EXHIBIT 10.1
THIS AGREEMENT dated for reference the 12th day of March, 2002.
AMONG:
MFC BANCORP LTD., a corporation organized under the laws of the
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Yukon Territory, Canada, having an office c/o Suite 1000,
000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0, Xxxxxx
("MFC")
OF THE FIRST PART
AND:
CYBERNET INTERNET SERVICES INTERNATIONAL, INC., a corporation
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organized under the laws of the State of Delaware, U.S.A.,
having an office at Xxxxxx-Xxxxxx-Xxxx 00 - 00, 00000 Xxxxxx,
Xxxxxxx
("Cybernet")
OF THE SECOND PART
AND:
XXXXXXX XXXX, Businessman, x/x Xxxxxx-Xxxxxx-Xxxx 00 - 00,
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00000 Xxxxxx,Xxxxxxx
("Xxxx")
OF THE THIRD PART
AND:
PAOLO DI FRAIA, Businessman, x/x Xxxxxx-Xxxxxx-Xxxx 00 - 00,
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00000 Xxxxxx, Xxxxxxx
("di Fraia")
OF THE FOURTH PART
WHEREAS:
A. Cybernet has, pursuant to the Court Order, called the Shareholder
Meeting;
B. The Shareholder Group and Cybernet have nominated directors for election
to the Board at the Shareholder Meeting;
C. The Shareholder Group and Cybernet wish to settle all outstanding matters
upon the terms hereof; and
X. Xxxx and di Fraia, being the current Chief Executive Officer and Chief
Financial Officer of Cybernet, respectively, wish to settle various
Matters with Cybernet and the Shareholder Group upon the terms
hereof;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the respective
agreements hereinafter set forth, and for other good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged by each of the
parties hereto), the parties acknowledge, declare, covenant and agree as
follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS. When used in this Agreement (including the
Recitals and any Schedules hereto) or any amendment hereto, the following terms
shall, unless otherwise expressly provided, have the following meanings,
respectively:
"AGREEMENT" means this Agreement, as supplemented, amended or otherwise modified
or replaced from time to time and includes the Recitals and Schedules hereto,
and the expressions "ARTICLE" and "SECTION" followed by a number mean and refer
to the specified Article or Section of this Agreement;
"BOARD" means the board of directors of Cybernet;
"CLOSING" means the closing of the transactions contemplated pursuant to this
Agreement;
"CLOSING DATE" means March 12, 2002 or such other date as may be agreed to in
writing by the parties hereto;
"COURT ORDER" means an order of the Chancery Court of Delaware with respect to
convening the Shareholder Meeting dated February 25, 2002, as amended from time
to time;
"D&O POLICY" means the current and existing directors' and officers' liability
insurance policy of Cybernet;
"DI FRAIA AMENDMENT" means the Termination Agreement between di Fraia and
Cybernet and its subsidiaries, substantially in the form of Schedule D hereto;
"XXXX AMENDMENT" means the Termination Agreement between Xxxx and Cybernet and
its subsidiaries, substantially in the form of Schedule E hereto;
"ESCROW ACCOUNT" means the account established pursuant to the Escrow Agreement;
"ESCROW AGREEMENT" means the agreement between Cybernet, MFC, Xxxx, di Fraia and
the escrow holder substantially in the form of Schedule G hereto;
"INDEMNITY AGREEMENT" means an indemnity agreement of Cybernet in favour of each
of the Participating Directors, substantially in the form of Schedule B hereto;
"LOAN AGREEMENT" means a loan agreement between MFC Merchant Bank S.A. and
Cybernet, substantially in the form attached as Schedule C hereto;
"MUTUAL RELEASE" means a mutual release from Cybernet and the Participating
Directors in favour of the Shareholder Group, its officers, directors and
representatives, and the Shareholder Group in favour of the Participating
Directors, substantially in the form as set forth in Schedule A hereto;
"PARTICIPATING DIRECTORS" means di Fraia and all of the directors of Cybernet as
of the date of this Agreement, other than Tristan Libischer;
"SHAREHOLDER CIRCULAR" means the proxy circular of MFC and Ventegis Capital AG
dated February 15, 2002;
"SHAREHOLDER GROUP" means, collectively, MFC, Ventegis Capital AG and Xxxxxx
Xxxx;
"SHAREHOLDER MEETING" means the meeting of the shareholders of Cybernet called
for March 12, 2002 pursuant to the terms of the Court Order, as adjourned from
time to time;
"SHAREHOLDER RELEASE" means a release by the Shareholder Group in favour of the
Participating Directors, substantially in the form set forth in Schedule A
hereto; and
"TIME OF CLOSING" means 9:00 a.m. (local time) on the Closing Date.
SECTION 1.2 HEADINGS, ETC. The division of this Agreement into
Articles and Sections and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
SECTION 1.3 GENDER AND NUMBER. Words imparting the singular number
include the plural and vice-versa and words imparting gender include the
masculine, feminine and gender neutral and vice versa as the context requires.
SECTION 1.4 AMENDMENT. No amendment of any provision of this Agreement
shall be effective unless the same is in writing and signed by each party
hereto.
SECTION 1.5 CURRENCY. Unless otherwise specified herein all references
to Euro means lawful money of the European Union.
SECTION 1.6 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles in the United States.
SECTION 1.7 SCHEDULES. All documents attached and referred to in this
Agreement and the following schedules attached hereto are integral to and form
part of this Agreement:
Schedule A - Mutual Release
Schedule B - Indemnity Agreement
Schedule C - Loan Agreement
Schedule D - di Fraia Amendment
Schedule E - Xxxx Amendment
Schedule F - Stipulated Order
Schedule G - Escrow Agreement
ARTICLE 2
RESTRUCTURING
SECTION 2.1 RESTRUCTURING OF INDEBTEDNESS. MFC confirms to the
Participating Directors that it intends to seek to try to effect a restructuring
of Cybernet's indebtedness substantially upon the terms as set forth in its
draft presentation to the Board dated December 2001, provided that nothing
herein shall in any way constitute a representation, warranty or guarantee by
MFC or any of its officers, directors, agents or representatives that any such
proposed restructuring will be successfully effected.
ARTICLE 3
EMPLOYMENT AMENDMENTS
SECTION 3.1 XXXX AMENDMENT. Cybernet and Xxxx covenant and agree that
all of the employment arrangements between Cybernet, its subsidiaries and Xxxx
will be amended pursuant to the terms of the Xxxx Amendment.
SECTION 3.2 DI FRAIA AMENDMENT. Cybernet and di Fraia covenant and
agree that all of the employment arrangements between Cybernet, its subsidiaries
and di Fraia will be amended pursuant to the terms of the di Fraia Amendment.
ARTICLE 4
RELEASES AND INDEMNITIES
SECTION 4.1 SHAREHOLDER RELEASE. From and after the Time of Closing,
the Shareholder Group hereby agrees to release the Participating Directors
pursuant to the terms of the Mutual Release.
SECTION 4.2 CYBERNET GROUP RELEASE. From and after the Time of
Closing, Cybernet and the Participating Directors hereby agree to release the
Shareholder Group, its affiliates, associates, directors, officers and
representatives pursuant to the terms of the Mutual Release.
SECTION 4.3 INDEMNIFICATION OF CERTAIN DIRECTORS. From and after the
Time of Closing, Cybernet will indemnify the Participating Directors for actions
taken in good faith by such persons in their respective roles as directors and
officers of Cybernet and its subsidiaries, including actions taken with respect
to this Agreement, pursuant to the terms of the Indemnity Agreement.
SECTION 4.4 NON-INTERFERENCE. MFC agrees that neither the Shareholder
Group nor any of its members, subsidiaries or affiliates or nominees on the
Board shall challenge or interfere with such Indemnity Agreement.
SECTION 4.5 EXTENSION OF D&O POLICY. Cybernet shall obtain a one-year
extension to the D&O Policy or a separate insurance policy providing
substantially the same benefits and coverage (the "Extension") for claims
against persons who were its directors and officers based upon actions occurring
on or before the Time of Closing (the Extension to be effectively arranged or
effected on or before the Time of Closing).
SECTION 4.6 CLAIMS UNDER D&O POLICY. In the event that any Claim (as
such term is interpreted pursuant to the D&O Policy or the Extension, as
applicable) is initiated against any of the Participating Directors on or prior
to March 12, 2003 (the "Deductible Deadline"), Cybernet will be solely
responsible for paying the deductible of such D&O Policy or Extension. Cybernet
agrees to place into the Escrow Account an amount equal to the lesser of 50% of
such applicable deductible or Euro 125,000. Such amount shall not be withdrawn
or utilized by Cybernet prior to the Deductible Deadline and shall constitute
trust funds held for and in favour of the Participating Directors.
SECTION 4.7 ESCROW ACCOUNT. Cybernet shall establish an Escrow Account
for the deposit of certain payments as set forth in the Escrow Agreement
substantially in the form of Schedule G hereto.
ARTICLE 5
CREDIT FACILITY
SECTION 5.1 CREDIT FACILITY. MFC agrees to make or arrange a revolving
credit facility to Cybernet and/or its subsidiaries substantially upon the terms
of the Loan Agreement, which credit facility shall be available to Cybernet on
or before the Closing Date to fund the Escrow Account and other payments which
Cybernet is required to make as of the Time of Closing.
ARTICLE 6
BOARD, COURT APPLICATION AND ACCESS
SECTION 6.1 APPROVAL OF SHAREHOLDER GROUP DIRECTORS. Cybernet hereby
covenants and agrees that, on or before March 11, 2002, it shall, by way of a
unanimous resolution of a quorum of the Board passed at a duly convened meeting
of the Board, approve for appointment to the Board all of the directors
nominated by MFC in the Shareholder Circular (the "Board Resolutions").
SECTION 6.2 RESIGNATIONS OF DIRECTORS. Cybernet shall obtain written
resignations (the "Resignations") from Xxxxxx Xxxxxxxxxxxxx, Xxxxxxx Xxxx and
Xxxxxx Xxxxxx on or before March 11, 2002 and provide copies of such
resignations to its counsel, along with irrevocable instructions to such counsel
to deliver them on Closing as set forth in Article 9 hereof. Xxxx and di Fraia
covenant and agree that they will not stand for election as directors to the
Board at the Shareholder Meeting.
SECTION 6.3 WITHDRAWAL OF COURT APPLICATION. MFC shall, effective on
or before the Time of Closing, withdraw its application for a contempt of court
order against Cybernet and Xxxx before the Delaware Chancery Court with
prejudice.
SECTION 6.4 ACCESS TO OFFICES AND RECORDS. Cybernet hereby covenants
and agrees to grant to MFC and its representatives and agents full and complete
access to its offices and records. Cybernet shall forthwith make available to
MFC and its authorized representatives and provide reasonable access (and if
requested, copies) to MFC of all title documents, contracts, financial
statements, minute books, share certificates, share registers, plans, reports
(including forecasts and projections), licences, leases, orders, permits, books
of account, accounting records, constating documents, tax returns, customer
lists, supplier lists, and all other documents, information or data relating to
Cybernet and its business as MFC shall reasonably request. Cybernet shall
afford MFC and its authorized representatives every reasonable opportunity to
have free and unrestricted access to its business and the real property, assets,
undertaking, records and documents of Cybernet. At the request of MFC, Cybernet
shall execute or cause to be executed such consents, authorizations and
directions as may be necessary to permit any reasonable inspection of its
business and any of its property or to enable MFC or its authorized
representatives to obtain full access to all files and records relating to any
of the assets of Cybernet maintained by a third party. At the Shareholder
Group's request, Cybernet shall co-operate with MFC in arranging any such
meetings as it may reasonably request with: (i) employees of Cybernet; (ii)
customers, suppliers, distributors or others who have or have had a business
relationship with Cybernet; and (iii) auditors, solicitors or any other person
engaged or previously engaged to provide services to Cybernet who have knowledge
of matters relating to Cybernet and its business.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF CYBERNET. Cybernet
hereby represents and warrants to MFC, as at the date hereof and the
Closing Date, that:
(a) Organization. Cybernet is duly incorporated and organized and is
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validly existing and in good standing under the laws of the State of
Delaware;
(b) Corporate Power. Cybernet has full corporate right, power and authority
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to enter into and perform its obligations under this Agreement;
(c) Execution of Binding Obligation. This Agreement has been duly executed
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and delivered by Cybernet and this Agreement constitutes legal,
valid and binding obligations of Cybernet, enforceable in accordance
with its terms; and
(d) No Litigation. There are no actions, suits or proceedings pending or,
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to the knowledge of Cybernet, after due enquiry, threatened against or
affecting Cybernet which could adversely affect its obligations
hereunder.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF MFC. MFC hereby
represents and warrants to Cybernet, as at the date hereof and the Closing Date,
that:
(a) Organization. MFC is duly incorporated and organized and is validly
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subsisting and in good standing under the laws of the Yukon
Territory;
(b) Corporate Power. MFC has full corporate right, power and authority to
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enter into and perform its obligations under this Agreement;
(c) Execution of Binding Obligations. This Agreement has been duly executed
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and delivered by MFC, and this Agreement constitutes legal, valid
and binding obligations of MFC, enforceable in accordance with
its terms; and
(d) No Litigation. There are no actions, suits or proceedings pending or,
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to the knowledge of MFC, after due enquiry, threatened against or
affecting MFC which could adversely affect its obligations
hereunder.
SECTION 7.3 REPRESENTATIONS AND WARRANTIES OF XXXX AND DI FRAIA. Xxxx
and di Fraia hereby severally represent and warrant (as to themselves only) to
MFC, as at the date hereof and the Closing Date, that: (i) this Agreement and,
on the Closing Date, the Xxxx Amendment,the di Fraia Amendment and the Mutual
Release, have been duly executed and delivered by each of Xxxx and di Fraia; and
(ii) this Agreement, the Xxxx Amendment, the di Fraia Amendment and the Mutual
Release constitute legal, valid and binding obligations of each of Xxxx and di
Fraia, enforceable in accordance with their terms.
ARTICLE 8
CONDITIONS OF CLOSING
SECTION 8.1 CONDITIONS OF CLOSING IN FAVOUR OF MFC. The completion of
each of the transactions contemplated hereby is subject to the terms and
conditions set forth below which are for the exclusive benefit of MFC, to be
fulfilled or performed at or prior to the Time of Closing. Any such condition
may be waived in whole or in part by MFC in writing without prejudice to any
claims it may have for breach of covenant, representation or warranty:
(a) Compliance. Cybernet, Xxxx and di Fraia shall be in compliance in all
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respects with all of their respective obligations under this
Agreement, including the delivery of all documents required to be
delivered by each of them;
(b) Representations and Warranties. The representations and warranties of
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Cybernet, Xxxx and di Fraia contained in this Agreement shall be
true and correct in all material respects at the Time of
Closing; and
(c) Covenants. All of the terms, covenants and conditions of this Agreement
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to be complied with or performed by Cybernet, Xxxx and di Fraia at or
before the Time of Closing shall have been complied with or
performed.
SECTION 8.2 CONDITIONS OF CLOSING IN FAVOUR OF CYBERNET. The
completion of each of the transactions contemplated hereby is subject to the
terms and conditions set forth below which are for the exclusive benefit of
Cybernet, to be fulfilled or performed at or prior to the Time of Closing. Any
such condition may be waived in whole or in part by Cybernet in writing without
prejudice to any claims they may have for breach of covenant, representation or
warranty:
(a) Compliance. MFC shall be in compliance in all material respects with
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all its obligations under this Agreement, including the delivery
of all documents required to be delivered by MFC on or prior to
the Closing Date;
(b) Representations and Warranties. The representations and warranties of
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MFC contained in this Agreement shall be true and correct in all
Material respects at the time of Closing; and
(c) Covenants. All of the terms, covenants and conditions of this Agreement
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to be complied with or performed by MFC at or before the Time of
Closing shall have been complied with or performed.
ARTICLE 9
CLOSING ARRANGEMENTS
SECTION 9.1 The Closing shall occur at Xxxxxx-Xxxxxx-Xxxx 00-00 Xxxxxx,
Xxxxxxx on the Closing Date.
SECTION 9.2 On the Closing Date and prior to the time of the Shareholder
Meeting, Cybernet shall: (i) by way of a unanimous resolution of a quorum of
the Board, duly and validly appoint Xxxxxxx Xxxxx and Xxxxxx Xxxxxxxx to the
Board; (ii) appoint Xxxxxxx Xxxxx the Chairman of the Board; and (iii) appoint
Xxxxxxx Xxxxx as the chairman of the Shareholder Meeting.
SECTION 9.3 At the Time of Closing, Cybernet shall deliver to MFC the
following:
(a) the Mutual Release;
(b) the Indemnity Agreement;
(c) the Resignations;
(d) the Loan Agreement and all related documents provided for or
contemplated thereby required to be executed, delivered and/or
provided by Cybernet, its subsidiaries and advisors;
(e) the Xxxx Amendment signed by Cybernet and its subsidiaries;
(f) the di Fraia Amendment signed by Cybernet and its subsidiaries;
(g) a certified copy of the Board Resolutions;
(h) the Extension; and
(i) the Escrow Agreement.
SECTION 9.4 At the Time of Closing, MFC will deliver to
Cybernet the following:
(a) the Shareholder Release;
(b) the Loan Agreement and all documents and instruments contemplated
thereby required to be executed or delivered by MFC and/or the
lender thereunder; and
(c) the Escrow Agreement and funding of all amounts contemplated therein.
