EXHIBIT 10.2
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) and
Schedule 7.1(n), 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
-------------
Xxxxxx-Xxxxxx-Ring 19-23 CYBERNET INTERNET SERVICES
81929 INTERNATIONAL, INC.
Munich, Germany
Per: /s/ Xxxxxxx Xxxx
----------------------------
Authorized Signing Officer
Tel: 00 (00) 0 00 00 000 Per: /s/ Paola di Fraia
----------------------------
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: /s/ Xxxxxxx Xxxxxxx
---------------------------
Authorized Signing Officer
Tel: (000) 000-0000 Per: /s/ Xxxxxx Xxxxxxxx
----------------------------
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: /s/ Xxx Xxxxxxx
----------------------------
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:
(d) The date of the Advance, being a Banking Day, is *;
(e) The aggregate amount of the Advance is *; and
(f) 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.
