EXHIBIT 10.8.8
DIRECTOR LOAN AGREEMENT
THIS AGREEMENT made as of the 12th day of February, 1998, by and between
XXXXXX XXXXXXXXX, of Boca Raton, Florida ("Lender"), and AMERICAN CARD
TECHNOLOGY, INC., a Delaware corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Company is this day closing on the sale of units of notes (the
"Bridge Notes") and securities in the Company offered pursuant to a Confidential
Private Placement Memorandum dated February 3, 1998 (the "Private Placement");
and
WHEREAS, in connection with the Private Placement, and as a condition to
the closing thereof, Lender has agreed to make available to the Company on an
unconditional basis loans to the Company in the original principal amount of
Four Hundred Fifty Thousand and 00/100 Dollars ($450,000.00) (the "Loans") to be
used at the Company's discretion for working capital and certain expenses to be
incurred in connection with an anticipated initial public offering of the
Company's securities;
WHEREAS, in partial consideration for making the Loans, Lender is being
tendered 12,500 shares of common stock, par value $.001 per share, in the
Company (the "Common Stock") to be transferred by Lilly Beter Capital Group.
Ltd., a consultant to the Company, and to grant to Lender a warrant to purchase
12,500 shares of Common Stock at an exercise price of 80% of the per share
market value of the Common Stock on the date of exercise.
NOW, THEREFORE, in consideration of the foregoing and in further
consideration of the mutual covenants herein contained, the parties hereto agree
as follows:
1. REPRESENTATIONS AND WARRANTIES. the Company represents and warrants
to Lender that:
(a) the Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with all the requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted and is duly qualified and in good
standing in every jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
necessary;
(b) The execution and delivery of this Agreement and each and every
other agreement, instrument or document required to be executed and delivered to
Lender by the Company pursuant to the terms hereof, have been duly authorized,
are each valid, legal and binding upon it and enforceable in accordance with
their respective terms;
(c) The execution and delivery of this Agreement and each and every
other agreement, instrument or document required to be executed and delivered to
Lender by the Company pursuant to the terms hereof, the consummation of the
transactions herein contemplated, the fulfillment of or compliance with the
terms and provisions hereof and of each and every other instrument, agreement or
document required to be executed and delivered to Lender by the Company pursuant
to the terms hereof, are within its
powers, are not in contravention of any
provisions of its certificate of incorporation or any amendments thereto, or of
its by-Laws.
2. AMOUNT AND TERMS OF LOANS. Pursuant to the terms of this Agreement,
Lender shall make Loans to the Company, upon its request and within three (3)
business days of such request, which in the aggregate do not exceed Four Hundred
Fifty Thousand and 00/100 Dollars ($450,000.00). The Loans and each of them
shall be made upon the following terms and conditions:
(a) The maximum aggregate principal amount of the Loans shall be in
the amount of Four Hundred Fifty Thousand and 00/100 Dollars ($450,000.00), and
shall be evidenced by a promissory grid note (the "Note") with appropriate
insertions of names, dates and amounts. The Loans shall bear interest at a rate
per annum equal to ten percent (10.00%). Interest shall be charged on the
principal balance from time to time outstanding on the basis of the actual
number of days elapsed computed on the basis of a three hundred sixty (360) day
year. Interest shall be due and payable, in arrears on the Maturity Date (as
hereinafter defined);
(b) The Loans made by Lender to the Company pursuant to this
Paragraph 2 shall be recorded in an account on the books of Lender bearing the
Company's name (the "Company's Account"). There shall also be recorded in the
Company's Account all payments made by the Company on the Loans and interest
accrued thereon.
(c) The outstanding principal amount owed hereunder, together with
all accrued but unpaid interest thereon, shall be due and payable in full on the
earlier of (i) the closing of an initial public offering of the Company's
securities and (ii) March 3, 2002 (the "Maturity Date");
(d) Maker shall have the right to prepay the outstanding principal
amount of this Note, in whole or in part at any time.
(e) The provisions of this Paragraph 2 shall continue in effect until
the Maturity Date, PROVIDED, HOWEVER, that Lender's obligations to advance Loans
to the Company pursuant to the provisions of this Paragraph 2 shall cease upon
the occurrence of an Event of Default (as defined in Paragraph 3 hereof) until
such time as said Event of Default is cured.
3. DEFAULT PROVISIONS. Any one or more of the following shall constitute
an Event of Default under this Agreement and the Note:
(a) the institution of any bankruptcy proceedings against the Company
and a failure to have such proceedings dismissed within a period of sixty (60)
days;
(b) the institution of any voluntary bankruptcy proceedings by the
Company;
(c) the Company ceases to do business; or
(d) the Company dissolves or otherwise terminates its corporate
existence.
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4. GENERAL PROVISIONS.
(a) This Agreement shall survive until the Loans have been paid in
full;
(b) This Agreement is an integrated document and all terms and
provisions are embodied herein and shall not be varied by parol;
(c) It is the specific desire and intention of the parties that it
shall in all respects be construed under the laws of the State of Georgia;
(d) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, provided,
however, that the Company shall not assign, voluntarily, by operation of law or
otherwise, any of its rights hereunder without the prior written consent of
Lender and any such attempted assignment without such consent shall be null and
void.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals, and to a duplicate instrument of the same tenor, the day and year first
above written.
SIGNED, SEALED, AND DELIVERED
IN THE PRESENCE OF: AMERICAN CARD TECHNOLOGY, INC.