SECTION 9.5 At the Time of Closing, Xxxx will deliver to MFC and
Cybernet the Xxxx Amendment and di Fraia will deliver to MFC and Cybernet the di
Fraia Amendment and both Xxxx and di Fraia will deliver the Mutual Release. If
Cybernet should go bankrupt within 90 days of the Closing Date, and if a court
of law should make a final order forcing Xxxx and/or di Fraia to return part or
all of his payment received on the Closing Date to Cybernet, Cybernet's
creditors or similar, then MFC will pay to Xxxx and/or di Fraia an amount equal
to the net amount actually repaid by Xxxx and/or di Fraia, as the case may be,
in any case not to exceed the actual amount paid by Cybernet to Xxxx and di
Fraia on the Closing Date.
SECTION 9.6 The Closing shall not occur, nor shall the documents tabled
for delivery at the Closing be delivered, until all conditions of the Closing
have been fulfilled or waived and all matters have been completed to permit
contemporaneous closing of the transactions as provided for herein.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of Delaware and shall be treated in all
respects as a Delaware contract without giving effect to applicable principles
of conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 10.2 CONSENT TO JURISDICTION. The parties hereto hereby
irrevocably submit to the non-exclusive jurisdiction of the courts of Delaware,
in any action or proceeding arising out of or relating to this Agreement and
hereby irrevocably agree that all claims in respect of any such action or
proceeding may be heard and determined in such court. The parties agree that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
SECTION 10.3 SUCCESSORS AND ASSIGNS. This Agreement shall become
effective when it is executed by the parties and thereafter shall be binding
upon and enure to the benefit of the parties hereto and their successors and
permitted assigns. Neither party shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the other,
which consent may be arbitrarily withheld.
SECTION 10.4 PRIOR UNDERSTANDINGS. This Agreement supersedes all prior
understandings and agreements, whether written or oral, and constitutes the
entire agreement between the parties hereto relating to the transactions
provided for herein.
SECTION 10.5 TIME OF THE ESSENCE. Time shall be the essence hereof.
SECTION 10.6 CONFIDENTIALITY. No party to this Agreement shall
disclose any of its terms, conditions or its existence to any third party,
except as may be required by law or the rules, policies or regulations of any
securities regulatory authority or stock exchange having jurisdiction, without
the prior written consent of the other parties hereto.
SECTION 10.7 NO ADMISSION OF LIABILITY. The parties hereto have
executed and delivered this Agreement without any admission of liability on the
part of or on behalf of any party to this Agreement.
SECTION 10.8 BENEFIT. Each of the parties hereto hereby acknowledges,
covenants and agrees that this Agreement is being entered into for the benefit
of each such party and each of the parties hereto acknowledges that each has an
interest in the settlement and transactions contemplated hereby being completed
in accordance with the terms of this Agreement.
SECTION 10.9 ENUREMENT. This Agreement shall be binding upon and shall
enure to the benefit of the parties hereto and their respective administrators,
trustees, receivers, successors and permitted assigns.
SECTION 10.10 FURTHER ASSURANCES. Each party agrees that it will
execute all documents and do all acts and things as the other party may
reasonably request and as may be lawful and within its respective power to do,
to carry out and/or implement the provisions or intent of this Agreement.
SECTION 10.11 COUNTERPARTS AND FACSIMILE. This Agreement may be
executed in counterparts and by facsimile and by different parties in separate
counterparts, each of which when so executed shall be deemed an original and all
of which, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the day
and year first above written.
MFC BANCORP LTD.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name:
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Title:
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CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
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Title: CEO
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SIGNED, SEALED and DELIVERED by )
XXXXXXX XXXX in the presence of: )
)
/s/ Xxxxxx Xxxxxx )
------------------------------------ )
Signature )
)
) /s/ Xxxxxxx Xxxx
------------------------------------ ) --------------------
Name ) XXXXXXX XXXX
)
------------------------------------ )
Address )
------------------------------------ )
)
------------------------------------ )
Occupation )
SIGNED, SEALED and DELIVERED by )
PAOLO DI FRAIA in the presence of: )
)
/s/ Xxxxxx Xxxxxx )
------------------------------------ )
Signature )
) /s/ Paolo di Fraia
------------------------------------ ) -----------------------
Name ) PAOLO DI FRAIA
)
------------------------------------ )
Address )
)
------------------------------------ )
)
------------------------------------ )
Occupation )
SCHEDULE A
MUTUAL RELEASE
MUTUAL RELEASE
This Mutual Release is entered into this 12th day of March 2002, by and
among Cybernet Internet Services International, Inc. ("Cybernet"); Xxxxxx Xxxx
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("Xxxx"); Ventegis Capital AG ("Ventegis") and, MFC Bancorp Ltd. ("MFC" and
---- -------- ---
together with Xxxx and Ventegis the "Shareholders Group"); and Xxxxxxx Xxxx
-- ------------------
("Xxxx"), Xxxxxx Xxxxxx ("Xxxxxx"), Xxxxxx Xxxxxxxxxxxxx, ("Xxxxxxxxxxxxx"),
---- ------ -------------
G.W. Xxxxxx Xxxxxxx ("Wareham") and Paolo di Fraia ("di Fraia" and together with
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Eder, Besner, Xxxxxxxxxxxxx, and Wareham the "Management Group").
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WHEREAS, Xxxx and Ventegis own approximately 25.9% of the issued and
outstanding voting stock of Cybernet (the "Shares"); and
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WHEREAS, MFC has voting control of all the Shares; and
WHEREAS, Cybernet and the Shareholders Group have distributed to Cybernet
shareholders opposing proxy materials in connection with Cybernet's annual
meeting to be held on March 12, 2002; and
WHEREAS, Cybernet, the Shareholders Group and the Management Group have
agreed to enter into a Settlement Agreement dated even date hereof ("Settlement
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Agreement"); and
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WHEREAS, as inducement to the parties to enter into the Settlement
Agreement, the parties desire to enter into this Mutual Release.
NOW THEREFORE, in consideration of the mutual promises contained herein and
in the Settlement Agreement, the sufficiency of which is hereby acknowledged,
the parties agree as follows:
1. Release by Cybernet. Cybernet for itself, corporations and other
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entities it controls, and its affiliates, subsidiaries, successors, assigns,
officers, directors, employees, representatives, agents, heirs and attorneys
hereby releases and discharges the Management Group and all of their, assigns,
personal representatives, heirs, agents and attorneys from and against any
claims, in any forum, contingent or fixed, xxxxxx or inchoate, liquidated or
unliquidated, direct or derivative, known or unknown, arising in law or equity,
present or future, related to or arising out of the service by the Management
Group or any of its members as officers, directors, employees, representatives
or agents of Cybernet.
2. Release by the Shareholders Group. The Shareholders Group for
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themselves, corporations and other entities they control, and their affiliates,
parents, subsidiaries, successors, assigns, officers, directors, employees,
representatives, agents, heirs and attorneys hereby release and discharge the
Management Group and all of their, assigns, personal representatives, heirs,
agents and attorneys from and against any claims, in any forum, contingent or
fixed, xxxxxx or inchoate, liquidated or unliquidated, direct or derivative,
known or unknown, arising in law or equity, present or future, related to or
arising out of the service by the Management Group or any of its members as
officers, directors, employees, representatives or agents of Cybernet.
3. Release by Cybernet and the Management Group. Cybernet and the
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Management Group for themselves, corporations and other entities they control,
and their affiliates, parents, subsidiaries, successors, assigns, officers,
directors, employees, representatives, agents, heirs and attorneys hereby
release and discharge the Shareholders Group, corporations and other entities
they control, and their affiliates, parents, subsidiaries, successors, assigns,
officers, directors, employees, representatives, personal representatives,
heirs, agents and attorneys from and against any claims, in any forum,
contingent or fixed, xxxxxx or inchoate, liquidated or unliquidated, direct or
derivative, known or unknown, arising in law or equity, present or future,
related to or arising out of the acquisition, holding or voting of the Shares,
or assumption of control of the Board of Directors of Cybernet or any matter
relating to the Shareholders Group's conduct or activities involving Cybernet up
to the date hereof.
4. Successors and Assigns. All agreements, covenants, conditions and
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provision of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto.
5. Counterparts. This agreement may be executed in counterparts, and
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by facsimile, each of which will be deemed an original and which together shall
constitute one instrument.
6. Governing Law. This agreement shall be governed by and construed in
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accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Mutual Release as of the date first above written.
CYBERNET INTERNET SERVICES
INTERNATIONAL, INC.
WITNESS:
--------------------- By: --------------------------------
Name: Name: Xxxxxxx Xxxx
Title: President and Chief
Executive Officer
THE SHAREHOLDERS GROUP:
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WITNESS:
--------------------- -------------------------------------
Name: Xxxxxx Xxxx
VENTEGIS CAPITAL AG
WITNESS:
--------------------- By: --------------------------------
Name: Name:
Title:
MFC BANCORP LTD.
WITNESS:
--------------------- By: --------------------------------
Name: Name:
Title:
[SIGNATURE PAGE CONTINUES ON NEXT PAGE]
THE MANAGEMENT GROUP:
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WITNESS:
--------------------- -------------------------------------
Name: Xxxxxxx Xxxx
WITNESS:
--------------------- -------------------------------------
Name: Xxxxxx Xxxxxx
WITNESS:
--------------------- -------------------------------------
Name: Xxxxxx Xxxxxxxxxxxxx
WITNESS:
--------------------- -------------------------------------
Name: G.W. Xxxxxx Xxxxxxx
WITNESS:
--------------------- -------------------------------------
Name: Paolo di Fraia
SCHEDULE B
INDEMNITY AGREEMENT
INDEMNITY AGREEMENT
This Indemnity Agreement is entered into this 12th day of March 2002, by
and among Cybernet Internet Services International, Inc. ("Cybernet"); Andreas
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Xxxx ("Xxxx"), Xxxxxx Xxxxxx ("Xxxxxx"), Xxxxxx Xxxxxxxxxxxxx, ("Xxxxxxxxxxxxx")
---- ------ -------------
G.W. Xxxxxx Xxxxxxx ("Wareham") and Paolo di Fraia ("di Fraia" and together with
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Eder, Besner, Xxxxxxxxxxxxx, and Wareham the "Indemnitees").
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NOW THEREFORE, in consideration of the mutual promises contained herein,
the sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Indemnification. Cybernet agrees to indemnify and hold Indemnitees
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harmless against all claims, losses, liabilities, damages, deficiencies, costs
and expenses, including reasonable attorneys fees and expenses of investigation
and defense relating to any claims, losses, liabilities, damages, deficiencies,
costs or expenses (hereinafter individually a "Loss" and collectively "Losses")
---- ------
incurred or suffered by Indemnitees, or any of them, directly or indirectly,
related to or arising out of each Indemnitee's service as officer, director,
employee, representative or agent of Cybernet, provided that the Loss has not
resulted from the wilful misconduct, bad faith or gross negligence of the
Indemnitee.
2. Procedures for Indemnification. Indemnitees shall make any claims for
--------------------------------
indemnification pursuant to Section 1 hereof by delivering a notice (the
"Indemnification Claim") to Cybernet. The Indemnification Claim shall (A) state
---------------
that the party claiming indemnification has paid or incurred Losses; and (B)
specify the amounts of Losses, the date each such item was paid or incurred.
(a) If the Indemnification Claim involves a Third Party Claim, the
procedures set forth in Section 3 hereof shall be observed by Indemnitee and
Cybernet.
(b) If the Indemnification Claim involves a matter other than a
Third Party Claim, Cybernet will have 30 business days to object to such
Indemnification Claim by delivery of a written notice of such objection to
Indemnitee specifying in reasonable detail the basis for such objection.
Failure of Cybernet to timely object will constitute acceptance of the
Indemnification Claim by Cybernet and the Indemnification Claim will be paid in
accordance with Section 3(c). If an objection is timely interposed by Cybernet
and the dispute is not resolved within 30 business days from the date Indemnitee
receives such objection, such dispute may be resolved by arbitration in
accordance with the rules and procedures of the American Arbitration
Association.
(c) Upon a final determination of the amount of an Indemnification
Claim, whether by agreement between Cybernet and Indemnitee or by an arbitration
award, Cybernet will pay the amount of such finally determined Indemnification
Claim within 10 days of the date such amount is determined.
3. Third Party Claim. Should any claim be made, or suit or proceeding
------------------
(including, without limitation, a binding arbitration or an audit by any taxing
authority) be instituted by a third
party against an Indemnitee which, if
prosecuted successfully, would be a matter for which the Indemnitee is entitled
to indemnification under Section 1 hereof (a "Third Party Claim"), the
-------------------
obligations and liabilities of the parties hereunder with respect to such Third
Party Claim will be subject to the following terms and conditions:
(a) Indemnitee shall give Cybernet written notice of any such
Third Party Claim promptly after receipt by Indemnitee of actual notice thereof,
and Cybernet will undertake the defense thereof by representatives of its own
choosing. If Cybernet undertakes the defense of such claim, Cybernet will have
the exclusive right to defend, contest and litigate the Third Party Claim, and
the exclusive right, subject to the terms of Section 3(b) below, in its
discretion, in good faith, and upon the advice of counsel, to settle any such
matter, either before or after the initiation of litigation, at such time and
upon such terms as Cybernet can and will satisfy and as it deems fair and
reasonable; provided that at least 10 days prior written notice of the intended
settlement must be provided to Indemnitee. If, however, Cybernet fails or
refuses to undertake the defense of such claim within 30 business days after
written notice of such claim has been given to Cybernet by Indemnitee,
Indemnitee will have the right to undertake the defense, compromise and,
settlement of such claim with counsel of its own choosing.
(b) Indemnitee and Cybernet will cooperate with each other in all
reasonable respects in connection with the defense of any Third Party Claim,
including making available records relating to such claim as may be reasonably
necessary for the preparation of the defense of any such claim or for testimony
as witness in any proceeding relating to such claim.
(c) In connection with any settlement of a Third Party Claim
negotiated by Cybernet, Indemnitee will not be required to take any of the
following actions:
(i) Enter into any settlement that does not include the
delivery by the claimant or plaintiff to Indemnitee of an
unconditional release from all liability with respect to
the Third Party Claim.
(ii) Enter into any settlement that requires Indemnitee
to take any affirmative action as a condition of the
settlement.
(iii) Consent to the entry of judgment that does not
include a full dismissal of the litigation or proceedings
against Indemnitee with prejudice.
4. Directors and Officers Insurance. Cybernet hereby agrees to
-----------------------------------
maintain its current directors and officers liability policy until the policy
expiration date on or about December 1, 2002 ("Current Insurance"). In
------------------
addition, in the event that Board nominees of MFC Bancorp Ltd. and Ventegis
Capital AG are approved and nominated with more than two-thirds approval of
Cybernet's Board of Directors as of the date hereof and are elected to a
majority of the seats of Cybernet's Board of Directors at Cybernet's
shareholders meeting to be held on March 12, 2002 ("Meeting"),
Cybernet hereby agrees to maintain directors and officers insurance with
Coverage of Indemnitees substantially similar to its current directors &
Officers liability policy until March 12, 2003 ("Additional Insurance").
---------------------
Cybernet shall pay and be solely responsible for all retention or
deductible amounts applicable to any claims arising under the Current
Insurance and Additional Insurance. Cybernet hereby agrees to place in
escrow an amount equal to 50% of all retention or deductible amounts up
to a maximum of Euro 125,000 in accordance with that certain Escrow
Agreement dated even date hereof. Cybernet hereby agrees to indemnify and
hold Indemnitees harmless for all such retention or deductible
amounts.
5. Successors and Assigns. All agreements, covenants, conditions and
------------------------
provision of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto.
6. Counterparts. This agreement may be executed in counterparts, and
------------
by facsimile, each of which will be deemed an original and which together shall
constitute one instrument.
7. Governing Law. This agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, Cybernet has executed and delivered this Agreement for
the benefit of Indemnitees as of the date first above written.
INDEMNITOR:
----------
CYBERNET INTERNET SERVICES
INTERNATIONAL, INC.
WITNESS:
------------------- By: ----------------------------
Name: Name: Xxxxxxx Xxxx
Title: President and Chief Executive Officer
[SIGNATURE PAGE CONTINUES ON NEXT PAGE]
INDEMNITIES:
-----------
WITNESS:
----------------------- --------------------------------
Name: Xxxxxxx Xxxx
WITNESS:
----------------------- --------------------------------
Name: Xxxxxx Xxxxxx
WITNESS:
----------------------- --------------------------------
Name: Xxxxxx Xxxxxxxxxxxxx
WITNESS:
----------------------- --------------------------------
Name: G.W. Xxxxxx Xxxxxxx
WITNESS:
----------------------- --------------------------------
Name: Paolo di Fraia
SCHEDULE C
LOAN AGREEMENT
THIS CREDIT FACILITY AGREEMENT dated for reference the 12th day of March, 2002,
AMONG:
MFC MERCHANT BANK S.A., a bank organized under the laws of
Switzerland
AND:
CYBERNET INTERNET SERVICES INTERNATIONAL, INC., a corporation
organized under the laws of the State of Delaware in the United
States, having an address at Xxxxxx-Xxxxxx-Xxxx 00-00, 00000 Xxxxxx,
Xxxxxxx
AND:
636892 B.C. LTD., a corporation organized under the laws of the
Province of British Columbia, having a registered office at Suite
1000, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
WHEREAS:
A. The Borrower has requested that the Credit Facility be made available by
the Lender to the Borrower; and
B. The Lender has agreed to make the Credit Facility available to the
Borrower upon the terms and conditions set out herein.
