of any obligations hereunder. To the best of Borrower's knowledge, no
registrations, filings, applications, notices, transfers, consents, approvals,
orders, qualifications, waivers or other action of any kind is required by
virtue of the execution and delivery of this Agreement or of the consummation of
the transactions contemplated hereby.
5. Lender's Representations. Lender represents to Borrower, as
follows:
a. Lender has been advised by Borrower, as follows:
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i. Borrower is seeking to borrow up to
$300,000 (including the Principal) from several lenders including the Lender.
THE CLOSINGS OF THE LOANS TO BE MADE TO BORROWER BY SUCH LENDERS (INCLUDING
LENDER) ARE NOT INTERRELATED OR INTERDEPENDENT. ACCORDINGLY, BORROWER MAY
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, AND USE THE PRINCIPAL FOR THE
PURPOSES STATED HEREIN WHETHER OR NOT IT CLOSES ANY OF SUCH OTHER LOAN
TRANSACTIONS.
ii. Lender has received a copy of the
preliminary prospectus which forms a part of the Registration Statement on Form
SB-2 which the Borrower filed with the Commission on March 28, 1997 under
Registration No. 333-24177 (the "Prospectus").
iii. Lender has reviewed the Prospectus, and
is familiar with the various risks identified in the section of the Prospectus
entitled "Risk Factors."
iv. The Principal shall be used by Borrower
as working capital, and for general corporate purposes.
b. Lender is aware of and, in connection with his
review of the Prospectus, Lender has considered, among other things, the
following additional risk factors:
i. The transaction which is the subject of
this Agreement is extremely speculative and should only be made by persons who
can afford to lose the entire principal amount being loaned to Borrower.
ii. The repayment of the Indebtedness will
be wholly dependent upon the completion of the Offering.
6. Miscellaneous. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by all the parties hereto. No delay or
failure on the part of the Lender in exercising any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and it supersedes all prior oral or written agreements, commitments or
understandings with respect to such matters. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Borrower agrees to indemnify and hold harmless the
Lender from and against any costs and expenses (including attorneys' fees and
disbursements) incurred by the Lender in enforcing and preserving the Lender's
rights under this Agreement. This agreement shall be
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interpreted in accordance with the laws of the state of New York without regard
to the conflicts of laws principles thereof.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above-written.
Russian Wireless Telephone Company, Inc.
By:_____________________________________
Xxxxxx X. Xxxxxx, President
Inversiones Santa Catalina, N.V.
By its Managing Director
Holland Intertrust (Curacao) N.V.
By:_____________________________________
Name:___________________________________
Title:__________________________________
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