EXHIBIT 10.1
INSTAR HOLDINGS INC
R.R.E. COMMERCIAL CENTRE
MAJURO
XXXXXXXX ISLANDS
To: Capital Media (UK) Limited
00 Xxxxx Xxxxxx
Xxxxxx X0X 0XX 31 October 1996
Dear Sirs,
This letter sets out the terms and conditions on which we (the
"Lender") are prepared to offer to you (the "Borrower") a cash
advance facility (the "Facility") in an amount of up to US$2,000,000
dollars:
OPERATIVE PROVISIONS
1 DEFINITIONS AND INTERPRETATION
1.1 In this letter (including the Introduction) unless the context
otherwise requires, the following expressions bear the meanings
shown:
Advance an advance made or to be made under the
Facility as referred to in Clause 5
Advance Date the date of the making of the first
Advance as specified in the Notice of
Drawdown which must be a Business Day
agreed form in relation to any agreement or
document, the form agreed between the
parties to the Facility Letter and
initialled by the Borrower and the Lender
by way of identification only
the Assignment the assignment in the agreed form of the
right, title, benefit and interest of the
Borrower in favour of the Lender in or
under an agreement dated 25 September 1995
made between PTT Telecom BV (1) and the
Borrower (2) whereby PTT Telecom BV agreed
to lease to the Borrower transponder
capacity
Business Day a day (other than Saturday or Sunday)
on which banks are generally open for
business of the kind contemplated by this
Facility Letter in London and New York
Consents all approvals, authorisations, consents,
licences, permissions and registrations
which it is necessary or advisable to
obtain from any governmental local public
or other authority or without limitation
any third party for the purpose of or
relating to this Facility and/or any
Security Document
the Debenture the debenture in the agreed form creating
fixed and floating charges over the
Borrower's assets and undertaking in favour
of the Lender
Dollars or $ the currency for the time being of the
United States of America
Event of Default any of those events or circumstances
specified in Clause 15
Facility Amount the maximum principal amount of the
Advances which may be advanced under the
Facility
Facility Letter the agreement constituted by this letter
and your acceptance
the Guarantee the joint and several guarantee in the
agreed form to be given by the Guarantors
in favour of the Lender as security for the
obligations of the Borrower under the
Facility Letter
Guarantors Onyx GmbH of and Capital Media Group
Limited of each a Guarantor and together
the Guarantors
Interest Period each period for the calculation of
interest determined in accordance with
Clause 8.1
Loan the principal amount for the time being
outstanding under this Facility together
with interest accrued and compounded under
the terms of this Facility Letter
Notice of Drawdown the notice substantially in the
form appearing in Schedule 1 to this
Facility Letter by which the Borrower
requests the Advance
Repayment Date the earlier of 31 December 1996 or the
date (after the date of this Facility
Letter) on which Capital Media Group
Limited makes a private placement of its
shares or issues loan notes or securities
of any kind whatsoever or raises funds in
the opinion of the Lender from any other
source whatsoever in an amount equal to or
greater than the amount outstanding under
this Facility Letter at such date
Security Documents each of:
(i) the Assignment;
(ii) the Debenture;
(iii) the Guarantee and
(iv) all other security documents
required by the Lender to be
executed by the Borrower
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and the Guarantors as at the
Advance Date
1.2 Clause headings are for ease of reference only.
1.3 References to clauses are to clauses of this Facility Letter.
1.4 The singular shall include the plural and vice versa and any of the
genders shall include the other two.
1.5 Any reference to a person shall include a company, corporation,
partnership or unincorporated association.
1.6 References to a party shall include its successors in title,
transferees and assigns.
1.7 References to any statute shall include any statutory modification,
extension or re-enactment of it or any part of it for the time being
in force and shall also include all instruments and regulations
deriving validity from that statute.
1.8 References to this or any other deed, agreement or document shall be
to this Facility Letter or, as the case may be, such other deed,
agreement or document as the same may have been or may be from time
to time amended, varied, altered, modified, supplemented or novated.
2 AMOUNT AND PURPOSE OF THE FACILITY
2.1 The Facility Amount shall not exceed US$2,000,000
2.2 The purpose for which the Advance shall be utilised is for the
Borrower's general working capital requirements and to on-lend monies
to the Borrower's subsidiary Onyx GmbH.