NOW THEREFORE THIS CREDIT FACILITY AGREEMENT WITNESSES THAT in consideration of
the premises, mutual covenants and agreements hereinafter set forth, and for
other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the parties hereto acknowledge, declare, covenant and
agree as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS. When used in this Agreement (including the
recitals and schedules hereto) or in any amendment hereto, the following terms
shall, unless otherwise expressly provided, have the following meanings,
respectively:
"ADVANCES" means advances made by the Lender hereunder to the Borrower under the
First Tranche, the Second Tranche and the Third Tranche and "ADVANCE" means any
one of such advances;
"AFFILIATE" means, with respect to any given Person, any other Person directly
or indirectly Controlling, Controlled by or under common Control with, such
Person;
"AGREEMENT" means this non-revolving term credit agreement as supplemented,
amended or otherwise modified, amended, extended, renewed or replaced from time
to time by any agreement supplemental or ancillary hereto; and the expressions
"ARTICLE" and "SECTION" followed by a number mean, and refer to the specified
Article or Section of this Agreement;
"ARRANGEMENT FEE" means an arrangement fee equal to euro 150,000 payable by the
Borrower to the Lender;
"AUTHORIZATION" means any permit, licence, approval, consent, order, right,
certificate, judgment, writ, injunction, award, determination, direction,
decree, authorization, franchise, privilege, grant, waiver, exemption and other
concession or by-law, rule or regulation of, by or from any Official Body, all
as amended, supplemented, modified, replaced or renewed from time to time;
"BANKING DAY" means any day on which the Lender is open for business in Geneva,
Switzerland;
"BNS" means B&N Software AG, a corporation organized under the laws of Germany;
"BORROWER" means Cybernet Internet Services International, Inc., a corporation
organized under the laws of the State of Delaware and its successors and
permitted assigns;
"BORROWER'S CERTIFICATE" means a certificate of a senior officer of the Borrower
substantially in the form set out in Schedule B hereto or such other form as may
be requested from time to time by the Lender;
"BORROWING" means a borrowing consisting of one or more Advances;
"BORROWING NOTICE" means a notice of a request for an Advance in substantially
the form set out in Schedule A hereto;
"BUSINESS" means the business of the Borrower and/or the Cybernet Companies, as
the context may require;
"CHARTER DOCUMENTS" means, in respect of any Person and as the context requires,
the incorporation documents and by-laws, and all amendments thereto, of such
Person;
"CID" means Cybernet Internet Dienstleistungen AG, a corporation organized under
the laws of Germany;
"CLOSING" means the closing of the transactions contemplated by this Agreement
on the Closing Date;
"CLOSING DATE" means the Banking Day following satisfaction by the Borrower or
waiver by the Lender of all conditions to an Advance set out in the Credit
Documents or such other date as may be agreed upon by the parties;
"COMMITMENT" means the commitment of the Lender in respect of the Credit
Facility in the aggregate principal amount set out in Section 2.1 and as
adjusted from time to time in accordance herewith;
"CONSENT" means any permit, license, approval, consent, order, right,
certificate, judgment, writ, injunction, award, determination, direction,
decree, authorization, franchise, privilege, grant, waiver, exemption and other
concession or by-law, rule or regulation of, by or from any Person other than an
Official Body;
"CONTROL" over a Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or other equity
interest, representation on its board of directors or body performing similar
functions, by contract or otherwise. The terms "CONTROLLING" and "CONTROLLED"
will have corollary meanings;
"CORPORATION" means a body corporate, corporation, company, partnership,
business trust or joint venture;
"CREDIT DOCUMENTS" means this Agreement, the Security Documents and the
Information Documents and all other documents to be executed and delivered to
the Lender by the Borrower hereunder or thereunder;
"CREDIT FACILITY" means the revolving credit facility in the aggregate principal
amount of up to euro 7,000,000 to be made available by the Lender hereunder to
the Borrower under the First Tranche, Second Tranche and Third Tranche;
"CYBERNET COMPANIES" means, collectively, CID, Vianet, Novento, Schweiz, Italia,
Multicall, BNS and Sagl, and all other companies directly or indirectly owned or
controlled by the Borrower and "CYBERNET COMPANY" means any one such company;
"DEBT" of any Person means: (i) all indebtedness of such Person for and in
respect of borrowed money, including obligations with respect to bankers'
acceptances, letters of credit and letters of guarantee; (ii) all indebtedness
of such Person for the deferred purchase price of property or services
represented by a note or other evidence of indebtedness or other security; (iii)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights or remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property); (iv)
all obligations under leases which, in accordance with GAAP (or accounting
principles generally accepted in the jurisdiction of incorporation or
organization of such Person), are recorded as capital leases in respect of which
such Person is liable as lessee; (v) the aggregate amount at which any shares in
the capital of such Person which are redeemable or retractable at the option of
the holder thereof may be retracted or redeemed; and (vi) all Debt Guaranteed by
such Person;
"DEBT GUARANTEED" by any Person means the maximum amount which may be
outstanding at any time of all Debt of the kinds referred to in (i) through (v)
of the definition of Debt which is directly or indirectly guaranteed by such
Person or which such Person agreed (contingently or otherwise) to purchase or
otherwise acquire, or in respect of which such Person has otherwise assured a
creditor against loss by means of an indemnity, security or bond;
"DEFAULT" means an event which, with the giving of notice or passage of time or
both, would constitute an Event of Default;
"DISTRIBUTION" means all cash distributions (including, without limitation, any
dividends or amounts payable by way of share repurchase) properly paid to or
received by any Person in respect of such Person's having provided capital
directly or indirectly to the Borrower and/or the Cybernet Companies;
"EURO" or "EUROS" means lawful money of the European Union;
"EVENT OF BANKRUPTCY" means, in respect of any Person, that such Person shall
generally not pay its Debts as such Debts become due, or shall admit in writing
its inability to pay its Debts generally as they become due, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any such Person seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding-up, a reorganization, arrangement,
adjustment, protection, relief or a composition of it or its Debts under any Law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or for the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against such
Person (but not instituted by such Person), either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for relief
against such Person or for the appointment of a receiver, trustee, custodian or
other similar official for such Person or for any substantial part of its
property) shall occur; or such Person shall take any action to authorize any of
the actions set forth above;
"EVENT OF DEFAULT" has the meaning ascribed to it in Section 9.1;
"FINANCIAL QUARTER" means a period of three consecutive months in each Financial
Year ending on either March 31, June 30, September 30 or December 31;
"FINANCIAL STATEMENTS" means, in respect of the Borrower, as at any particular
time, except as otherwise stated hereunder, financial statements prepared in
accordance with or reconciled to GAAP, including, without limitation,
consolidated and unconsolidated balance sheets, statements of earning and
statements of changes in financial position;
"FINANCIAL YEAR" means a financial year commencing on January 1 of each calendar
year and ending on December 31 of such calendar year;
"FIRST TRANCHE" means the tranche of the Credit Facility in the principal amount
of euro 949,000 to be made available by the Lender hereunder to the Borrower and
to be used for the sole purpose of:
(i) paying Xx. Xxxxxxx Xxxx euro 115,000 representing a termination payment
owed by the Borrower to Xx. Xxxx pursuant to a termination agreement
dated March 12, 2002 and an additional euro 115,000 to be held in a
separate escrow account by the Borrower;
(ii) paying Dr. Paolo di Fraia euro 82,000 representing a termination
payment owed by the Borrower to Dr. di Fraia pursuant to a termination
agreement dated March 12, 2002 and an additional euro 82,000 to
be held in a separate escrow account by the Borrower;
(iii) paying the premium for the extension of the Borrower's current
directors and officers liability policy until March 12, 2003 up to a
maximum of euro 210,000;
(iv) paying the deductible on a claim covered by directors and officers
insurance up to a maximum amount of euro 125,000 which shall be
held in a separate escrow account by the Borrower;
(v) paying the Arrangement Fee to the Lender; and
(vi) reimbursing the Lender euro 70,000 for certain expenses pursuant to
Section 11.4 of this Agreement.
"GAAP" means, at any time, accounting principles generally accepted in the
United States, applied on a consistent basis;
"GENERAL SECURITY AGREEMENT" means the general security agreement in a form
satisfactory to the Lender, pursuant to which the assets of the Borrower will be
pledged as security in favour of the Security Agent;
"GERMAN SUBSIDIARIES" means BNS, CID, Novento and Multicall;
"INFORMATION DOCUMENTS" means, collectively, at any time and in any form,
information provided by the Borrower or on behalf of the Borrower to the Lender
in writing in respect of the Business and the Security, including, without
limitation, all certificates, the Financial Statements of the Borrower, and all
materials reasonably requested by the Lender for the purpose, inter alia, of
providing such information to prospective assignees, all as from time to time
amended, supplemented or replaced;
"INTEREST" means the interest accrued on Advances outstanding from time to time
at the Interest Rate compounded monthly not in advance, and payable, in arrears,
on the Interest Payment Date;
"INTEREST PAYMENT DATE" means the earlier of: (i) the Maturity Date; and (ii)
the date upon which a declaration is made pursuant to Section 9.1, provided that
if the Maturity Date is extended,
subsequent Interest Payment Dates shall occur on the earlier of each
anniversary of March 12, 2003 or the date that a declaration is made
pursuant to Section 9.1 ;
"INTEREST RATE" means, a rate of interest equal to 14% per annum calculated
semi-annually, not in advance;
"ITALIA" means Cybernet Italia S.p.A., a corporation organized under the laws of
Italy;
"JUDGMENT CURRENCY" means the currency in which a court of competent
jurisdiction may render judgment in connection with any litigation relating to
the repayment of the Outstanding Amount under this Agreement;
"LAW" means any law (including common law and equity), constitution, statute,
order, treaty, regulation, rule, ordinance, order, injunction, writ, judgment,
determination, decree or award of any Official Body;
"LENDER" means MFC Merchant Bank S.A., a bank organized under the laws of
Switzerland, and its successors and assigns;
"LIEN" means any mortgage, pledge, lien, hypothecation, security interest or
other encumbrance or charge (whether fixed, floating or otherwise) or title
retention, any right of set-off (arising otherwise than by operation of Law) and
any deposit of monies under any agreement or arrangement whereby such monies may
be withdrawn only upon the fulfillment of any condition as to the discharge of
any other indebtedness or other obligation to any creditor, or any right of or
arrangement of any kind with any creditor to have its claim satisfied prior to
other creditors with or from the proceeds of any properties, assets or revenues
of any kind now owned or later acquired;
"MATERIAL ADVERSE EFFECT" means: (i) a material adverse effect on the property
or assets of the Business, the Borrower or any of the Cybernet Companies taken
as a whole; (ii) a material adverse effect on the capital structure or condition
or prospects, financial or otherwise, of the Business, the Borrower or any of
the Cybernet Companies taken as a whole; (iii) a material adverse effect on the
ability of the Borrower to perform and comply with this Agreement or to pay or
perform any of the Obligations; (iv) a material adverse effect on the priority,
effectiveness or enforceability of the Security; or (v) a material adverse
effect on the condition or prospects, financial or otherwise, of the Borrower or
any of the Cybernet Companies;
"MATURITY DATE" means the earlier of: (i) March 12, 2003, provided that the
Lender may, at its sole option, extend such date for additional periods of 12
months per each extension, by providing the Borrower with written notice
thereof, at least 30 days prior to such date, or such date as extended, as the
case may be; and (ii) the date upon which a declaration is made pursuant to
Section 9.1;
"MULTICALL" means Multicall Telefonmarketing AG, a corporation organized under
the laws of Germany;
"NOTE" means a promissory note or promissory notes to be delivered by the
Borrower to the Lender, in substantially the form set out in Schedule D hereto,
to evidence the indebtedness of the Borrower
to the Lender under each Advance, and all replacement notes issued by the
Borrower to the Lender in respect thereof from time to time;
"NOVENTO" means Novento Telecom AG, a corporation organized under the laws of
Germany;
"OBLIGATIONS" means all obligations, liabilities and indebtedness of the
Borrower to the Lender howsoever incurred, including, without limitation, with
respect to the principal and Interest on Advances, and the payment or
performance of all other obligations, liabilities and indebtedness of the
Borrower to the Lender hereunder or arising under and pursuant to any one or
more of the Credit Documents or with respect to the Advances and all fees,
costs, expenses and indemnity obligations hereunder or thereunder;
"OFFICIAL BODY" means any government or political subdivision or any agency
(including, without limitation, any licensing or regulatory agency), body,
office, authority, bureau, central bank, monetary authority, commission,
department or instrumentality thereof, or any court, board, tribunal, grand jury
or arbitrator, commission or instrumentality thereof, whether foreign or
domestic and, when used in the context of a particular Person, having
jurisdiction over such Person;
"ORIGINAL CURRENCY" means euros;
"OUTSTANDING AMOUNT" means, in respect of the Credit Facility, on any day, an
amount calculated and expressed in euros equal to the aggregate principal amount
of all Advances made by the Lender under the Credit Facility, less any repayment
or prepayment made or credited to the Borrower as at such date;
"PERSON" means an individual, a partnership, a corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture or
other entity, or a foreign state or a political subdivision thereof or any
agency of such state or subdivision;
"PLEDGED SECURITIES" means the securities described and listed in Schedule C and
any and all other securities that may be pledged by the Borrower to the Lender
from time to time, and all accretions, replacements and substitutions thereto
and therefor;
"RELATED PARTY" means, in respect of any Person, any Person with whom such
Person does not deal at arm's-length, including any Affiliate thereof;
"SAGL" means Cybernet Sagl (GmbH) Lugano, a corporation organized under the laws
of Switzerland;
"SCHWEIZ" means Cybernet Schweiz AG, a corporation organized under the laws of
Switzerland;
"SECOND TRANCHE" means the tranche of the Credit Facility in the principal
amount of up to euro 1,500,000 to be made available by the Lender hereunder to
the Borrower and to be used for the purpose of financing working capital and
general corporate requirements of the Borrower;
"SECURITIES PLEDGE AGREEMENT" means the pledge agreement(s) in a form
satisfactory to the Lender, pursuant to which the Pledged Securities shall be
pledged by the Borrower to the Lender in favour of the Security Agent;
"SECURITY" means the security given to the Lender, at any time and from time to
time, to secure the Obligations, including, without limitation, the security
referred to in Section 5.1;
"SECURITY AGENT" means 636892 B.C. Ltd., a corporation organized under the laws
of the Province of British Columbia, and its successors and assigns;
"SECURITY DOCUMENTS" means, collectively, the documents referred to in Section
5.1 and the agreements, instruments and documents delivered from time to time to
the Lender, by the Borrower, CID or any other Person, for the purpose of
establishing, perfecting, preserving and protecting the Security, and "SECURITY
DOCUMENT" means any one of them as the context prescribes or requires;
"SUBSIDIARY" means, at any time, as to any Person, any corporation, partnership
or other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at such time directly or indirectly owned by
such a Person;
"TAXES" means any and all present or future taxes (including, without
limitation, all stamp, documentary, excise or property taxes), levies, imposts,
deductions, charges or withholdings and liabilities with respect thereto;
"THIRD TRANCHE" means the tranche of the Credit Facility in the principal amount
of euro 4,551,000 to be made available by the Lender hereunder to the Borrower
and to be used for the sole purpose of restructuring its current indebtedness
and, in conjunction therewith, working capital requirements; and
"VIANET" means Vianet Telekommunikations AG, a corporation organized under the
laws of Austria.
SECTION 1.2 HEADINGS, ETC. The division of this Agreement into
Articles and Sections and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
SECTION 1.3 GENDER AND NUMBER. Words imparting the singular number
include the plural and vice-versa and words imparting gender include the
masculine, feminine and gender neutral as the context requires.
SECTION 1.4 AMENDMENT. No amendment of any provision of this Agreement
and/or a Security Document shall be effective unless the same is in writing and
signed by each party thereto which is then a party to or, to whom a security
interest has been granted pursuant to, the respective document being amended.
SECTION 1.5 SEVERABILITY. If one or more provisions contained in this
Agreement and/or a Security Document shall be invalid, illegal or unenforceable
in any respect under any applicable law, the validity, legality and
enforceability of the remaining provisions hereof and/or thereof shall not be
affected or impaired thereby.
SECTION 1.6 ACCOUNTING TERMS. Except as the context may otherwise
require, all accounting terms not specifically defined herein shall be construed
in accordance with GAAP.
SECTION 1.7 SCHEDULES. All documents attached or referred to in this
Agreement and the following schedules attached hereto are integral to and form
part of this Agreement:
Schedule "A" - Form of Borrowing Notice
Schedule "B" - Form of Borrower's Certificate
Schedule "C" - List of Pledged Securities
Schedule "D" - Form of Note
Schedule "E" - Schedule 7.1(h)
Schedule "F" - Schedule 7.1(n)
ARTICLE 2
THE CREDIT FACILITY
SECTION 2.1 THE CREDIT FACILITY. (1) The Lender shall make
available to the Borrower in accordance with, and subject to the terms and
conditions of, this Agreement, until the Maturity Date, a revolving term credit
facility in the aggregate principal amount of up to euro 7,000,000 and made
available to the Borrower under the First Tranche, Second Tranche and Third
Tranche.
(2) The Borrower shall pay or repay to the Lender on the Maturity Date
all amounts owing under the Credit Facility and not previously paid or repaid
hereunder.
(3) The Borrower shall use the Advances in accordance with the specified
purposes set forth under the First Tranche, Second Tranche and Third Tranche.
ARTICLE 3
THE ADVANCES
SECTION 3.1 INTEREST ON THE CREDIT FACILITY. On the terms and
conditions set forth herein, the Lender, from time to time, on any Banking Day,
prior to the Maturity Date, agrees to make Advances to the Borrower.