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By /s/ Xxxxxxxx X. Perl
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---------------------------- Its Chief Executive Officer
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/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX
000 XXXX XXXXXX XXXXX
XXXX XXXXX, XXXXXXX 00000
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February 12, 1998
Xxxx & Xxxxxxxx P.C.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Re: American Card Technology, Inc. (the "Company")
Attention: Xxxxxxx X. Xxxx, Xx., Esq.
Ladies and Gentlemen:
The undersigned is simultaneously with the execution of this letter
entering into (i) a Letter Agreement dated as of the date hereof by and
between the undersigned and the Company (the "Letter Agreement") whereby the
undersigned is lending funds to the Company as a Closing Loan, as defined in
the Letter Agreement, and (ii) a Director Loan Agreement dated as of the date
hereof by and between the undersigned and the Company (the "Loan Agreement")
whereby the undersigned shall make loans (the "Director Loans") to the
Company. In connection with the Closing Loan, the undersigned has wired
$400,000.00 into an escrow account for the benefit of the Company.
The undersigned hereby authorizes Xxxx & Xxxxxxxx P.C., as Escrow Agent, to
complete the Letter Agreement by filling in the dollar amount of the Closing
Loan in an amount not to exceed $400,000.00. The undersigned further authorizes
Xxxx & Xxxxxxxx P.C. to release to the Company from escrow the amount necessary
to fund the undersigned's Closing Loan in such amount to the Company.
Furthermore, the undersigned hereby authorizes Xxxx & Xxxxxxxx P.C. to
release to the Company the difference between $400,000.00 and such Closing Loan
amount as an advance to the Company pursuant to the Loan Agreement, which amount
shall be treated as a Director Loan.
Very truly yours,
Xxxxxx Xxxxxxxxx
April 23, 1998
Page 2
DIRECTOR LOAN PROMISSORY GRID NOTE
$450,000.00 NEW YORK, NEW YORK FEBRUARY 12, 1998
FOR VALUE RECEIVED, AMERICAN CARD TECHNOLOGY, INC., a Delaware
corporation ("Maker"), promises to pay to the order of XXXXXX XXXXXXXXX
("Holder"), at such place as may be designated in writing from time to time
by Holder, the maximum aggregate principal sum of up to Four Hundred Fifty
Thousand and 00/100 Dollars ($450,000.00), or such lesser amount as may from
time to time be outstanding under this Note, together with interest accruing
on the unpaid balance of this Note, before or after demand or judgment, at a
fixed rate per annum equal to ten percent (10.00%). Interest shall be charged
on the principal balance from time to time outstanding on the basis of the
actual number of days elapsed computed on the basis of a three hundred sixty
(360) day year. Interest shall be due and payable in arrears on the Maturity
Date, as hereinafter defined.
The outstanding principal amount, together with interest accrued
thereon, shall be due and payable in full on the earlier of (i) the closing
of an initial public offering of the Company's securities and (ii) March 3,
2002 (the "Maturity Date"). The principal amount of this Note shall be
advanced by Holder upon request of Maker and within three (3) business days
of such request. Advances and payments under this Note shall be evidenced by
a ledger maintained by Holder and attached hereto which shall set forth,
among other things, the principal amount of any advances and payments
therefor.
This Note is subject in all respects to the terrns and conditions of
that certain Director Loan Agreement dated this date between Maker and
Holder, including, without limitation, Events of Default, repayment terms and
the termin ion date set forth therein
Maker hereof further promises to pay, in addition to said principal sum
and interest, all taxes assessed upon this Note, and all reasonable costs and
expenses, including, without limitation, attorneys' fees, incurred in the
collection of this Note.
Maker shall have the right to prepay the principal amount of this Note
and interest accrued thereon in whole or in part at any time. Any partial
prepayments shall be applied first to accrued and unpaid interest and second
to the principal outstanding under this Note.
Maker waives diligence, demand, presentment for payment, notice of
nonpayment, protest and notice of protest, and notice of any renewals or
extensions of this Note, and all rights under any statute of limitations, and
agrees that the time for payment of this Note may be extended at Holder's
sole discretion, without impairing Maker's liability thereon.
This Note shall be governed by and construed in accordance with the laws
of the State of Georgia.
AMERICAN CARD TECHNOLOGY, INC.
By /s/ Xxxxxxxx X. Perl
--------------------------------
Xxxxxxxx 0. Perl
Its' Chief Executive Officer
ALLONGE ENDORSEMENT TO PROMISSORY NOTE
DATED APRIL 30, 1998
IN THE ORIGINAL PRINCIPAL AMOUNT OF $450,000.00
MADE BY AMERICAN CARD TECHNOLOGY, INC.
TO THE ORDER OF
XXXXXX XXXXXXXXX
Allonge annexed to and made a part of that certain Director Loan
Promissory Grid Note (the "Note") in the original principal amount of Four
Hundred Fifty Thousand and 00/100 Dollars ($450,000.00) dated February 12, 1998
made by American Card Technology, Inc. ("Maker") in favor of Xxxxxx Xxxxxxxxx
("Holder").
Holder and Maker hereby agree that the Maturity Date of the Note is
amended to the earlier of (i) the closing of debt financing negotiated by Lilly
Beter Capital Group subsequent to the closing of the Maker's initial public
offering or (ii) January 1, 2001.
All other provisions of said Note, except those amended hereby, shall
remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the undersigned has caused this Allonge to be executed
as of the 30th day of April, 1998.
AMERICAN CARD TECHNOLOGY, INC.
By: /s/ Xxxxxxx Xxxxxxx, Xx.
--------------------------------
Its President
HOLDER:
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
