Exhibit 10.7
Loan & Investment Agreement with Xxxxx Xxxxx.
LOAN AGREEMENT
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This loan agreement is made this 15th day of May 2002, by and among Xxxxx Xxxxx,
a Massachusetts resident (hereafter known as "LENDER"), and GSI TECHNOLOGIES
USA, a public company organized under the laws of Delaware and specializing in
Broadcast Technologies (hereinafter, known as "BORROWER"), 3529363 Canada, Inc.
a Canadian corporation and an affiliate of BORROWER ("GSI CANADA"), and Xxxxxx
xx Xxxxxxxx, an individual residing in Quebec, Canada ("GUARANTOR"). "LENDER"
AND "BORROWER" shall collectively be known herein as the "Parties." In
determining the rights and duties of the Parties under this Loan Agreement, the
entire document must be read as a whole.
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THE LENDER HAS AGREED TO LEND TO THE BORROWER THE SUM OF $330,000.00 USD (THE
"LOAN") UNDER THE FOLLOWING CONDITIONS:
1. The LENDER will send a wire transfer in the amount of US$330,000.00 on
Wednesday, May 15, 2002 to the following coordinates:
LAURENTIAN BANK OF CANADA
MONTREAL CANADA
ACCOUNT NAME: ME XXXX C'T
ACCOUNT NO: 00731-039-87039-5-01
BRANCH TEL NO: 000-000-0000
2. As consideration for the LOAN, GUARANTOR will transfer to the LENDER
2,000,000.00 of his registered (under the Securities Act of 1933, as
amended) and freely tradable shares of BORROWER. If LENDER is unable
to confirm that these shares are registered in his name and freely
tradable by him on or before May 24, 2002, then BORROWER shall
immediately refund this amount to LENDER.
3. GUARANTOR will deposit for the benefit of LENDER an additional
1,000,00 of his registered and freely tradable shares of BORROWER in
escrow with an escrow agent to be named by LENDER.
4. The BORROWER will repay to LENDER the sum of $330,000.00 USD by
certified check on the earlier to occur of (i) the date that GSI
Canada receives any portion of a tax credits receivable from the
Canadian government or (iii) July 15, 2002.
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5. GUARANTEE:
GSI Canada, of which the GUARANTOR is the president and majority
stockholder, hereby guaranties the payment and performance of this
LOAN and agrees to use its tax credit receivable guaranteed by
GARANTIE QUEBEC (see document attached) to repay this LOAN upon
request by LENDER. To the extent it is permissible to xxxxx x xxxx on
this receivable, GSI Canada hereby grants a perfected, first priority
lien on such receivable to LENDER to secure payment and performance of
the LOAN.
In addition, GUARANTOR hereby personally guaranties the payment and
performance of the LOAN, waiving all notices and defenses he might
otherwise have under the laws of Canada or the United States or
otherwise.
6. DEFAULT:
In the event that the BORROWER does not repay the Loan in full on or
before the due date, the 1,000,000 shares in escrow will be
immediately transferred to the LENDER free and clear of any liens and
encumbrances, with all transfer fees, stamp taxes, brokerage or
similar fees paid by BORROWER.
In addition, upon default interest shall accrue on any unpaid amount
at the rate of prime (as published in the Wall Street Journal) plus
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two percent (2%).
7. This agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
8. Both parties declare they have read all above mentioned points and are
satisfied with the conditions.
Signed as of the 15th day of May, 2002.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx xx Xxxxxxxx
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Xxxxx X. Xxxxx Xxxxxx xx Xxxxxxxx
GSI Technologies USA
2001, XxXxxx College, Suite 1310
Xxxxxxxx, Xxxxxx, X0X 0X0
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By: /s/ Xxxxxx xx Xxxxxxxx By : /s/ Xxxxxx xx Xxxxxxxx
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Xxxxxx xx Xxxxxxxx, personally Xxxxxx xx Xxxxxxxx
0000000 Xxxxxx, Inc.
0000, XxXxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx, X0X 0X0
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PROMISSORY NOTE
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$330,000.00 Boston, Massachusetts
May __, 2002
FOR VALUE RECEIVED, GSI Technologies USA, Inc., a Delaware corporation with
a principal place of business located at 0000 XxXxxx Xxxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxx, Xxxxxx H3A IG1 (the "Borrower") hereby promises to pay to the
order of Xxxxx X. Xxxxx, c/o Industrial Metal Products Co., Inc., 00 Xxxxxxxx
Xxxxxx, Xxxxxx, XX 00000, XXX (the "Lender"), on the earlier to occur of (i)
July 16, 2002 or (ii) the date certain tax refunds are paid to 3529363 Canada,
Inc., a Canadian corporation and affiliate of Borrower ("Due Date"), in lawful
money of the United States of America, the principal sum of Three Hundred and
Thirty Thousand and 00/100 Dollars ($330,000.00), and, upon an Event of Default,
together with interest thereon at a rate of ten percent (10%) per annum on all
amounts outstanding hereunder.
The Borrower and every endorser and guarantor of this Note, or the obligation
represented hereby, waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assents to any extension or postponement of
the time of payment or any other indulgence, and/or to the addition or release
of any other party or person primarily or secondarily liable.