SECTION 3.2 MAKING ADVANCES. Each Advance shall be made on two Banking
Days' notice. Each such notice of an Advance shall be given by a Borrowing
Notice (or such other form as the Lender may from time to time specify) or by
telephone confirmed promptly in writing with the Borrowing Notice which shall
specify therein: (i) the requested date of such Advance; (ii) the
aggregate amount of such Advance; and (iii) the Outstanding Amount having
given effect to such Advance.
SECTION 3.3 INTEREST ON ADVANCES. The Borrower shall pay to the Lender
Interest on the unpaid principal amount of each Advance made to it from the date
of such Advance in euros, until such principal amount shall be repaid in full at
the Interest Rate. Interest shall accrue from day to day, shall be compounded
monthly in arrears and shall be paid on the earlier of the Maturity Date or the
date on which there is no longer any Outstanding Amount payable to the Lender.
Any amount of principal or Interest on any Advance which is not paid when due
(whether at stated maturity, by acceleration or otherwise) shall bear Interest
(both before and after default and judgment) from the date on which such amount
is due until such amount is paid in full, payable upon demand, at the Interest
Rate.
SECTION 3.4 FEES. Provided the Lender is prepared to make Advances to
the Borrower up to the amount of the Commitment, the Borrower shall pay the
Lender the Arrangement Fee, whether or not any Advances are made under this
Agreement, on the earlier of the date of the Advance of the First Tranche and
March 12, 2002.
SECTION 3.5 INTEREST ON OVERDUE AMOUNTS. Except as otherwise provided
herein, all amounts owed by the Borrower to the Lender which are not paid when
due (whether at stated maturity, on demand, by acceleration or otherwise) shall
bear Interest (both before and after default or judgment), from the date on
which such amount is due until such amount is paid in full, payable on demand,
at a rate per annum equal at all times to the Interest Rate.
ARTICLE 4
REPAYMENT OF PRINCIPAL SUM
SECTION 4.1 PAYMENTS. The Borrower shall pay or repay to the Lender,
on the Maturity Date, all amounts owing hereunder and not previously paid or
repaid, without set-off, counterclaim or deduction.
SECTION 4.2 BORROWER'S RIGHT TO PREPAY THE CREDIT FACILITY. The
Borrower may, on ten Banking Days' prior notice given to the Lender stating the
proposed date and aggregate principal amount of the prepayment, and, if such
notice is given, the Borrower shall, prepay the Outstanding Amount, in whole or
in part, as set out in the prepayment notice, together with accrued Interest to
the date of such prepayment on the amount prepaid. Each prepayment shall be in
a principal amount of not less than euro 500,000.
SECTION 4.3 METHOD AND PLACE OF PAYMENT. All payments to be made
hereunder shall be made by the Borrower to the Lender on the day that such
payment is due at the Lender's address provided for in this Agreement.
SECTION 4.4 TIME OF PAYMENT. Whenever any payment hereunder shall be
stated to be due on a day other than a Banking Day, such payment shall be made
on the next succeeding Banking
Day, and such extension of time shall in such
case be included in the computation of Interest or fees, as the case may be.
ARTICLE 5
SECURITY
SECTION 5.1 SECURITY. As general and continuing security for the
performance of all Obligations of the Borrower under the Credit Documents,
including the prompt payment when due by the Borrower of the all Advances and
Interest and all other monies from time to time owing by the Borrower hereunder,
there shall be deposited with and held by the Lender, in form and substance
satisfactory to the Lender, the following:
(1) a Note representing the amount of each Advance;
(2) the Securities Pledge Agreement;
(3) the General Security Agreement;
(4) notarial deeds necessary to register the Pledged Shares in the name of
the Lender; and
(5) such other agreements, instruments or documents reasonably requested by
the Lender or the Security Agent to register the Pledged Securities in
the name of the Security Agent.
SECTION 5.2 CONTINUED PERFECTION, ADDITIONAL SECURITY AND AGREED
RELEASES OF SECURITY. (1) The Borrower shall take such action and execute
and deliver to the Lender and the Security Agent such agreements, conveyances,
deeds and other documents and instruments as the Lender shall reasonably request
for the purpose of establishing, perfecting, preserving and protecting the
Security, in each case forthwith upon request therefor by the Lender or Security
Agent and in form and substance reasonably satisfactory to the Lender or
Security Agent.
(1) The Borrower agrees that it shall, forthwith upon request by the
Lender, provide a replacement Note or Notes representing such principal amount
or amounts as the Lender may direct, provided that the aggregate principal
amounts represented by the Notes shall, at all times, be equal to the
Outstanding Amount.
SECTION 5.3 RELEASE UPON PAYMENT. Upon payment by the Borrower of all
of the Obligations and performance of all other obligations of the Borrower
under the Credit Documents, the Security Agent shall, at the expense of the
Borrower, execute and deliver such discharges, releases and other documents as
may reasonably be required to release and discharge the Security. Partial
repayment of the Obligations shall not entitle the Borrower to the release or
discharge of the Security, in whole or in part.
SECTION 5.4 CONFLICTS. If a conflict or inconsistency exists between a
provision of this Agreement and the terms of the Security Documents or any one
of them, the terms of this Agreement shall prevail. Notwithstanding the
foregoing, if there is any right or remedy of a Lender set out in the Security
Documents or any part thereof which is not set out or provided for in this
Agreement, such additional right or remedy shall not constitute a conflict or
inconsistency.
ARTICLE 6
CONDITIONS PRECEDENT TO THE ADVANCES
SECTION 6.1 CONDITIONS PRECEDENT TO THE FIRST TRANCHE. The obligation
of the Lender to make the Advance of the First Tranche is subject to the
fulfillment of: (i) the conditions precedent set forth in Section 6.2; and (ii)
the following conditions precedent:
(a) the Lender shall have received copies of the Charter Documents of the
Borrower and each of the Cybernet Companies certified by an
Officer of the Borrower, as the Lender may require, and of the
resolutions of the Borrower's board of directors approving the Credit
Documents to which it is a party and all documents evidencing any
necessary corporate action of the Borrower with respect to the
Credit Documents, all in a form satisfactory to the Lender;
(b) the Lender shall have received certified copies of the resolutions
of the Borrower's board of directors approving the nomination of
Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxxx, Xxx Xxxxxxx and Xxxx Xxxxxxxx
for election to serve as directors of the Borrower at the
stockholders meeting scheduled for March 12, 2002;
(c) the Lender shall have received certificates of two senior officers of
the Borrower certifying the names and true signatures of its
officers and directors authorized to sign the Credit Documents and any
other documents to be delivered by it hereunder;
(d) the Lender shall have received a certificate of good standing of the
jurisdiction of formation of the Borrower, as the Lender may
require;
(e) the Credit Documents shall have been executed and delivered to the
Lender, the Security shall have been created, and all registrations,
filings or recordings necessary or desirable to preserve, protect
or perfect the enforceability and priority of the Security shall
have been completed, all in such form, content and manner as is
satisfactory to the Lender;
(f) the Pledged Securities relating to the German Subsidiaries shall have
been registered in the name of, or as directed by, the Lender, all in a
form or forms satisfactory to the Lender, and, if requested by the
Lender shall have received notarially certified copies of the
share registers of each of the German Subsidiaries or such other
documents evidencing the registration in the name of, or as directed by
the Lender, of the Pledged Securities relating to the German
Subsidiaries, in a form satisfactory to the Lender;
(g) the Lender shall have received copies certified by a senior officer of
the Borrower of the Financial Statements of the Borrower, in a form
satisfactory to and as the Lender may require, for its most recently
completed Financial Year and Financial Quarter for which Financial
Statements are available;
(h) all of the representations and warranties contained in this Agreement
and in the Credit Documents shall be correct on and as of the Closing
Date as though made on and as of such date and the Borrower shall
have delivered a Borrower's Certificate to the Lender to such
effect on the Closing Date;
(i) the Lender shall have received a favourable opinion of counsel to the
Borrower (in form and content satisfactory to the Lender) as to such
matters as the Lender may reasonably request, including the
corporate status and share capital structure of the Borrower, the
corporate power and capacity of the Borrower to borrow money and to
grant security therefor, the due authorization, execution and delivery
of the Credit Documents and the legal, valid and binding nature of
the Credit Documents; and
(j) the Lender shall have received such other documents as it may
reasonably request.
SECTION 6.2 CONDITIONS PRECEDENT TO ALL ADVANCES. (1) The
obligation of the Lender to make an Advance and the right of the Borrower to
deliver a Borrowing Notice shall be subject to the condition precedent that on
the date of such Advance and after giving effect thereto and to the application
of proceeds therefrom: (i) the representations and warranties contained in
Article 7 hereof are true and correct in every material respect on the date of
the Advance as if made on and as at such date (except where expressly given only
as of a specified date); (ii) no event has occurred and is continuing, or would
result from such Advance, which constitutes or would constitute a Default or an
Event of Default; (iii) such Advance will not violate any applicable Law; (iv)
there shall have been no amendments (other than amendments approved by the
Lender) to the Charter Documents of the Borrower or any of the Cybernet
Companies, subsequent to those delivered to the Lender pursuant to Section
6.1(a) which are material to the ability of the Borrower to enter into this
Agreement and any of the other Credit Documents and to perform its obligations
hereunder and thereunder; and (v) the Lender shall have received, if requested,
the Borrower's Certificate and such other certificates and documentation as it
may reasonably request with respect to the foregoing and opinions from
Borrower's counsel updating opinions previously delivered.
(2) Each of the giving of any Borrowing Notice and acceptance or use by
the Borrower of the proceeds of any Advance shall be deemed for all purposes to
constitute a reaffirmation by the Borrower that, on the date of such Notice or
Advance, as the case may be, and after giving effect thereto and to the
application of any proceeds therefrom, the statements set forth in Section
6.2(1) are true and correct.
SECTION 6.3 SUPPLEMENTAL CONDITIONS PRECEDENT TO THE SECOND TRANCHE.
The obligation of the Lender to make the Advance of the Second Tranche is
subject to the fulfillment of: (i) the conditions precedent set forth in
Sections 6.1 and 6.2; and (ii) the following conditions precedent:
(a) Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxxx, Xxx Xxxxxxx and Xxxx Xxxxxxxx shall
have been elected to the board of directors of the Borrower;
(b) the Lender shall have received the resignations of Xxxxxx Xxxxxx and
Xxxxxx Xxxxxxxxxxxxx as directors of the Borrower; and
(c) all the Pledged Securities shall have been registered in the name of, or
as directed by, the Lender, all in a form or forms satisfactory to the
Lender, and the Lender shall have received notarially certified
copies of the share registers of each of the Cybernet Companies or
such other documents evidencing the registration in the name of,
or as directed by the Lender, of all the Pledged Securities, in a
form satisfactory to the Lender.
SECTION 6.4 SUPPLEMENTAL CONDITIONS PRECEDENT TO THE THIRD TRANCHE.
The obligation of the Lender to make the Advance of the Third Tranche is subject
to the fulfillment of: (i) the conditions precedent set forth in Sections 6.1,
6.2 and 6.3; and (ii) the following conditions precedent:
(a) the Borrower shall have delivered a detailed restructuring plan in form
and content satisfactory to the Lender, as determined in its sole
discretion for its current indebtedness; and
(b) the Borrower's financial condition shall be satisfactory to the Lender,
as determined in its sole discretion.
SECTION 6.5 CONDITIONS SOLELY FOR THE BENEFIT OF THE LENDER. All
conditions to the obligations of the Lender to advance the Advances are solely
for the benefit of the Lender and no other Person shall have standing to require
satisfaction of any condition and no other Person shall be deemed to be a
beneficiary of any such condition, any and all of which may be freely waived in
whole or in part by the Lender, at any time that it deems it advisable to do
so.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES BY THE BORROWER. The
Borrower represents and warrants to the Lender that:
(a) ORGANIZATION. The Borrower and each of the Cybernet Companies are
duly incorporated and organized and are validly existing and in good
standing under the laws of their respective jurisdictions;
(b) CORPORATE POWER. The Borrower has full corporate right, power and
authority to enter into and perform its obligations under each of
the Credit Documents and the Borrower and each of the Cybernet Companies
has full corporate right, power and authority to own and operate its
properties and to carry on its respective Business;
(c) CONFLICT WITH OTHER INSTRUMENTS. The execution and delivery by the
Borrower of the Credit Documents and the performance of its
Obligations thereunder, including, without limitation, the grant
of security over the Pledged Securities and the delivery thereof, and
the performance of the terms of the Security Documents, do not and
will not: (i) conflict with or result in a breach of any of the
terms, conditions or provisions of: (A) its Charter Documents;
(B) any applicable Law; or (C) any contractual restriction binding on
or affecting the Borrower or its properties the breach of which
would have a Material Adverse Effect; or (ii) result in, or
require or permit: (A) the imposition of any Lien on or with
respect to the properties now owned or hereafter acquired by the
Borrower; or (B) the acceleration of the maturity of any Debt of the
Borrower under any contractual provision binding on or affecting the
Borrower which would have a Material Adverse Effect;
(d) AUTHORIZATION, OFFICIAL BODY APPROVALS. The execution and delivery of
each of the Credit Documents and the performance by the Borrower and
CID of its respective obligations thereunder has been duly
authorized by all necessary action on the part of the Borrower and CID,
as applicable, and no Authorization under any applicable Law and no
registration, qualification, designation, declaration or filing with
any Official Body having jurisdiction over the Borrower or CID is
or was necessary therefor;
(e) EXECUTION OF BINDING OBLIGATION. This Agreement has been duly executed
and delivered by the Borrower, and this Agreement constitutes and the
remaining Credit Documents, when duly executed by the Borrower pursuant
to this Agreement and delivered for value, will constitute, legal,
valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms, subject only to: (i) any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally; and (ii)
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at Law);
(f) CONSENTS. The Borrower and each of the Cybernet Companies possess
all Consents and Authorizations under any applicable Law which are
necessary in connection with the operation of their respective
Business, the non-possession of which could reasonably be expected to
have a Material Adverse Effect. All such Consents and Authorizations
are in full force and effect and none of the Borrower or any Cybernet
Company is in default in any respect thereunder, which default could
have a Material Adverse Effect. No action exists, is pending or
threatened which has as its object the revocation, amendment or
qualification of any Consent or Authorization;
(g) NO VIOLATION OF AGREEMENTS. None of the Borrower nor any Cybernet
Company is in default under any indenture, mortgage, deed of trust,
Agreement or other instrument to which it is a party or by which it
or any of its property may be bound, which default could have a
Material Adverse Effect;
(h) NO LITIGATION. Except as disclosed on Schedule 7.1(h), there are no
actions, suits or proceedings pending or, to the knowledge of the
Borrower, after due enquiry, threatened against or affecting the
Borrower or any Cybernet Company (nor, to the knowledge of the
Borrower, after due enquiry, any basis therefor) before any Official
Body having jurisdiction over the Borrower or any Cybernet Company
which purport to or do challenge the validity or propriety of the
transactions contemplated by the Credit Documents or the
documents, instruments or agreements executed and delivered in
connection therewith or related thereto, or which if adversely
determined could reasonably be expected to have a Material Adverse
Effect;
(i) NO DEFAULTS. None of the Borrower nor any Cybernet Company is in breach
of or in default under: (i) its Charter Documents; (ii) any
applicable Law; (iii) any contract or agreement binding on or
affecting it or its property or assets (including, without limitation,
the Credit Documents); or (iv) any writ, judgment, determination or
award binding on it or affecting it where such breach or defect could,
in the case of (ii), (iii) or (iv) above, have a Material Adverse
Effect;
(j) INFORMATION DOCUMENTS. The information contained in the Information
Documents, including, without limitation, the description of the
capital structure of the Borrower and the Cybernet Companies as at the
Closing Date, is true and accurate in all material respects and
does not contain any untrue statement of a material fact. The
Information Documents do not omit to state any fact necessary in
order to make any of the information contained in the Information
Documents not misleading in all material respects;
(k) FINANCIAL STATEMENTS. The Financial Statements of the Borrower and each
of the balance sheets and related statements of earnings, retained
earnings and changes in financial position of the Borrower for a
Financial Year or a portion thereof delivered to the Lender pursuant to
Section 6.1(f) or from time to time in accordance herewith, fairly
present the financial position of the Borrower as at such dates and
the results of the operations and changes in financial positions of
the Borrower for such periods, in accordance with GAAP;
(l) MATERIAL CHANGES. No changes occurred or are continuing in respect of
the financial condition of the Borrower from that set out in the most
recently delivered Financial Statements of the Borrower which could
have a Material Adverse Effect; and no Law, regulation, rule or
policy, or any change therein, has been enacted or proposed prior to
the Closing Date which may have a Material Adverse Effect;
(m) INSOLVENCY. The Borrower and each of the Cybernet Companies are not
insolvent as at the date hereof as determined by the statutes
applicable to the Borrower and each of the Cybernet Companies;
(n) TITLE TO PLEDGED SECURITIES. Except as disclosed on Schedule 7.1(h),
the Borrower is the sole owner of, and has good and marketable
title to the Pledged Securities free and clear of all encumbrances
and the Security will constitute a first fixed charge on the
Pledged Securities. The Pledged Securities are fully-paid and
non-assessable and are not subject to any voting trust, shareholder
agreement or voting agreement;
(o) NO AGREEMENTS TO PURCHASE. No Person has any agreement or right
capable of becoming an agreement for the purchase of any Pledged
Securities;
(p) OWNERSHIP OF SHARES AND SHARE CAPITAL. The Borrower is the sole owner
of all of the outstanding share capital of each of the Cybernet
Companies, except BNS which the Borrower owns 27% of the
outstanding share capital;
(q) OPTIONS. Except as disclosed in the Borrower's proxy statement for the
March 12, 2002 shareholders' meeting, no Person, firm or
corporation has any agreement or any right capable of becoming an
agreement for the purchase of any unissued shares or other
securities of any Cybernet Company;
(r) RESTRICTIONS ON DOING BUSINESS. The Cybernet Companies are not subject
to any legislation or any judgment, order or requirement of any court
or agency which is not of general application to Persons carrying on a
business similar to theirs. There are no facts or circumstances which
could have a Material Adverse Effect upon the ability of any of the
Cybernet Companies to continue to operate its Business, operations
and affairs as presently conducted;
(s) TITLE TO PROPERTY. The property and assets of the Cybernet Companies
are owned beneficially by the Cybernet Companies as the
beneficial owners thereof with good and marketable title thereto;
(t) TAXES. All applicable taxes due and payable for which the Borrower
and the Cybernet Companies may be liable have been paid,
including, without limitation, social security withholding taxes and
other withholding taxes, value added taxes, source deductions,
goods and services taxes, excise taxes, share transfer taxes,
property taxes, duties, levies, assessments and other such charges,
including any penalties, interests and fines with respect thereto,
payable by the Borrower or the Cybernet Companies to any
government or governmental agency, authority, board, bureau or
commission, domestic or foreign;
(u) SHAREHOLDER REPAYMENTS. None of the Cybernet Companies have made any
payments or repayments to the Borrower or other Cybernet Companies
which are or would be considered to be equity replacing shareholder
loans, hidden profit
distributions or would result in the Borrower
becoming liable to the Cybernet Companies in its capacity as a
shareholder;
(v) ABSENCE OF CHANGES. Since the date of the most recently delivered
Financial Statements of the Borrower, each of the Borrower and the
Cybernet Companies has carried on its Business, operations and
affairs only in the ordinary and normal course consistent with past
practice and, without limiting the generality of the foregoing,
there has not been:
(i) any declaration, setting aside or payment of any dividend
or other Distribution with respect to any shares in the capital
of any of the Cybernet Companies or any direct or indirect
redemption, purchase or other acquisition of any such shares;
and
(ii) any issuance or sale by any of the Cybernet Companies, or any
contract entered into by any of the Cybernet Companies for the
issuance or sale of any shares in the capital of, or securities
convertible into, or exercisable for,shares in the capital of
the Borrower.