3 CONDITIONS PRECEDENT
3.1 The Facility shall only be made available to the Borrower when the
Lender has received in form and substance satisfactory to the Lender
the documents items and evidence specified in Schedule 2 and is
satisfied that Schedule 2(g) is fulfilled to this Facility Letter
prior to the date of each Advance (or the Lender having waived any
one or more of them in its absolute discretion and subject to any
condition(s) it may think fit).
3.2 The Lender's obligation to make the Advances is also conditional upon
no Event of Default occuring and the Borrower being in compliance at
the relevant time of such Advance with the terms and conditions of,
and there being no breach of or default under, this Facility Letter
or any of the Security Documents or the occurrence of any of the
events under Clause 15.
4 AVAILABILITY
4.1 Subject to the terms of this Facility Letter, the Facility shall be
available to the Borrower for drawdown in Dollars only in two
Advances.
4.2 Any amount of the Loan repaid or prepaid shall not be eligible for
reborrowing.
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5 DRAWDOWN
5.1 The Notice of Drawdown requesting an Advance must be received by the
Lender no later than 10.00 a.m. (London time) three Business Days
before the Business Day on which such Advance is required. The Notice
of Drawdown must specify:
(a) the amount required, which shall not exceed US$1,000,000;
(b) the date on which the Advance is required, which must be
a Business Day:
(i) prior to the 31 October 1996 in the case of
the first Advance and;
(ii) after the 15 November 1996 in the case of the
second Advance;
(c) the name and address of the bank and the title and number
of the account to which the Advance is to be remitted.
5.2 No notice requesting the Advance may be given before the conditions
in Clause 3 have been fulfilled to the Lender's satisfaction.
6 INTEREST
6.1 Subject to Clause 7, the rate of interest applicable to the Loan
during each Interest Period shall be 2% per annum above the base rate
quoted by Lloyds Bank PLC from time to time.
6.2 Interest will accrue daily in arrears on the basis of a year of 360
days and be compounded on the last day of each Interest Period so
that such interest shall itself form part of the Loan at such time
and bear interest pursuant to the terms of this Facility.
6.3 Any certificate or determination by the Lender as to any rate of
interest payable in respect of this Facility shall (save for manifest
error) be conclusive.
7 INTEREST ON UNPAID AMOUNTS
7.1 If the Borrower fails at any time to make any payment on the due
date, the period between the due date and the date on which such
unpaid sum is paid in full shall be divided into successive periods
of such duration as the Lender may from time to time select, and the
Borrower shall pay interest on each such unpaid sum for each such
period (as well after as before judgement), such interest accruing
daily on the basis of a year of 360 days and the number of days
elapsed for so long as it remains outstanding at the rate of 4% per
annum above the base rate quoted by Lloyds Bank PLC from time to
time.
7.2 Any determination by the Lender of the rate of interest of any of
such cost, increased cost or liability shall be conclusive and
binding on the Borrower unless manifestly incorrect.
8 INTEREST PERIODS
8.1 The first Interest Period shall commence on the Advance Date and each
subsequent Interest Period shall commence immediately on the expiry
of the preceding Interest Period. The length of each Interest Period
shall be one month. Provided that no Interest Period shall extend
beyond the Repayment Date.
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8.2 Notwithstanding the provisions of Clause 8.1,
(a) if any Interest Period ends on a day which is
not a Business Day, it shall end on the next following
Business Day, unless such next following Business Day
falls in the following calendar month in which case it
shall end on the immediately preceding Business Day; and
(b) any Interest Period which commences on the last
Business Day of a calendar month, and any Interest Period
which commences on the day on which there is no
numerically corresponding day in the calendar month during
which that Interest Period is to expire, shall end on the
last Business Day in the relevant later calendar month
during which that Interest Period is to expire.
8.3 The final Interest Period relative to the Loan shall end on the date
of its final repayment.
9 REPAYMENT
The Borrower shall repay the Loan and all unpaid interest fees and
other sums payable under this Facility Letter on the Repayment Date
unless there shall occur an Event of Default in which case, all such
amounts shall be repayable on demand.
10 PREPAYMENT
10.1 The Loan may be prepaid without premium or penalty in whole or part
(but if in part in integral multiplier of US$50,000) at any time
without notice to the Lender. Such prepayment shall be made together
with accrued interest on the amount prepaid.
10.2 The Borrower may not reborrow any amount which has been repaid, nor
make any prepayment except in accordance with this Clause.