In case of the death, dissolution, termination of existence, or business failure
of any of the parties to this Note (meaning thereby Borrower, endorsers, and
guarantors), appointment of a receiver of any part of the property of any of
them, levy on or attachment of any of the property of any of them, or assignment
for benefit of creditors by or commencement of any proceedings under the
Bankruptcy Code, or any insolvency law of any jurisdiction by or against any of
them, or if there shall be a transfer of all or substantially all of the stock
or assets of the undersigned, at the option of the Lender and without limiting
the Lender's rights, the entire unpaid principal amount of this Note, all of the
unpaid interest accrued hereon and all other sums owing hereunder shall become
immediately due and payable without notice or demand.
In addition, if an Event of Default, as defined below, shall occur, the entire
unpaid principal amount of this Note, all of the unpaid interest accrued hereon
and all other sums owing hereunder shall become immediately due and payable
without notice or demand. Each of the following shall constitute an Event of
Default hereunder:
1. Failure of the Borrower (or any endorser or guarantor) to pay on the Due
Date or upon receipt of notice any sum due and owing to the Lender
hereunder, whether principal, interest or otherwise.
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2. Failure of the Borrower (or any endorser or guarantor) to comply with any
of his or its covenants or agreements contained herein or within the any
agreements by and between the Lender and Borrower (or any endorser or
guarantor).
3. Any material representation made to the Lender by or on behalf of the
Borrower (or any endorser or guarantor) shall prove to have been false,
inaccurate or incomplete in any material respect when made.
All notices and other communications hereunder shall be in writing and shall be
deemed given: (1) upon receipt if delivered personally (unless subject to clause
(2)) or if mailed by registered or certified mail, return receipt requested; or
(2) at noon on the business day after dispatch if sent by a nationally
recognized overnight courier, in any case to the parties at the address set
forth at the beginning of this Note.
Each party now or hereafter liable under this Note or under any instrument
executed in connection herewith shall pay all costs and expenses of collection
or enforcement, including reasonable attorneys' fees, incurred or paid by the
Lender in enforcing any of the obligations of this Note.
The Lender shall not, by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies hereunder unless such waiver shall be in
writing and signed by the Lender. A waiver on any one occasion shall not be
construed as a bar to or waiver of any such right or remedy on any future
occasion.
The word "Lender" as used herein shall refer to the named payee and all
assignees, successors, endorsees or transferees of said payee. The undersigned
may prepay this Note in whole or in part at any time and from time to time,
without penalty.
No modification, rescission, waiver, forbearance, release or amendment of any
provision of this Note shall be made, except by a written agreement duly
executed by the undersigned and the Lender.
This Note and all rights and obligations hereunder, including matters of
construction, validity and performance, shall be governed by the laws of the
Commonwealth of Massachusetts.
Executed as a document under seal as of the day and year first above
written.
WITNESS: GSI TECHNOLOGIES USA, INC.
______________________ By: /s/ Xxxxxx xx Xxxxxxxx
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Name: J. Xxxxxx Xx Xxxxxxxx
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Title: Power of Attorney
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SOPHISTICATED PRIVATE PLACEMENT
AGREEMENT
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BETWEEN:
GSI TECHNOLOGIES USA INC., a publicly traded corporation registered under
Delaware State Law, specializing in Digital Media Logistics and having its
principal business place at 000, Xx-Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx,
Xxxxxx, X0X 0X0.
HEREAFTER KNOWN AS GSI
AND:
XX. XXXXX X. XXXXX, a businessman and Massachusetts resident at 00, Xxxxxxxx
Xxxxx, Xxxxxxx, XX, 00000, XXX.
HEREAFTER KNOWN AS XX. XXXXX
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WHEREAS, for financing purposes, GSI is offering shares of its Corporation for
received value.
WHEREAS, Xx. Xxxxx, a private investor, intends to purchase shares of GSI
TECHNOLOGIES USA INC.
BOTH PARTIES AGREE ON THE FOLLOWING:
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WHEREAS, GSI has offered Xx. Xxxxx to purchase two (2) Million shares at $0.25
USD selling value
WHEREAS, GSI has bona fide the offer with a total of 1,016,000 warrants as
follow:
- 500,000 warrants at exercisable price of $0.25 USD
- 516,000 warrants at exercisable price of $1.00 USD
- These warrants will have a 36 months expiration date from date of
issuance
IN RETURN MR. XXXXX XXXXX WILL:
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- Transfer the sum of $165,000.00 USD to GSI Technologies USA's banking
account.
- Convert the $330,000.00 USD debt and the $21,000.00 USD representing
the interest to date on this debt, as described and agreed in the loan
agreement signed on May 15, 2002, into equity in return of the above
considerations.
- Accept that this agreement will supersede and terminate the loan
agreement dated May 15, 2002 including the following documents; the
Loan Agreement, the Promissory Note, Xxxxxx xx Xxxxxxxx'x personal
guarantee and GSI Canada's guarantee.
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Upon signature of this agreement, GSI's Board of Directors will give
instructions to the Transfer Agent, Xx. Xxx Xxxxxxxxxxx to issue two (2) Million
shares and 1,016,000 warrants at the above mentioned prices.
Upon signature of this agreement, Mr. Xxxxx Xxxxx will transfer the sum of
$165,000.00 USD to the coordinates attached in addendum I.
This agreement is governed under the laws the state of Delaware.
BOTH PARTIES DECLARE THAT THEY HAVE READ AND AGREED ON ALL THE ABOVE MENTIONED
ITEMS.
Signed this ----- day of May 2003.
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Xxxxx Xxxxx Xxxxx El-Xxxxx Xxx
Secretary of the Board
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