ARTICLE 8
COVENANTS OF THE BORROWER
SECTION 8.1 AFFIRMATIVE COVENANTS. Until the Obligations are paid and
satisfied in full and this Agreement has been terminated, the Borrower shall
(or, if applicable, shall cause the relevant action to take place), unless the
Lender otherwise consents in accordance with the provisions of this Agreement:
(a) FINANCIAL REPORTING. Deliver to the Lender (except as otherwise
provided herein) in reasonable detail the following information
prepared in accordance with GAAP and certified by a senior officer of
the Borrower as being, to the best of his knowledge after due enquiry,
true and correct in all material respects: (i) as soon as available at
the end of each Financial Quarter of the Borrower and in any event
within 45 days thereafter, for the Borrower, consolidated
quarterly Financial Statements, as at the end of such Financial
Quarter, for such Financial Quarter, setting forth, in each case in
Comparative form, the figures for the previous year's corresponding
Financial Quarter and the Financial Year to date, together with
any information furnished to the shareholders of the Borrower,
including, without limitation, reports, information circulars and
proxy statements; (ii) as soon as available and in any event within
90 days after the end of each Financial Year of the Borrower, a copy
of the consolidated and unconsolidated audited Financial Statements of
the Borrower for the respective Financial Year, together with
any Information furnished to the shareholders of the Borrower,
including, without limitation, reports, information circulars and
proxy statements; and (iii) such other financial statements and
information respecting the Borrower as may reasonably be requested
by the Lender from time to time;
(b) ADDITIONAL REPORTING. Deliver to the Lender: (i) promptly upon the
Borrower obtaining knowledge of any Default or Event of Default,
written notice specifying the nature thereof and the action the
Borrower proposes to take or has taken with respect thereto; and (ii)
promptly upon the Borrower obtaining knowledge of the commencement
thereof, written notice of any litigation, including arbitration,
and of any proceedings before any Official Body against the Borrower or
any of the Cybernet Companies where the amount involved exceeds euro
100,000;
(c) CORPORATE EXISTENCE. Preserve and maintain, and cause each of the
Cybernet Companies to preserve and maintain, in full force and effect:
(i) its corporate existence and all qualifications to carry on the
Business, including, without limitation, all rights (statutory and
other); and (ii) all Consents and Authorizations relating thereto,
non-compliance with which could have a Material Adverse Effect;
(d) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of the Cybernet
Companies to comply, with all applicable Laws non-compliance with
which could have a Material Adverse Effect;
(e) PAYMENT OF TAXES AND CLAIMS. Pay and discharge, and cause each of the
Cybernet Companies to pay and discharge, before the same shall
Become delinquent: (i) all Taxes, assessments and Official Body
charges or levies imposed upon or in respect of the Business or
any of the Borrower's or any Cybernet Company's assets or properties;
and (ii) all lawful claims (including, without limitation, claims for
labour, materials, supplies or services) which, if unpaid, might
become a Lien upon or in respect of the Business or the Borrower's
or any Cybernet Company's assets or properties; except, in each case,
any such Tax, assessment, charge, levy or claim which is being
contested in good faith by proper proceedings and for which the
Borrower or any Cybernet Company, as the case may be, has maintained
adequate reserves therefor and no Liens have attached;
(f) KEEPING OF BOOKS. Keep, and cause each Cybernet Company to keep, proper
books of record and account in respect of the Business, in which
full and correct entries shall be made of all financial transactions
and the assets and operations in respect of the Business in
accordance with GAAP;
(g) VISITATION, INSPECTION, ETC. Permit the Lender or any representative
thereof on reasonable notice to visit and inspect the Business, to
examine the books and records and to make copies and take extracts
therefrom, and to discuss the affairs, finances and accounts in
respect of the Business and statutory withholdings, remittances and
payments applicable to the Borrower and each Cybernet Company with
the officers of the Borrower and each Cybernet Company and to inspect
the Business to ensure compliance with all Laws at all such
reasonable times during normal office hours and as often as the
Lender or any representative thereof may reasonably request;
(h) NOTICE OF DEFAULT. Promptly notify the Lender in writing of any Default
or Event of Default or any default, or event, condition or occurrence
which with notice or lapse of time, or both, would constitute
a default, under any agreement for borrowed money to which the Borrower
or any Cybernet Company is a party and under which the Borrower or
any such Cybernet Company owes at least euro 100,000 or the
equivalent amount in another currency;
(i) MAINTAIN TITLE. Maintain, and cause each Cybernet Company to maintain,
and, as soon as reasonably practicable, defend and take, and cause each
Cybernet Company to defend and take, all action necessary or advisable
at any time, and from time to time, to maintain, defend, exercise or
renew its respective right, title and interest in and to all of
its property and assets;
(j) USE OF PROCEEDS. Use the proceeds of the Advances made available to it
hereunder for the purposes set out in Section 2.1;
(k) PAY OBLIGATIONS TO LENDER AND PERFORM OTHER COVENANTS. Make, and cause
each Cybernet Company to make, full and timely payment of its
Obligations hereunder, whether now existing or hereafter arising, and
duly comply with the terms and covenants contained in each of the
Credit Documents, all at the times and places and in the manner
set forth therein after giving effect to all applicable grace periods
provided for therein, and at all times take all action necessary to
maintain the Liens provided for under or pursuant to this Agreement and
the Security Documents as valid and perfected first Liens on the
property intended to be covered thereby and supply all information to
the Lender which is reasonably necessary for such maintenance;
(l) NOTICES OF OFFICIAL BODY ACTION. Promptly notify the Lender in writing
of any notice of any action by any Official Body or any action, suit,
proceeding or investigation (or any basis therefor) pending, or to
the knowledge of the Borrower threatened, against or affecting the
Borrower or any Cybernet Company before any Official Body, where the
amount involved exceeds euro 100,000 or the equivalent amount in
another currency;
(m) FURTHER ASSURANCES. At its cost and expense, upon request by the
Lender, duly execute and deliver, or cause to be duly executed and
delivered, to the Lender, such further instruments and do and cause
to be done such other acts as may be necessary or proper in the
reasonable opinion of the Lender to carry out more effectually the
provisions and purposes of this Agreement and the other Credit
Documents.
SECTION 8.2 NEGATIVE COVENANTS. Until the Obligations are paid and
satisfied in full and this Agreement has been terminated, the Borrower shall not
(or if applicable shall not permit the relevant action to take place), unless
the Lender otherwise consents in accordance with the provisions of this
Agreement:
(a) DEBT. Create, incur, assume or suffer to exist, or cause or allow any
Cybernet Company to create, incur, assume or suffer to exist,
contingently or otherwise, any debt other than Debt created by
this Agreement;
(b) CHANGE IN NATURE OF BUSINESS. Make or permit to exist, or allow or
cause any Cybernet Company to make or permit to exist, any change,
condition, event or occurrence in or with respect to the nature of the
Business which when taken individually with all other changes,
conditions, events or occurrences could reasonably be expected to
have a Material Adverse Effect;
(c) MERGERS, ETC. Without the prior written consent of the Lender, such
consent not to be unreasonably withheld, enter into or agree to enter
into, or allow, cause or suffer any Cybernet Company to enter into
or agree to enter into, any transaction (whether by way of
reconstruction, reorganization, consolidation, combination,
amalgamation, merger, transfer, sale, lease, modification or
otherwise) whereby: (i) all or substantially all of the
Borrower's or such Cybernet Company's undertaking, property or
assets will become the property of any other Person or the continuing
corporation resulting therefrom; (ii) there would be permitted any
change in the direct or indirect control of the Borrower or any
Cybernet Company; or (iii) the corporate structure of the Borrower
or any Cybernet Company would be modified, changed, altered or amended
in any manner;
(d) DISPOSAL OF ASSETS. Sell, exchange, lease, release or abandon or
otherwise dispose of, or allow or cause any Subsidiary to sell,
exchange, lease, release or abandon or otherwise dispose of, any of its
property or assets other than:
(i) property or assets (including, without limitation, all
property and assets which have become unservicable, unnecessary
or undesirable in connection with the Business and which are
replaced (to the extent that prudent business practice dictates
such replacement) with other property which has a similar
usefulness to the Business at the time of such replacement)
having an aggregate book value (or aggregate value of net
proceeds on such disposal) of not more than euro 100,000 based
on the greater of net book value or the value determined by the
sale, exchange, lease, release or other disposal of such
property or asset; and
(ii) property or assets that are inventory and which are sold,
exchanged, leased, released or disposed of in the ordinary
course of business.
(e) DISTRIBUTIONS. Make, allow, cause or suffer any Cybernet Company to
make any payment on account of a redemption or a distribution or
return of capital (including, without limitation, cash dividends
or any repayment of shareholder loans or Distributions) to any
shareholder or holder of securities;
(f) LOANS AND INVESTMENTS. Except as permitted pursuant to the provisions
of this Agreement, make, allow, cause or suffer any Cybernet Company
to make, other than
in the normal course of business and for purposes
of carrying on the same, any loans or advances, whether secured or
unsecured, to any Person or make or commit to make any capital
contributions to or any purchase of any shares or any other equity
investments in any other Person, including, without limitation,
any business acquisition or hostile take-over bid in respect of
any Person;
(g) BOARD NOMINEES. The board of directors of the Borrower shall not
rescind or cancel the resolution of the board approving the
nomination of Xxxxxxx X. Xxxxx, Xxxxxx Xxxxxxxx, Xxx Xxxxxxx and Xxxx
Xxxxxxxx for election to serve as directors of the Borrower at the
stockholders meeting scheduled for March 12, 2002;
(h) SUBSIDIARIES. Create, or allow or cause any Cybernet Company to create,
any Subsidiaries without the prior written consent of the
Lender; and
(i) AGREEMENTS WITH RELATED PARTIES. Enter into any agreement with any
Related Party without the prior written consent of the Lender or allow,
cause or suffer any Cybernet Company to enter into, any agreements or
arrangements with any Related Party without the prior written
approval of the independent directors of such Cybernet Company or
permit or suffer any Cybernet Company to enter into, any agreements or
arrangements with any Related Party without first receiving an opinion
as to the fairness, from a financial point of view, of such
transaction to such Cybernet Company issued by an independent U.S.
nationally recognized appraisal, accounting or investment banking firm
satisfactory to the Lender, provided that the Lender shall be
eligible to provide such opinion at the request of the Borrower.
ARTICLE 9
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT. An Event of Default shall have occurred
and be continuing in respect of the Borrower if:
(a) PAYMENT OF PRINCIPAL. The Borrower shall fail to pay the Outstanding
Amount or any portion thereof outstanding hereunder when the same
becomes due and payable;
(b) PAYMENT OF INTEREST, ETC. The Borrower shall fail to pay any Interest
hereunder when the same becomes due and payable or the Borrower shall
fail to pay any fees or other amounts hereunder when the same becomes
due and payable, and in any such case, the failure shall remain
unremedied for a period of three Banking Days following notice from
the Lender to the Borrower;
(c) REPRESENTATIONS AND WARRANTIES INCORRECT. Any representation or
warranty made by the Borrower herein or in any other Credit
Document or any representation, warranty or certification made by
the Borrower (or any of its officers) in any certificate or other
writing delivered in connection with any of the Credit Documents, or
any representation or warranty deemed to be made by the Borrower
provided
herein or therein, shall prove to have been incorrect in
any material respect when made or deemed to be made;
(d) FAILURE TO PERFORM CERTAIN COVENANTS. The Borrower shall fail, or fail
to cause any Cybernet Company, to observe any of the negative
covenants or financial covenants contained in the Credit
Documents including, without limitation, in Section 8.2 of this
Agreement;
(e) FAILURE TO PERFORM OTHER COVENANTS. Except as otherwise provided, the
Borrower shall fail to perform or observe any other term, covenant or
Agreement contained in any of the Credit Documents and such
failure shall remain unremedied for 15 days, if such term,
covenant or agreement is reasonably capable of being remedied in such
period (or if such failure is not reasonably capable of being
remedied within 15 days, the Borrower has not commenced all reasonable
steps to remedy the default within such 15 day period and has not
diligently pursued such steps until the remedy of such
failure has been achieved);
(f) FAILURE TO PAY DEBTS TO THIRD PARTIES. The Borrower or any Cybernet
Company shall fail to pay the principal of or premium or interest on
any Debt which is outstanding in an aggregate principal amount in
excess of euro 200,000 (or the equivalent amount in any other
currency) in respect of the Borrower or such Cybernet Company when
the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such
failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or
any other event shall occur or condition shall exist, and shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to any such Debt, if the effect of
such event or condition is to accelerate, or to permit the acceleration
of, the maturity of Debt of the Borrower or any Cybernet Company
which is outstanding in an aggregate principal amount exceeding euro
100,000 (or the equivalent amount in any other currency);
(g) EVENT OF BANKRUPTCY. The Borrower or any Cybernet Company shall commit
or permit to exist any Event of Bankruptcy in respect of the
Borrower or any such Cybernet Company;
(h) JUDGMENTS. Any judgment or order for the payment of money in excess of
euro 100,000 in respect of the Borrower or any Cybernet Company
shall be rendered against the Borrower or any Cybernet Company
and either: (i) enforcement proceedings shall have been commenced
by any creditor upon such judgment or order; or (ii) there shall be
any period of 15 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
(i) UNENFORCEABILITY. This Agreement or any Credit Document shall, at any
time after execution and delivery, and for any reason (other than in
accordance with its respective terms or with the consent of the
Lender), cease to be in full force and
effect or shall be declared to
be null and void, or the validity or enforceability of any thereof shall
be contested by the Borrower or any other party thereto, or the
Borrower or any other such party shall deny that it has any further
liability or obligation thereunder;
(j) CHALLENGE TO SECURITY. Any of the Security shall at any time after the
execution and delivery of the relevant Security Document and for
any reason (other than with the consent of the Lender) cease to
constitute a valid and subsisting Lien in respect of the assets and
properties referred to therein or cease to rank in priority or in
the manner contemplated herein other than by reason of an act or
omission of the Lender;
(k) CEASING TO CARRY ON BUSINESS. The Borrower or any Cybernet Company
shall cease to carry on its Business or any material part of the
Business to be conducted by it;
(l) EXPROPRIATION. All or substantially all of the assets or properties of
the Business of the Borrower or any Cybernet Company shall be
taken by an Official Body by the exercise of any power of
expropriation, condemnation or eminent domain;
(m) MATERIAL ADVERSE EFFECT. There occurs any change, condition, event or
occurrence which, when considered individually or together with
all other changes, conditions, events or occurrences could reasonably
be expected to have a Material Adverse Effect; or
(n) CHANGE OF CONTROL. A change of Control occurs with respect to the
Borrower or any Cybernet Company by contractual or other means,
then, other than as specifically provided herein, in any such event, the Lender
may by notice to the Borrower: (i) cancel all the obligations of the Lender in
respect of the Commitment (whereupon no further Advances may be made and any
Borrowing Notice or request made with respect to an Advance occurring on or
after the date of such Notice or request shall cease to have effect); (ii)
declare the Obligations under the Agreement to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by the Borrower; and (iii) take all steps and proceedings as,
in the opinion of the Lender or the Security Agent are necessary or desirable to
preserve or protect the Security, including, without limitation, steps or
proceedings to cure defaults or advance monies for the purposes of preserving
the Business. Upon the occurrence of any event described in Section 9.1(g)
above, the Outstanding Amount and all Interest, fees and other amounts due to
the Lender hereunder shall thereupon become and be forthwith due and payable
without declaration, presentment, demand, protest or notice of any kind, all of
which are expressly waived by the Borrower.