11 FEES AND EXPENSES
11.1 The Borrower will pay to the Lender on demand all expenses (including
legal and out-of-pocket expenses and together with Value Added Tax if
any thereon) on a full indemnity basis reasonably and properly
incurred by the Lender in connection with the negotiation,
preparation and execution of this Facility Letter and the Security
Documents, the fulfilment of all conditions of this Facility, any
amendment or extension of and the granting of any waiver or consent
under the discharge of this Facility Letter and/or any Security
Document and/or in contemplation of or otherwise in connection with
the enforcement of or preservation of any rights under this Facility
Letter and/or any Security Document or otherwise in respect of any
moneys owing under or in respect of this Facility.
11.2 The Borrower will pay all stamp documentary registration and other
similar duties (including any payable by the Lender) in connection
with this Facility Letter and/or any Security Document.
11.3 The Lender may effect payment of all fees expenses and other sums due
and payable by the Borrower under this Clause 11 of and by deduction
from the Advance.
12 PAYMENTS
12.1 All payments to be made by the Borrower under this Facility Letter
shall be made in same day funds settled through the New York Clearing
House System or such other funds as may for the time being be
customary for settlement in New York City of
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international payments in Dollars to such account as the Lender may
from time to time instruct the Borrower.
12.2 The Borrower will make all payments under this Facility without
set-off or counterclaim and free and clear of any withholding or
deduction (save as required by law). If the Borrower is obliged by
law to make any such withholding or deduction, the Borrower will pay
to the Lender in the same manner and at the same time additional
amounts to ensure that the Lender receives a net amount equal to the
full amount which the Lender would have received if no such deduction
or withholding had been required. The Borrower shall deliver to the
Lender a certificate of deduction and on demand any evidence
satisfactory to the Lender that any amount withheld or deducted has
been paid to the proper authority.
13 REPRESENTATIONS AND WARRANTIES
13.1 The Borrower represents warrants and undertakes to the Lender, on the
date of its acceptance of this Facility Letter and on each date that
the Loan is available or outstanding (with reference to the facts and
circumstances then existing), as follows:
(a) the Borrower is duly incorporated and validly existing
under English law and has power to carry on its business
as now carried on, to own all of its assets and borrow
this Facility;
(b) the Guarantors are duly incorporated and validly
existing under German law and State of Nevada law of the
United States respectively and have power to carry on
their business as now carried on, to own all of their
assets and to carry out all actions contemplated by this
Facility;
(c) this Facility Letter and the Security Documents
(i) constitute the Borrower's and the Guarantor's legal
valid and binding obligations in accordance with their
respective terms (ii) have been duly authorised and
executed by the Borrower and the Guarantor and (iii) do
not and will not materially breach the Borrower's
memorandum and articles of association or the Guarantor's
corporate documentation or any agreement or obligation by
which the Borrower or Guarantor is bound or violate any
applicable law;
(d) the Borrower's obligations under this Facility
Letter are unconditional and unsubordinated obligations
and rank at least pari passu with all other of the
Borrower's unsecured and unsubordinated indebtedness;
(e) there are no pending or to the Borrower's
knowledge (after due and careful enquiry) threatened
actions, arbitrations or legal proceedings affecting the
Borrower or Guarantor or any of its assets which may have
a material adverse effect on the Borrower's or Guarantor's
business, assets or financial condition;
(f) the Borrower or Guarantor is not failing to pay or in
default under any agreement or obligation relating to
(or analogous to) financial indebtedness;
(g) no event or circumstance referred to in Clause 15 has
occurred;
(h) all written information supplied by [ _______________ ]
to the Lender in contemplation of this
Facility was true in all material respects as at its date
no change has occurred since the date of the information
already supplied which renders it materially untrue or
materially misleading and all
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projections and statements of belief and opinion given by
the Borrower to the Lender were made in good faith after
due and careful enquiry;
14 UNDERTAKINGS
So long as the Loan is available or outstanding:
(a) the Borrower will not without the Lender's prior
written consent (which may in the Lender's absolute
discretion be given or withheld or given subject to any
condition or conditions):
(i) except as contemplated by this Facility Letter
or in favour of Universal Independent Holdings
Limited pursuant to the arrangements in respect
of the lease of a transponder from PTT Telecom
BV create or extend or permit to subsist any
encumbrance (being any mortgage, charge,
pledge, lien, assignment, security interest,
title retention arrangement or other
encumbrance) over all or any part of the
Borrower's present or future undertaking assets
rights or revenues save arising by operation of
law and not as a result of any default or
omission on the part of the Borrower;
(ii) make any loan or give any credit to any person
other than normal trade credit;
(iii) except under this Facility or in favour of