SECTION 9.2 CURE OF DEFAULT. The Lender and the Security Agent shall
have the right, but shall not be obligated, from time to time while a Default or
Event of Default shall have occurred and remain continuing, to take in its name
or in the name of the Borrower or otherwise such action as it shall consider
necessary or desirable to cure or rectify such Default or Event of Default and,
in so doing, the Lender and the Security Agent shall not incur any liability to
the Borrower if any such
action taken by the Lender or the Security Agent on the
Borrower's behalf shall prove to be in whole or in part inadequate or invalid
and the Borrower shall indemnify and hold the Lender and the Security Agent
harmless from and against any loss, costs, liability or expense (including,
without limitation, reasonable fees on a solicitor and a solicitor's own client
basis and disbursements of counsel) paid, suffered or incurred by the Lender and
the Security Agent in connection therewith or arising therefrom.
ARTICLE 10
SECURITY AGENT
SECTION 10.1 APPOINTMENT. The Lender hereby irrevocably appoints the
Security Agent to act as its agent and trustee under the Security Documents to
which the Security Agent is a party and authorizes the Security Agent to take
such action on its behalf and to exercise and enforce such rights, powers and
discretions as are expressly or by implication delegated to the Security Agent
by the terms thereof and such rights, powers and discretions as are reasonably
incidental thereto.
SECTION 10.2 CHANGE OF SECURITY AGENT. The Security Agent may resign
at any time by giving not less than 30 days prior written notice to the Lender
and the Borrower. The Lender shall have the right to appoint a successor
security agent, but if it does not do so within the 30 day notice period, the
Security Agent may do so on its behalf. The resignation of the Security Agent
shall not take effect until a successor security agent has been appointed. Upon
such appointment, the successor security agent shall succeed to and become
vested with all of the rights, powers, discretions and duties of the retiring
Security Agent.
SECTION 10.3 AGENCY. In respect of its duties and functions hereunder
and under the Security Documents the Security Agent shall be considered to be
acting solely as an agent of the Lender in an administrative capacity only.
SECTION 10.4 DUTIES OF SECURITY AGENT. The Security Agent shall:
(a) promptly account to the Lender for all payments received by it from the
Borrower or otherwise in connection with the Credit Facility and in
connection with the provisions of this Agreement;
(b) promptly inform the Lender of the contents of any document which it
receives in respect of the Credit Facility which it considers to be
material and of any Event of Default of which it has actual
knowledge; and
(c) take or refrain from taking any action in accordance with the lawful and
proper instructions of the Lender.
SECTION 10.5 SECURITY AGENT PERFORMANCE. The Security Agent may:
(a) perform any of its duties and functions hereunder through its directors,
officers, employees or agents;
(b) engage and pay for the advice or services of lawyers, accountants or
other experts and professional advisors as it considers necessary or
desirable and rely and act upon such advice;
(c) refrain from exercising any of its rights, powers and discretions unless
and until instructed by the Lender; and
(d) assume that no Event of Default or prospective Event of Default has
occurred and that no party is in breach of its obligations under this
Agreement or any of the Security Documents unless it has actual
knowledge to the contrary.
SECTION 10.6 TRUSTEE. The Security Agent shall hold its interest in
the Security Documents as trustee for and on behalf of and for the benefit of
the Lender.
ARTICLE 11
ASSIGNMENTS
SECTION 11.1 (1) The Borrower acknowledges that the Lender may,
from time to time, sell and assign all or any portion of the Advances and
extensions of credit made and to be made to the Borrower hereunder at such times
and upon such terms as it may determine, without any obligation to obtain any
consent from the Borrower or any other Person.
(2) The Borrower authorizes the Lender to disclose to any such
purchasing lender (each, a "Transferee") and any prospective Transferee any and
all financial information in such Lender's possession concerning the Borrower
which has been delivered to such Lender by or on behalf of the Borrower pursuant
to this Agreement or which has been delivered to such Lender by or on behalf of
the Borrower in connection with such Lender's credit evaluation of the Borrower
prior to entering into this Agreement, provided that such Transferee agrees to
hold such information in confidence in the ordinary course of its business.
SECTION 11.2 The Lender shall have the right at any time to assign to
one or more Persons, commercial finance lenders or other financial institutions
all or a portion of its rights and obligations under this Agreement. Upon
execution of an assignment and transfer agreement (a) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such assignment, have the rights and
obligations of the Lender hereunder, and (b) the Lender shall, to the extent
that its rights and obligations hereunder have been assigned by it pursuant to
such assignment, relinquish its rights and be released from its obligations
under this Agreement. The Borrower shall, if necessary, execute any documents
reasonably required to effectuate the assignments.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 RECORDS. The unpaid amount of the Credit Facility and the
unpaid Interest accrued thereon shall at all times be ascertained from the books
and records of the Lender, which shall be conclusive absent manifest error,
fraud, dishonesty or improper conduct, and a certificate of any officer of the
Lender as to such records shall be conclusive evidence of such records.
SECTION 12.2 BROKERAGE. The Lender represents that it has not engaged
any broker in connection with this Agreement. The Lender shall not be liable in
any way for the payment of any brokerage fees or commissions to any broker or
other Person entitled or claiming to be entitled to same in connection herewith
and the transactions contemplated hereby, and the Borrower by acceptance hereof
agrees to hold the Lender harmless from all claims for brokerage fees or
commissions which may be made in connection with the transactions contemplated
hereby.
SECTION 12.3 NOTICES, ETC. (1) Except as otherwise expressly
provided herein, all notices, requests, demands, directions and communications
by one party to the other shall be sent by facsimile or similar means of
recorded communication or hand delivery, and shall be effective when hand
delivered or, in the case of facsimile or similar means of recorded
communication, when received. All such notices shall be given to a party at its
address given on the signature page of this Agreement, or in accordance with any
unrevoked written direction from such party to the other party in accordance
with this Section 12.3(1).
(2) Except as otherwise provided hereunder, all deliveries of Financial
Statements and other documents to be made by the Borrower to the Lender
hereunder shall be made by making delivery of such Financial Statements and
documents directly to the Lender at its address set out on the signature pages
of this Agreement, or to such other address as the Lender may from time to time
notify to the Borrower. All such deliveries shall be effective only upon actual
receipt.
SECTION 12.4 REIMBURSEMENT FOR CERTAIN EXPENSES. (1) The
Borrower shall pay or cause to be paid and shall indemnify and save the Lender
and the Security Agent harmless against liability for the payment of all
reasonable out-of-pocket expenses, including, without limitation:
(a) counsel, assessment or compliance review fees and disbursements
(including legal fees and disbursements on a solicitor and a
solicitor's own client basis) incurred by the Lender or the Security
Agent in connection with: (i) the development, preparation, execution
and interpretation of this Agreement and the other Credit Documents
or any agreement or instrument contemplated hereby or thereby; (ii)
on-site inspections by the Lender or the Security Agent or its
representatives required in connection with the enforcement of the
Credit Documents; (iii) advice of counsel to the Lender and the
Security Agent with respect to the administration of the Credit
Facility, the Credit Documents or any transaction contemplated
hereunder or thereunder; (iv) the enforcement or preservation of
rights under or the refinancing, renegotiation or restructuring of
the Obligations under this Agreement or any obligations under
the other Credit Documents or any agreement or instrument
contemplated hereby or thereby; (v) stamp taxes and custodian
fees incurred and chargeable in connection with the Pledged
Securities if charged to the Lender or the
Security Agent by a third party; or (vi) any requested amendments, waivers
or consents pursuant to the provisions hereof or of the other Credit
Documents, including such expenses as may be incurred by the Lender or the
Security Agent in the collection of the Obligations or any litigation,
proceeding, dispute or so-called "work-out" in any way relating to the
Obligations or the Credit Documents; and
(b) all such expenses in connection with: (i) the Borrower's failure to
complete the Credit Facility or to make any payment, repayment or
prepayment on the date required hereunder or specified by it in any
notice given hereunder; (ii) the Borrower's failure to pay any amount
including, without limitation, any Interest or fees, due under any
Credit Document on its due date; or (iii) the Borrower's failure to
give any notice required to be given by it to the Lender hereunder.
The obligations of the Borrower under Section 11.4 shall survive the making of
the Advances and the payment and satisfaction of the indebtedness and liability
of the Borrower to the Lender pursuant to this Agreement.
(2) The Lender and the Security Agent shall be reimbursed on the
Closing Date for legal fees and disbursements incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement and the
Credit Documents to the Closing Date.
SECTION 12.5 NO WAIVER; REMEDIES. No failure on the part of the
Lender, the Security Agent or the Borrower to exercise, and no delay in
exercising, any right under any of the Credit Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any right under any
of the Credit Documents preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by Law.
SECTION 12.6 CONFIDENTIALITY. Subject to the next following
sentence, the Lender agrees to use reasonable efforts to ensure that any
Financial Statement or other information relating to the Business,
properties or condition, financial or otherwise, of the Borrower or the
Cybernet Companies which may be delivered to the Lender pursuant to this
Agreement which is not publicly filed, distributed to shareholders of the
Borrower or otherwise made available to the public generally (and which is not
independently known to the Lender) will, to the extent permitted by Law, be
treated confidentially by the Lender and will not, except as provided for
herein or with the consent of the Borrower, be distributed or otherwise made
available by the Lender to any Person other than the Lender's employees,
authorized agents, counsel or representatives, who shall be made aware
of the confidential nature of such information. The Lender is hereby
authorized to deliver a copy of any Information Document, Financial
Statements or any other information relating to the Business, operations, or
financial condition of the Borrower and its Subsidiaries which may be furnished
to it under this Agreement or otherwise to: (i) any Official Body having
jurisdiction over the Lender, if required by such Official Body; (ii) any
Subsidiary or Affiliate of the Lender to whom such information needs to be
disclosed by reason of internal credit policy or for any other proper reason
directly related to the advancement of the intents and purposes of this
Agreement; and (iii) any proposed assignee hereunder. Any such Official Body,
Subsidiary or Affiliate or assignee to whom such information is disclosed shall
be made aware of the confidential nature of such information.
SECTION 12.7 TAXES, COSTS, ETC. (1) All payments by the
Borrower under this Agreement and the other Credit Documents shall be made free
and clear of, and without deduction or withholding for, Taxes unless such Taxes
are required by Law to be deducted or withheld. If the Borrower shall be
required by Law to deduct or withhold any Taxes from or in respect of any sum
payable under this Agreement or the other Credit Documents: (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions or withholdings applicable to additional amounts paid under this
Section) the Lender receives an amount equal to the sum they would have received
if no deduction or withholding had been made; (ii) the Borrower shall make such
deductions or withholdings; and (iii) the Borrower shall pay the full amount
deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable Law.
(2) The Borrower shall pay all Taxes which arise from any payment made
under any of the Credit Documents or from the execution, delivery or
registration of, or otherwise in respect to, any of the Credit Documents.
(3) The Borrower shall indemnify and save harmless the Lender for the
full amount of Taxes levied by any jurisdiction on, or in relation to, any sum
received or receivable hereunder by the Lender (other than income or capital
taxes). Payment under this indemnification shall be made within 30 days from
the date the Lender makes written demand therefor. A certificate as to the
amount of such Taxes submitted to the Borrower by the Lender shall be conclusive
evidence, absent manifest error, of the amount due from the Borrower to the
Lender.
(4) Without prejudice to the survival of any other agreement or
obligations of the Borrower hereunder, the obligations of the Borrower under
this Section shall survive the payment in full of the Outstanding Amount and
Interest thereon.
SECTION 12.8 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default the Lender shall have the right, at any time
and from time to time, to the fullest extent permitted by Law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Lender
to or for the credit or the account of the Borrower, against any and all of the
obligations of the Borrower now or hereafter existing under any of the Credit
Documents, irrespective of whether or not the Lender shall have made any demand
under any of the Credit Documents and although such obligations may be
unmatured. The Lender agrees to promptly notify the Borrower after any such
set-off and application made by the Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Lender under this Section are in addition to the other rights and
remedies (including, without limitation, other rights of set-off) which the
Lender may have.
SECTION 12.9 JUDGMENT CURRENCY. (1) If, for the purposes of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
to the Lender from the Original Currency into the Judgment Currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Lender could purchase the Original Currency with the Judgment
Currency on the Banking Day preceding that on which final judgment is paid or
satisfied.
(2) The obligations of the Borrower in respect of any sum due in the
Original Currency from it to the Lender under any of the Credit Documents shall,
notwithstanding any judgment in any Judgment Currency, be discharged only to the
extent that on the Banking Day following receipt by the Lender of any sum
adjudged to be so due in such Judgment Currency, the Lender may in accordance
with normal banking procedures purchase the Original Currency with such Judgment
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due to the Lender in the Original Currency, the Borrower agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the
Lender against such loss, and if the amount of the Original Currency so
purchased exceeds the sum originally due to the Lender in the Original Currency,
the Lender agrees to remit such excess to the Borrower.
SECTION 12.10 GOVERNING LAW. The Credit Documents shall be governed
by, and construed in accordance with, the laws of the Province of British
Columbia, Canada applicable therein and shall be treated in all respects as
British Columbia contract without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
SECTION 12.11 CONSENT TO JURISDICTION. (1) The Borrower hereby
irrevocably submits to the jurisdiction of any British Columbia court sitting in
Vancouver, in any action or proceeding arising out of or relating to this
Agreement, or any other Credit Document, and hereby irrevocably agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such Vancouver court. The Borrower agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.
The parties agree that any such action or proceeding shall be conducted in the
English language.
(2) Nothing in this Section shall affect the right of the Lender to
serve legal process in any other manner permitted by Law or affect the right of
the Lender to bring any action or proceeding against the Borrower or its
property in the courts of other jurisdictions.
SECTION 12.12 SUCCESSORS AND ASSIGNS. (1) This Agreement shall
become effective when it is executed by the parties and thereafter shall be
binding upon and enure to the benefit of the parties, and their respective
successors and permitted assigns.
(2) The Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lender, which consent may be arbitrarily withheld.
(3) The Lender may pledge its interests in the Credit Documents in the
ordinary course of its business including to any Official Body.
SECTION 12.13 SEVERABILITY. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
SECTION 12.14 PRIOR UNDERSTANDINGS. This Agreement and the Credit
Documents supersede all prior understandings and agreements, whether written or
oral, and constitute the entire agreement among the parties hereto relating to
the transactions provided for herein.
SECTION 12.15 TIME OF ESSENCE. Time shall be of the essence hereof.
SECTION 12.16 COUNTERPARTS. This Agreement may be executed in
counterparts and by facsimile and by different parties in separate counterparts,
each of which when so executed shall be deemed an original and all of which,
taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER
-------------
CYBERNET INTERNET SERVICES
Xxxxxx-Xxxxxx-Ring 19-23 INTERNATIONAL, INC.
00000
Xxxxxx, Xxxxxxx Per:----------------------------
Authorized Signing Officer
Tel: 00 (00) 0 00 00 000 Per:----------------------------
Fax: 00 (00) 0 00 00 000 Authorized Signing Officer
THE LENDER
-----------
c/o 1000 - 000 Xxxx Xxxxxxx Xxxxxx MFC MERCHANT BANK S.A.
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0 Per:----------------------------
Authorized Signing Officer
Tel: (000) 000-0000 Per:----------------------------
Fax: (000) 000-0000 Authorized Signing Officer
SECURITY AGENT
---------------
c/o 0000 - 000 Xxxx Xxxxxxx Xxxxxx 000000 X.X. LTD.
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0 Per:----------------------------
Authorized Signing Officer
Tel: (000) 000-0000 Per:----------------------------
Fax: (000) 000-0000 Authorized Signing Officer
SCHEDULE A
BORROWING NOTICE
To: MFC MERCHANT BANK S.A. (the "Lender")
The undersigned, Cybernet Internet Services International, Inc. (the
"Borrower"), refers to the Credit Facility Agreement dated for reference March
12, 2002 (the "Credit Facility Agreement", the terms defined therein being used
herein as therein defined) between the Lender, the Security Agent and the
Borrower, and hereby gives you notice pursuant to Section 3.2 of the Credit
Facility Agreement that the Borrower hereby requests an Advance under the Credit
Facility Agreement, and, in that connection, sets forth below the information
relating to such Advance as required by Section 3.2 of the Credit Facility
Agreement:
(a) The date of the Advance, being a Banking Day, is *;
(b) The aggregate amount of the Advance is *; and
(c) The Outstanding Amount is *.
Dated: *
Yours truly,
CYBERNET INTERNET SERVICES
INTERNATIONAL, INC.
Per: --------------------------------
Authorized Signing Officer
Per: --------------------------------
Authorized Signing Officer
SCHEDULE B
BORROWER'S CERTIFICATE
CERTIFICATE OF OFFICER
OF
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
TO: MFC MERCHANT BANK S.A., as lender
636892 B.C. LTD., as security agent
RE: Credit Facility Agreement (as the same may be amended, extended or
replaced from time to time, the "Credit Facility Agreement") dated for
reference March 12, 2002 between MFC Merchant Bank S.A. as lender,
636892 B.C. Ltd., as security agent, and Cybernet Internet
Services International, Inc. (the "Corporation"), as borrower
Capitalized terms used in this Certificate, which are defined in the Credit
Facility Agreement but are not otherwise defined herein, have the meanings
ascribed to such terms in the Credit Facility Agreement.
I, Xxxxxxx Xxxx, HEREBY CERTIFY that:
1. I am the President and Chief Executive Officer of the Corporation and CID
and as such have personal knowledge of the matters hereinafter stated.