Universal Independent Holdings Limited pursuant
to the arrangements in respect of the lease of
a transponder from PTT Telecom BV borrow or
raise any money or incur credit or given any
guarantee indemnities or other assurances
against financial loss;
(iv) sell transfer lend or otherwise dispose of all
or any part of the Borrower's present or future
undertaking assets rights or revenues (whether
by one or series of transactions related or
not) except in the case of assets sold at not
less than market value in the ordinary course
of business as now conducted
(b) the Borrower will obtain maintain in force and comply
with all Consents;
(c) the Borrower will provide to the Lender such financial and
other information as the Lender may from time to time
reasonably request;
(d) upon becoming aware thereof the Borrower will promptly
inform the Lender of any event or circumstance referred to
in Clause 15 and of anything of which the Borrower becomes
aware which, with the giving of notice or lapse of time or
otherwise, might result in any such event or circumstance;
(e) the Borrower shall if requested by the Lender procure that
Onyx GmbH executes a charge over all its rights interests
and assets of whatever kind whatsoever (or such other form
of security as is necessary under German Law to create
equivalent security) in a form satisfactory to the Lender
as security for such amounts (including all costs and
expenses) outstanding under this Facility Letter and the
Security Documents (at the date of creation of such
change) from the Borrower to the Lender and comply with
such corporate and other requirements necessary under
applicable local law to ensure that such charge is legal
valid and binding.
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15 EVENTS OF DEFAULT
15.1 If:
(a) default is made in the payment on the due date of any
amount payable under the Facility and such payment is not
made on the earlier of the Repayment Date or within 14
days from the occurrence of such default;
(b) the Borrower fails to perform or observe any other
obligations under this Facility Letter or any of the
Security Documents and such failure is not remedied within
14 days of occurrence;
(c) the Borrower admits in writing its inability to pay or
shall become unable to pay its debts generally as they
fall due or is deemed unable to pay its debts (within the
meaning of section 123 of the Insolvency Act 1986), or
becomes bankrupt or insolvent, or files any petition or
action for relief under any bankruptcy, reorganisation,
insolvency or moratorium law ;
(d) an application is made, a petition is presented by any
person to any court or any other steps are taken (formal
or informal) for an administration order to be made in
respect of the Borrower;
(e) any petition is presented by any person or any order is
made by any court or any meeting is convened for the
purpose of considering a resolution or any resolution is
passed for the Borrower's winding-up liquidation or
dissolution;
(f) a receiver or administrative receiver or manager is
appointed of or in relation to the Borrower or the whole
or any part of the Borrower's undertaking assets rights or
revenues or the Borrower's directors request any person to
make any such appointment;
(g) an encumbrancer takes possession of or a distress,
execution, sequestration or process is levied on or
enforced against the whole or any part of the Borrower's
assets rights or revenues;
(h) the Borrower ceases or threatens to cease to carry on the
whole or a substantial part of its business or stops or
suspends payment of its debts or proposes to enter into
any composition scheme compromise or arrangement with or
for the benefit of its creditors generally or any class of
them or all or any part of its assets are seized or
appropriated by or on behalf of any governmental or other
authority or are compulsorily acquired;
(i) any of the Borrower's financial obligations (whether
actual or contingent) become prematurely payable or any
creditor in respect thereof becomes entitled to declare
any such obligation prematurely payable or any such
obligation is not paid when due or any security therefor
becomes enforceable;
(j) any governmental or other consent or exemption required to
enable the Borrower to perform its obligations under this
Facility Letter is withdrawn or modified or it becomes for
any reason unlawful for the Borrower to perform any of
those obligations;
(k) any representation or warranty made by the Borrower to the
Lender in or pursuant to this Facility Letter shall prove
to have been incorrect in any material respect when made
(or deemed made) or, if repeated at any time in
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the future by reference to the facts subsisting at such
time, would no longer be true and correct in all material
respects;
(l) any of the Security Documents is not or ceases to be for
any reason a valid enforceable and continuing security in
any respect;
(m) the security created by or pursuant to any of the Security
Documents is, in the opinion of the Lender, likely to be
adversely affected or such security loses the priority
intended to be created by them;
(n) there occurs any event or series of events whether related
or not (including, without limitation, any material
adverse change in the business, assets or financial
condition of the Borrower) which will have the effect on
the the Borrower of not being able to comply with all or
any of its obligations under this Facility Letter or any
Security Documents to which it is a party and which are
not remedied within 14 days of occurrence;
(o) any of the events specified above or comparable events
thereto occurs in relation to either of the Guarantors.