2. I have made or caused to be made such examinations or investigations as
are, in my opinion, reasonably necessary to make the statements set out herein
including, without limitation, the examinations described in this Certificate,
and I have furnished this Certificate with the intent that it may be relied upon
by the Lender as a basis for the consummation of the transactions contemplated
by the Credit Facility Agreement.
REPRESENTATIONS, WARRANTIES AND COVENANTS
3. The representations and warranties set out in the Credit Facility
Agreement and in any of the Credit Documents to which the Corporation is a party
are true and correct in all respects as at the date hereof.
4. The Corporation is not as at the date hereof in breach of any of the
covenants contained in the Credit Facility Agreement or in any of the Credit
Documents to which the Corporation is a party.
EVENTS OF DEFAULT
5. There exists no Default and no Event of Default has occurred or is
continuing as at the date hereof.
INCUMBENCY
6. The persons referred to below are the director(s) and officer(s) of the
Corporation and are duly elected or appointed to the office(s) of the
Corporation as set out opposite his/her name and, where a signature appears
opposite such name, such signature is his/her true signature.
Name Office Signature
---- ------ ---------
Xxxxxxx Xxxx President and Chief Executive Officer ----------------------
Paulo di Fraia Chief Financial Officer ----------------------
SOLVENCY
7. I have reviewed the relevant provisions of the statutes applicable to the
Corporation.
8. Upon the enquiries, calculations and considerations referred to in
paragraphs 2 and 7 above, I have concluded that:
(a) at the time of entering into the transactions contemplated by the Credit
Facility Agreement and the granting of any security in connection
therewith, the Corporation is not insolvent, and the entering
into the transactions contemplated by the Credit Facility Agreement
and the granting of any security in connection therewith will not
render the Corporation insolvent;
(b) there exists no Event of Bankruptcy which has occurred in respect of the
Corporation which is continuing as at the date hereof;
(c) there are reasonable grounds for believing, and the director(s) of the
Corporation are of the opinion, that entering into the Credit Facility
Agreement and consummating the transactions contemplated thereby is
in the best interest of the Corporation; and
(d) the Corporation is not prohibited under Law or otherwise, including,
without limitation, under any shareholders' agreement, if any,
relating to the Corporation, from borrowing any sum or sums of
money, granting any
security in connection therewith or entering into the Credit Facility
Agreement and consummating the transactions contemplated thereby.
DATED as of the day of , 2002.
------- -------------
-----------------------------------------
XXXXXXX XXXX
President and Chief Executive Officer
SCHEDULE C
PLEDGED SECURITIES
NUMBER AND/OR
PLEDGOR DESCRIPTION OF SHARE CAPITAL
---------------------------------------------- --------------------------------------------------------------------
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. All of the issued and outstanding share capital and/or capital stock
Cybernet Internet Services International, Inc. 27% of the issued and outstanding share capital and/or capital stock
PLEDGOR COMPANY NAME
---------------------------------------------- ----------------------------------------------
Cybernet Internet Services International, Inc. Vianet Telekommunikations AG, Austria
Cybernet Internet Services International, Inc. Novento Telecom AG, Germany
Cybernet Internet Services International, Inc. Cybernet Schweiz AG, Switzerland
Cybernet Internet Services International, Inc. Cybernet Sagl (GmbH) Lugano, Switzerland
Cybernet Internet Services International, Inc. Cybernet Internet Dienstleistungen AG, Germany
Cybernet Internet Services International, Inc. Multicall Telefonmarketing AG, Germany
Cybernet Internet Services International, Inc. Cybernet Italia S.p.A., Italy
Cybernet Internet Services International, Inc. B&N Software AG, Germany
SCHEDULE D
PROMISSORY NOTE
*, 2002
PRINCIPAL AMOUNT: EURO *
FOR VALUE RECEIVED, the undersigned CYBERNET INTERNET SERVICES INTERNATIONAL,
INC. (the "Borrower"), of Xxxxxx-Xxxxxx-Xxxx 00-00, 00000 Xxxxxx, Xxxxxxx,
hereby promises to pay to MFC MERCHANT BANK S.A. (the "Lender"), of Cours de
Rive 6, Case Postale, CH-1211, Geneva 11 or at such address or at such other
place as the Lender may from time to time designate by written notice to the
Borrower, on *, 2003, the principal amount of * EUROS, together with
Interest thereon calculated and payable upon the terms set out in that
certain credit facility agreement made between the Borrower and the Lender
dated for reference March 12, 2002, as the same may be amended, extended or
replaced from time to time (the "Credit Facility Agreement").
Terms used as defined terms herein and not otherwise defined have the meanings
set out in the Credit Facility Agreement.
THIS NOTE shall be governed by and construed in accordance with the laws of the
Province of British Columbia, Canada without giving effect to the applicable
principles of conflicts of law to the extent that the applications of the laws
of another jurisdiction would be required thereby. The Borrower hereby
irrevocably submits to the jurisdiction of any British Columbia court sitting in
Vancouver, and any action or proceeding arising out of or relating to this
promissory note. The parties agree that any such action or proceeding shall be
conducted in the English language.
PRESENTMENT for payment, demand, protest and notice of dishonour and protest
hereof are hereby waived.
CYBERNET INTERNET SERVICES
INTERNATIONAL, INC.
By:-------------------------
Name:-----------------------
Title:---------------------- c/s
SCHEDULE E
SCHEDULE 7.1(H)
LITIGATION
1. In 1998, the Borrower acquired Vianet through an exchange of 100% of the
outstanding shares of the stock of Vianet shares for shares of the
Borrower. In connection with the acquisition, Tristan Libischer
exchanged 50% of the outstanding shares of Vianet for shares of
the Borrower. Mr. Libischer has threatened to assert that the Vianet
acquisition agreement is voidable and that his Vianet shares should be
returned to him. No action has been filed in any court. The Borrower
believes that Mr. Libischer's claim is entirely without merit.
2. In 1997, Xxxxxxx Xxxx, Borrower's Chief Executive Officer, granted to
Xxxxx Xxxxxx and Xxxx Xxxxxxxx options to purchase differing number of
shares of Borrower's common stock owned by Xx. Xxxx. The options were
granted in order to induce Messrs. Xxxxxx and Xxxxxxxx to join and
remain with the Borrower in key technical positions. Upon exercise
of their options, Messrs. Xxxxxx and Xxxxxxxx demanded that
Xx. Xxxx deliver shares of Borrower's stock that are freely tradeable
under United States securities laws. Under the applicable securities
laws, Xx. Xxxx could not legally comply with those demands. Xx.
Xxxxxxxx filed suit in Germany with regard to 75% of his options. On
February 21, 2002, the German court awarded Xx. Xxxxxxxx Euro
314,444.50 and costs of approximately Euro 44,500. Xx. Xxxx intends to
appeal this judgment. To date, Xx. Xxxxxx has not filed suit nor has
Xx. Xxxxxxxx filed suit with regard to his remaining options.
The Borrower has agreed to indemnify Xx. Xxxx against any loss that
may be incurred as a result of any claim by Messrs. Xxxxxx and Xxxxxxxx
relating to the above matter.
SCHEDULE F
SCHEDULE 7.1(N)
TITLE TO PLEDGED SECURITIES
The Borrower is subject to a Shareholders' Agreement dated August 17, 2000 among
the Borrower and certain other shareholders of B&N Software AG (the
"Shareholders Agreement"). Section III(1) of the Shareholders Agreement
-----------------------
provides that dispositions of shares of B&N Software AG be approved by Cybernet
and two other named shareholders (Xx. Xxxxxx Xxxxxx and Xxx. Xxxxxxxxx Xxxxxx).
In addition, certain shareholders (namely, Xx. Xxx Xxxxx, Xx. Xxxxxxx Xxxxx, Xx.
Xxxx Bernigshausen) may object to a disposition by Cybernet for cause, such as
where Cybernet intends to sell its shares to a competitor of B&N Software AG or
where a stock exchange listing is substantially impaired. A copy of the
Shareholders Agreement has been provided to the Lender.
SCHEDULE D
DI FRAIA AMENDMENT
TERMINATION AGREEMENT
between
PAOLO DI FRAIA,
000 Xxxxxxxxx Xxxxxxxx
X - 00000 Xxxxx, Xxxxxx
- hereinafter referred to as "EMPLOYEE" -
and
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.,
Xxxxxx-Xxxxxx-Xxxx 00-00, X-00000 Xxxxxx
- hereinafter referred to as "CYBERNET" -
This Termination Agreement (the "Agreement") is entered into this 12th day of
March, 2002 by and between the Employee and Cybernet.
SEC. 1
TERMINATION OF THE EMPLOYMENT AGREEMENT
The employment agreement between the Employee and Cybernet, as amended, (the
"Employment Agreement") shall be terminated effective September 15, 2002 unless
terminated earlier by written notice of 30 days (the "Termination Date").
SEC. 2
RESIGNATION AS DIRECTOR AND OFFICER OF SUBSIDIARIES
The Employee shall resign as Director and/or Officer, as the case may be, of the
following subsidiaries of Cybernet on or before the Termination Date:
Cybernet Internet Dienstleistungen AG, Germany
Novento Telecom AG, Germany
Multicall Telefonmarketing AG, Germany
Cybernet Network Services GmbH, Germany
Opennet GmbH, Germany
Cybernet Internet Beteiligungs GmbH, Germany
Vianet Telekommunikations AG, Austria
Cybernet Italia S.p.A., Italy
Eclipse S.p.A., Italy
Cybernet Schweiz AG, Switzerland
Sunweb Internet Services GmbH, Switzerland
Cybernet Srgl, Switzerland
SEC. 3
CONTINUED REMUNERATION PAYMENTS
The Employee shall be entitled to continued remuneration under the Employment
Agreement in the gross amount of 12'784 per month until the Termination Date,
due and payable at the end of each month, unless otherwise earlier terminated by
Cybernet for cause.
SEC. 4
SEVERANCE PAYMENT
As severance payment for not realized income after the Termination Date, the
Employee shall receive, subject to the specified conditions, the following
amounts, due and payable as follows:
1. Cybernet shall pay the Employee 82.500 on the signing hereof.
2. If Telehouse Deutschland GmbH completes the sale and transfer agreement
under the option agreement as described in the Form 8-K filed by Cybernet with
the U.S. Securities and Exchange Commission on January 30, 2002, then within 15
days of closing, Cybernet will pay to the Employee 205,000.
3. Cybernet shall pay the Employee 82.500 on the Termination Date,
provided that the Employee was not terminated for cause.
The entire severance payment is subject to any applicable tax and social
security withholdings.
SEC. 5
STOCK OPTIONS
The Employee is only entitled to options to purchase 240'000 shares of common
stock of Cybernet as specified in EXHIBIT 1. For these options, the provisions
of the Cybernet 1998 Stock Incentive Plan shall continue to apply accordingly.
SEC. 6
TRANSFER OF ALL BUSINESS MATTERS
The Employee will transfer all business matters belonging to his sphere of
duties to the Board of Directors of Cybernet on or before the Termination Date.
SEC.7
RETURN OF COMPANY PROPERTY
The Employee shall return on or before the Termination Date, all property
belonging to Cybernet or its subsidiaries, including but not limited to company
car, cell phone, laptop, keys, documents and data, as well as all other company
items that contain or might reveal business secrets of Cybernet or its
subsidiaries. Furthermore, the Employee shall not make or retain any copies or
other duplicates of the above-mentioned documents and data.
SEC. 8
CONFIDENTIALITY
The Employee shall, following the termination of the Employment Agreement up to
an indefinite period of time, observe secrecy and confidentiality with regard to
all business and operational secrets of Cybernet and its subsidiaries.
SEC. 9
NON-SOLICITATION OF EMPLOYEES AND CUSTOMERS
Within two years after the Termination Date the Employee will not, directly or
indirectly, either individually or on behalf of any other person or entity (i)
solicit customers, suppliers, or other business relations of Cybernet or its
subsidiaries for the purpose of interfering with or encouraging them to
terminate their relationship with Cybernet or its subsidiaries, or (ii)
encourage other employees of Cybernet or its subsidiaries to terminate their
employment with Cybernet or its subsidiaries.
SEC. 10
SETTLEMENT OF ALL CLAIMS
By the consummation of this Agreement any and all claims of (i) the Employee
against Cybernet and its subsidiaries or (ii) Cybernet or its subsidiaries
against the Employee arising from or relating to the Employment Agreement shall
be finally settled except as provided (i) herein, (ii) in the Mutual Release as
of today entered into by and between Cybernet, the Employee and various other
parties, or (iii) in any other release and indemnity arrangement or settlement
agreement.
SEC. 11
MISCELLANEOUS
1. Should any provision of this Agreement or any provision to be
incorporated in future be or become invalid or unenforceable, the validity of
the balance of this Agreement shall not be affected thereby. The same applies if
this Agreement contains any omissions. In lieu of the invalid or unenforceable
provision or in order to complete any omission, a fair provision shall apply
which to the extent legally permissible comes as close as possible to what the
parties hereto had intended or would have intended according to the spirit and
purpose of this Agreement if they had considered the matter at the time this
Agreement was executed. The same applies if the provision is invalid because of
the stipulated scope or time period.
2. This Agreement shall be governed exclusively by German law and construed
in accordance with the laws of the Federal Republic of Germany.
3. The regional court of Munich, Germany, shall have exclusive jurisdiction
of any case or controversy arising under or in connection with this Agreement.
4. Any amendment or supplement to this Agreement must be in writing.
----------------------------- ------------------------------
Employee Cybernet Internet Services
Paolo di Fraia International, Inc.
EXHIBIT 1 STOCK OPTION TABLE
[ [TABLE OMITTED]
]
SCHEDULE E
XXXX AMENDMENT
TERMINATION AGREEMENT
between
XXXXXXX XXXX,
Xxx-Xxxxxxx-Xxx. 00, X-00000 Xxxxxxxxx
- hereinafter referred to as "EMPLOYEE" -
and
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.,
Xxxxxx-Xxxxxx-Xxxx 00-00, X-00000 Xxxxxx
- hereinafter referred to as "CYBERNET" -
This Termination Agreement (the "Agreement") is entered into this 12th day of
March, 2002 by and between the Employee and Cybernet.
SEC. 1
TERMINATION OF THE EMPLOYMENT AGREEMENT
The employment agreement between the Employee and Cybernet, as amended, (the
"Employment Agreement") shall be terminated effective September 15, 2002 unless
terminated earlier by written notice of 30 days (the "Termination Date").
SEC. 2
RESIGNATION AS DIRECTOR AND OFFICER OF SUBSIDIARIES
The Employee shall resign as Director and/or Officer, as the case may be, of the
following subsidiaries of Cybernet on or before the Termination Date:
Cybernet Internet Dienstleistungen AG, Germany
Novento Telecom AG, Germany
Multicall Telefonmarketing AG, Germany
Cybernet Network Services GmbH, Germany
Opennet GmbH, Germany
Cybernet Internet Beteiligungs GmbH, Germany
Vianet Telekommunikations AG, Austria
Cybernet Italia S.p.A., Italy
Eclipse S.p.A., Italy
Cybernet Schweiz AG, Switzerland
Sunweb Internet Services GmbH, Switzerland
Cybernet Srgl, Switzerland
SEC. 3
CONTINUED REMUNERATION PAYMENTS
The Employee shall be entitled to continued remuneration under the Employment
Agreement in the gross amount of 14.913 (Euro fourteen thousand nine hundred
thirteen) per month until the Termination Date, due and payable at the end of
each month, unless otherwise earlier terminated by Cybernet for cause.
SEC. 4
SEVERANCE PAYMENT
As severance payment for not realized income after the Termination Date, the
Employee shall receive, subject to the specified conditions, the following
amounts, due and payable as follows:
1. Cybernet shall pay the Employee 115.000 on the signing hereof.
2. If Telehouse Deutschland GmbH completes the sale and transfer agreement
under the option agreement as described in the Form 8-K filed by Cybernet with
the U.S. Securities and Exchange Commission on January 30, 2002, then within 15
days of closing, Cybernet will pay to the Employee 287,000.
3. Cybernet shall pay the Employee 115.000 on the Termination Date,
provided that the Employee was not terminated for cause.
The entire severance payment is subject to any applicable tax and social
security withholdings.
SEC. 5
STOCK OPTIONS
The Employee is only entitled to options to purchase 310.000 shares of common
stock of Cybernet as specified in EXHIBIT 1. For these options, the provisions
of the Cybernet 1998 Stock Incentive Plan shall continue to apply accordingly.
SEC. 6
TRANSFER OF ALL BUSINESS MATTERS
The Employee will transfer all business matters belonging to his sphere of
duties to the Board of Directors of Cybernet on or before the Termination Date.
SEC.7
RETURN OF COMPANY PROPERTY
The Employee shall return on or before the Termination Date, all property
belonging to Cybernet or its subsidiaries, including but not limited to company
car, cell phone, laptop, keys, documents and data, as well as all other company
items that contain or might reveal business secrets of Cybernet or its
subsidiaries. Furthermore, the Employee shall not make or retain any copies or
other duplicates of the above-mentioned documents and data.
SEC. 8
CONFIDENTIALITY
The Employee shall, following the termination of the Employment Agreement up to
an indefinite period of time, observe secrecy and confidentiality with regard to
all business and operational secrets of Cybernet and its subsidiaries.
SEC. 9
NON-SOLICITATION OF EMPLOYEES AND CUSTOMERS
Within two years after the Termination Date the Employee will not, directly or
indirectly, either individually or on behalf of any other person or entity (i)
solicit customers, suppliers, or other business relations of Cybernet or its
subsidiaries for the purpose of interfering with or encouraging them to
terminate their relationship with Cybernet or its subsidiaries, or (ii)
encourage other employees of Cybernet or its subsidiaries to terminate their
employment with Cybernet or its subsidiaries.
SEC. 10
SETTLEMENT OF ALL CLAIMS
By the consummation of this Agreement any and all claims of (i) the Employee
against Cybernet and its subsidiaries or (ii) Cybernet or its subsidiaries
against the Employee arising from or relating to the Employment Agreement shall
be finally settled except as provided (i) herein, (ii) in the Mutual Release as
of today entered into by and between Cybernet, the Employee and various other
parties, or (iii) in any other release and indemnity arrangement or settlement
agreement.
SEC. 11
MISCELLANEOUS
1. Should any provision of this Agreement or any provision to be
incorporated in future be or become invalid or unenforceable, the
validity of the balance of this Agreement shall not be affected thereby.
The same applies if this Agreement contains any omissions. In lieu of
the invalid or unenforceable provision or in order to complete any
omission, a fair provision shall apply
which to the extent legally permissible comes as close as possible to
what the parties hereto had intended or would have intended according
to the spirit and purpose of this Agreement if they had considered
the matter at the time this Agreement was executed. The same applies if
the provision is invalid because of the stipulated scope or time
period.
2. This Agreement shall be governed exclusively by German law and construed
in accordance with the laws of the Federal Republic of Germany.
3. The regional court of Munich, Germany, shall have exclusive jurisdiction
of any case or controversy arising under or in connection with this
Agreement.
4. Any amendment or supplement to this Agreement must be in writing.
---------------------------- ----------------------------
Employee Cybernet Internet Services
Xxxxxxx Xxxx International, Inc.
EXHIBIT 1 STOCK OPTION TABLE
[TABLE OMITTED]
SCHEDULE F
STIPULATED ORDER
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
IN RE CYBERNET INTERNET SERVICES )
INTERNATIONAL INC. ) C.A. No. 19252
STIPULATED ORDER
-----------------
WHEREAS, on January 24, 2002, Xxxxxx Xxxx, Ventegis Capital A.G., and MFC
Bancorp Ltd. (the "Intervenors") filed a Motion For A Contempt Order (the
"Motion") seeking the Court's entry of sanctions against Cybernet Internet
Services International Inc. ("Cybernet") and Xxxxxxx Xxxx ("Xxxx");
WHEREAS, Cybernet and Xxxx vigorously oppose the Motion;
WHEREAS, Cybernet, Xxxx and the Intervenors have agreed to resolve the
Issues raised in this action and by the Motion without further
litigation; and
WHEREAS, Intervenors have, as part of the resolution of the issues
raised in this action, agreed to withdraw the Motion For A Contempt Order and
have agreed not to refile the Motion;
IT IS HEREBY ORDERED THIS ----- day of March, 2002, that the Motion
For A Contempt Order filed by Intervenors on January 24, 2002 is
withdrawn with prejudice to Intervenors' right to refile such Motion against
Cybernet and Xxxx.
---------------------------------------
Chancellor
STIPULATION AS TO THE FORM OF ORDER
--------------------------------------- -----------------------------------
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxxx
Morris, James, Hitchens & Xxxxxxxx, LLP Xxxxxxxx, Xxxxxx & Finger, P.A.
000 Xxxxxxxx Xxxxxx One Xxxxxx Square
X.X. Xxx 0000 X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000 Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (000) 000-0000
Attorney for Intervenors Attorney for Cybernet Internet
Services International, Inc.
--------------------------------------
Xxxx X. Xxxxxxx
Wolf Block Xxxxxx and Xxxxx-Xxxxx LLP
One Xxxxxx Square
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
000-000-0000
Attorney for Petitioner Xxxxxxx Xxxx
SCHEDULE G
ESCROW AGREEMENT
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") made and entered into this 12th day
---------
of March, 2002 by and among Xxxxxx Xxxxxx, Attorney (the "Escrow Agent"),
------------
Cybernet Internet Services International, Inc. ("Cybernet"), and MFC Bancorp
--------
Ltd. ("MFC"), Xxxxxxx Xxxx ("Xxxx") and Paolo di Fraia ("di Fraia") all of whom
--- ---- --------
shall hereinafter be referred to as the "Parties," and with respect to Sections
-------
3(c), (d), (e) and (f) only, Xxxxxx Xxxxxx and Xxxxxx Xxxxxxxxxxxxx.
RECITALS
--------
A. The Parties entered into an Agreement dated even date hereof (the
"Settlement Agreement") wherein the Parties have agreed to settle various
--------------------
matters upon the term thereof. Capitalized terms used in this Agreement and not
specifically defined herein, shall have the meanings ascribed to them in the
Settlement Agreement.
B. Pursuant to the Settlement Agreement, Xxxx entered into the Xxxx
Amendment with Cybernet and di Fraia entered into the di Fraia Amendment with
Cybernet. Pursuant to the Xxxx Amendment, Cybernet is required to deposit in
escrow to the Escrow Agent an amount equal to Euro 115,000 (the "Xxxx Escrow
-----------
Funds"). Pursuant to the di Fraia Amendment, Cybernet is required to deposit in
-----
escrow to the Escrow Agent an amount equal to Euro 82,000 (the "di Fraia Escrow
---------------
Funds").
-----
C. Section 4.6 of the Settlement Agreement provides that in the event
any Claim is initiated against any Participating Director or di Fraia ("Covered
-------
Persons") under Cybernet's D&O Policy or the Extension on or prior to March 12,
-------
2003, Cybernet will be solely responsible for paying the deductible of such D&O
Policy or Extension. Section 4.6 of the Settlement Agreement also requires
Cybernet to deposit in escrow to the Escrow Agent an amount equal to the lesser
of: (i) 50% of the applicable deductible, or (ii) Euro 125,000 (the "Deductible
----------
Escrow Funds") to pay for the deductible, if any.
-------------
D. The Escrow Agent has agreed to act as escrow agent for the deposits,
and the Parties hereto enter into this Agreement for the purpose of holding and
disbursing the deposits in order to facilitate the consummation of the
transaction contemplated by the Settlement Agreement.
NOW, THEREFORE, incorporating the foregoing Recitals by reference herein,
the parties hereto, intending to be legally bound hereby, agree as follows:
1. Appointment of Escrow Agent. The Parties hereby appoint the Escrow
----------------------------
Agent to act as escrow agent under this Agreement, and the Escrow Agent accepts
such appointment, for the purpose of receiving and disbursing the deposits in
accordance with the terms and conditions set forth in this Agreement.
2. Deposit of Funds. On or before 5:00 AM (EST) March 12, 2002, MFC
------------------
shall deliver to Escrow Agent by money order or wire transfer for deposit a
total amount of Euro 322,000. If after the date of this Agreement, Cybernet and
Xxxx determine that 50% of the applicable deductible on the D&O Policy or
Extension is less than Euro 125,000, upon receipt of written notice from
Cybernet and Xxxx,
Escrow Agent shall promptly refund the difference to
Cybernet. The deposit shall be held in an interest-bearing money market account
(the "Escrow Account"). All amounts held in the Escrow Account and all interest
--------------
earned on such amounts are hereinafter referred to as the "Escrow Funds".
------------
3. Disbursement of Escrow Funds.
-------------------------------
(a) The Escrow Funds shall be disbursed in accordance with the terms of
this Agreement and the Settlement Agreement. Escrow Agent shall be entitled to
rely on the terms of such agreements in disbursing the Escrow Funds.
(b) Unless sooner delivered or as otherwise provided in this
subsection (b), on September 15, 2002, the Escrow Agent shall deliver: (1) the
Xxxx Escrow Funds with accrued interest to Xxxx; and (2) the di Fraia Escrow
Funds with accrued interest to di Fraia. In the event that, prior to September
15, 2002, the Escrow Agent receives a notice signed by Xxxx or di Fraia that his
respective employment with Cybernet has been terminated "without cause" (the
"Termination Notice"), the Escrow Agent shall immediately forward a copy of such
notice to Cybernet. If the Escrow Agent shall not have received a written
notice of objection from Cybernet within ten (10) days after the Escrow Agent
has mailed or delivered a copy of the Termination Notice to Cybernet, the Escrow
Agent shall deliver the Xxxx Escrow Funds to Xxxx or the di Fraia Escrow Funds
to di Fraia, as the case may be. If the Escrow Agent receives such an objection
notice from Cybernet, the Escrow Agent shall promptly forward a copy of such
notice to Xxxx or to di Fraia, as the case may be. If the Escrow Agent timely
receives such an objection notice as aforesaid, the Escrow Agent shall continue
to hold the Xxxx Escrow Funds or the di Fraia Escrow Funds, as the case may be,
until the Escrow Agent receives either: (x) a notice signed by both Cybernet and
either Xxxx or di Fraia, as the case may be, stating who is entitled to the Xxxx
Escrow Funds or the di Fraia Escrow Funds; or (y) a final order of a court of
competent jurisdiction directing disbursement in a specific manner, in either of
which events the Escrow Agent shall disburse the Xxxx Escrow Funds or the di
Fraia Escrow Funds, as the case may be, in accordance herewith or in accordance
with such notice or order. The Escrow Agent shall not be or become liable in
any way or to any person for its refusal to comply with any requests or demands
until and unless it has received a direction of the nature described in (x) or
(y) immediately above.
In the event that, prior to September 15, 2002, the Escrow Agent
receives a notice from Cybernet that the respective employment of Xxxx or di
Fraia with Cybernet has been terminated "for cause" (the "Cybernet Notice"), the
Escrow Agent shall immediately forward a copy of such notice to Xxxx or di
Fraia, as the case may be. If the Escrow Agent shall not have received a
written notice of objection from Xxxx or di Fraia, as the case may be, within
ten (10) days after the Escrow Agent has mailed or delivered a copy of the
Cybernet Notice to Xxxx or di Fraia, the Escrow Agent shall deliver the Xxxx
Escrow Funds or the di Fraia Escrow Funds, as the case may be, to Cybernet. If
the Escrow Agent receives such an objection notice from Xxxx or di Fraia, the
Escrow Agent shall promptly forward a copy of such notice to Cybernet. If the
Escrow Agent timely receives such an objection notice as aforesaid, the Escrow
Agent shall continue to hold the Xxxx Escrow Funds or the di Fraia Escrow Funds,
as the case may be, until the Escrow Agent receives either: (x) a notice signed
by both Cybernet and either Xxxx or di Fraia, as the case may be, stating who is
entitled to the Xxxx Escrow Funds or the di Fraia Escrow Funds; or (y) a final
order of a court of competent jurisdiction directing disbursement in
a specific manner, in either of which events the Escrow Agent shall
disburse the Xxxx Escrow Funds or the di Fraia Escrow Funds, as the case may
be, in accordance herewith or in accordance with such notice or order. The
Escrow Agent shall not be or become liable in any way or to any person for
its refusal to comply with any requests or demands until and unless it has
received a direction of the nature described in (x) or (y) immediately
above.
(c) If Escrow Agent receives a notice on or after the Deductible
Deadline (as defined in Section 4.6 of the Settlement Agreement) signed by
Cybernet that a Claim has not been initiated against a Covered Person prior to
the Deductible Deadline, the Escrow Agent shall forward a copy of such notice to
each Covered Person. If Escrow Agent shall not have received written notice of
objection from any Covered Person within ten (10) days after Escrow Agent has
mailed or delivered such notice to such Covered Person, Escrow Agent shall
deliver the Deductible Escrow Funds specified in the notice to Cybernet. If
Escrow Agent shall receive a timely written objection from a Covered Person,
Escrow Agent shall promptly forward a copy thereof to Cybernet.
(d) If Escrow Agent receives a notice signed by a Covered Person
that a Claim has been initiated against him prior to the Deductible Deadline and
a request from a Covered Person for payment of the applicable deductible, the
Escrow Agent shall forward a copy of such notice and request to Cybernet. If
Escrow Agent shall not have received written notice of objection from Cybernet
within ten (10) days after Escrow Agent has mailed or delivered such notice to
Cybernet, Escrow Agent shall deliver the Deductible Escrow Funds specified in
the notice to the Covered Person. If Escrow Agent shall receive a timely
written objection from Cybernet, Escrow Agent shall promptly forward a copy
thereof to the Covered Person.
(e) If Escrow Agent timely receives a notice of objection as
aforesaid, Escrow Agent shall continue to hold the Deductible Escrow Funds until
Escrow Agent receives either: (x) a notice signed by both Cybernet and the
Covered Person stating who is entitled to the Deductible Escrow Funds; or (y) a
final order of a court of competent jurisdiction directing disbursement in a
specific manner, in either of which events Escrow Agent shall disburse the
Deductible Escrow Funds in accordance herewith or in accordance with such notice
or order. Escrow Agent shall not be or become liable in any way or to any
person for its refusal to comply with any requests or demands until and unless
it has received a direction of the nature described in (x) or (y) above.
4. Construction of Instruments. In the absence of bad faith, gross
-----------------------------
negligence or willful default on its part, Escrow Agent may rely conclusively on
a notice of instruction that is furnished to Escrow Agent that conforms to the
requirements of this Agreement.
5. Substitution of Escrow Agent. The Escrow Agent may resign upon
-------------------------------
thirty (30) days' prior written notice to the Parties. In the event of such
resignation, a successor shall be appointed by mutual agreement of the Parties,
or if the Parties do not agree, then such successor shall be appointed by the
Escrow Agent; provided, however, that if no successor escrow agent is so
-------- -------
appointed and accepts such appointment within the sixty (60)-day period
following such notice of resignation, the Escrow Agent may deposit the Escrowed
Funds with any court it deems appropriate. Notwithstanding anything in this
Section 5 to the contrary, the Escrow Agent agrees to deliver the
Escrowed Funds to a successor Escrow Agent appointed pursuant to the provisions
of this Section 5 within ten (10) days of receiving written notice of the
identification and address of such successor Escrow Agent from the
Parties.
6. Compensation of Escrow Agent. For services hereunder, the Escrow
-------------------------------
Agent shall be paid a fee of Euro ________. The Escrow Agent's fee shall be
paid by Cybernet.
7. Notices. Any notice, request, demand, consent, instruction,
-------
approval, or other communication required or permitted under this Agreement will
be written and will be deemed to have been given (a) when personally delivered,
(b) when received by telecopy of electronic mail, (c) on the next following day
after it is delivered to any nationally recognized express delivery service; or
(d) on the third day after it is deposited in any depository regularly
maintained by governmental postal service, postage prepaid, certified or
registered mail, return receipt requested, at the following addresses (or at
such other address for a party as will be specified by like notice):
Cybernet: Cybernet Internet Services International, Inc.
--------
Xxxxxx-Xxxxxx-Xxxx 00-00
00000 Xxxxxx, Xxxxxxx
Attn.: Chief Executive Officer
MFC: MFC Bancorp Ltd.
---
Suite 1000
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Xxxxxx
Attn.: President
Escrow
Agent: Xxxxxx Xxxxxx
-----
Xxxxxxxxxx Xxxxxxx 00
00000 Xxxxxxxx
Xxxxxxx
Xxxx: c/o of Cybernet Internet Services
----
International, Inc.
Xxxxxx-Xxxxxx-Xxxx 00-00
00000 Xxxxxx, Xxxxxxx
di Fraia: c/o of Cybernet Internet Services
---------
International, Inc.
Xxxxxx-Xxxxxx-Xxxx 00-00
00000 Xxxxxx, Xxxxxxx
Xxxxxx Xxxxxx: Xxxxxxxxxx Xxxxxxx 00
--------------
00000 Xxxxxxxx
Xxxxxxx
Xxxxxx Xxxxxxxxxxxxx: 00000 Xxx Xxxxx
---------------------
Xxxxxxx, XX 00000
8. Governing Law. The terms and conditions of this Agreement shall be
--------------
construed pursuant to the laws of the State of Delaware, notwithstanding any
conflicts of law principles to the contrary.
9. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be considered an original. The signature by
any party on any one of the counterparts shall bind such party at such time as
each of the parties has signed and delivered to the other parties at least one
counterpart.
10. Binding Effect. The terms and conditions of this Agreement shall
---------------
be binding upon, and inure to the benefit of, the parties hereto, their
successors, legal representatives, heirs and assigns.
11. Amendments. No amendment, modification or waiver of any provision
----------
of this Agreement shall be effective unless in writing and signed by the party
against which enforcement is sought.
12. Severability. If any provision of this Agreement is held for any
------------
reason to be unenforceable, the remainder of this Agreement shall remain in full
force and effect.
13. Headings. The headings in this Agreement are intended solely for
--------
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
14. Waiver of Trial by Jury. Each party hereby knowingly, voluntarily
------------------------
and intentionally, upon consultation with its respective counsel, expressly and
mutually waives any right to trial by jury of any claim, demand, action or cause
of action arising under this Agreement.
15. Liability. The Escrow Agent shall not be liable for any mistake of
---------
fact or error of judgment or any acts or omissions of any kind unless caused by
its willful misconduct or gross negligence. The parties hereto each release the
Escrow Agent from an act done or omitted to be done by the Escrow Agent in good
faith in a performance of its obligations and duties hereunder.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, on the date
first above written.
CYBERNET:
---------
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
By: -----------------------------
Name:
Title:
MFC:
----
MFC BANCORP LTD.
By: -----------------------------
Name:
Title:
----------------------------------
Xxxxxxx Xxxx
----------------------------------
Paolo di Fraia
ESCROW AGENT:
--------------
----------------------------------
Xxxxxx Xxxxxx
With respect to Sections 3(c), (d), (e) and (f) only:
----------------------------------
Xxxxxx Xxxxxx
----------------------------------
Xxxxxx Xxxxxxxxxxxxx.