(p) anything analogous to any of the events specified above
occurs in any relevant jurisdiction in respect of the
Borrower either of the Guarantors or any of their assets.
the Lender may then and at any time thereafter by written notice to
the Borrower terminate the Lender's obligations under this Facility
and/or demand immediate repayment of the Loan together with accrued
interest and all other amounts due hereunder and the Borrower will
comply with such demand forthwith.
15.2 The Borrower will notify the Lender immediately in writing of the
occurrence of any of the events specified in this Clause 15.
16 ASSIGNMENT AND TRANSFER
16.1 The Borrower may not assign or transfer any of its rights or
obligations under this Facility Letter or any Security Document.
16.2 The Lender may on giving written notice to the Borrower assign or
transfer all or any of its rights and obligations under this Facility
Letter and/or any of the Security Documents. The Borrower will enter
into all documents specified by the Lender to be necessary to give
effect to any such assignment or transfer.
16.3 The Lender shall at the request of the Borrower and subject to the
Lender receiving an amount equal to all amounts outstanding under
this Facility Letter and the Security Documents at the date of such
receipt assign or transfer all of its rights and obligations under
this Facility Letter and the Security Documents to such person as the
Borrower shall direct
16.4 This Facility Letter and each of the Security Documents shall be
binding upon and enure for the benefit of the Lender and the Borrower
and the Lender's respective successors and, in the Lender's case,
assigns.
17 NO WAIVERS, REMEDIES CUMULATIVE
Time is of the essence of this Facility Letter and the Security
Documents but no failure or delay on the Lender's part to exercise
any power, right or remedy under
9
this Facility Letter or any of the Security Documents shall operate
as a waiver, nor shall any single or partial exercise by the Lender
of any power, right or remedy under this Facility Letter or under any
of the Security Documents preclude any other or further exercise of
those powers, rights or remedies or the exercise of any other power,
right or remedy. The remedies provided in this Facility Letter and in
the Security Documents are cumulative and are not exclusive of any
remedies provided by law.
18 SEVERABILITY
In case any one or more of the provisions in this Facility Letter
and/or any of the Security Documents should be invalid, illegal or
unenforceable in any respect under any law applicable in any relevant
jurisdiction, the validity, legality and enforceability of the
remaining provisions in this Facility Letter or in any of the
Security Documents shall not in any way be affected or impaired
thereby.
19 LAW
19.1 This Facility Letter shall be governed by and construed in accordance
with English Law.
19.2 For the benefit of the Lender, the parties agree that the Courts of
England are to have jurisdiction to settle any dispute which may
arise in connection with the legal relationships established by this
Facility Letter or otherwise arising in connection with this
Agreement.
19.3 The Borrower irrevocably waives any objection on the ground of form
forum non conveniens or any similar grounds.
19.4 The Borrower and the Lender irrevocably consent to service by process
of mail or in any other manner permitted by the relevant law.
20 NOTICES
20.1 Every notice or other communication under this Facility Letter shall
be in writing and may be delivered personally or by letter telex or
facsimile transmission despatched to the Borrower or the Lender, as
the case may be, at their respective address or telex or facsimile
number stated at the head of this Facility Letter or to their
respective registered office for the time being or to such other
address and/or telex number and/or facsimile number as may be
notified by either of them to the other for such purpose.
20.2 Every notice or other communication shall, unless otherwise provided
in this Facility Letter, be deemed to have been received (if sent by
post) 48 hours after despatch and (if delivered personally or sent by
telex or facsimile transmission) at the time of delivery or despatch
if during normal business hours in the place of intended receipt on a
Business Day in that place and otherwise at the opening of business
in that place on the next succeeding such Business Day, provided that
any notice or communication to be made or delivered by the Borrower
to the Lender shall be effective only when the Lender actually
receives it.
21 PERIOD OF OFFER
Please confirm your acceptance of the offer in this letter by signing
the acceptance on the enclosed duplicate of this letter and returning
it to us within 3 days of today's
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date, failing which this offer shall automatically lapse without any
liability or commitment on our part.
Yours faithfully
/s/ XXXXXXX XXXXXXX XXXXXXXXX, Director
------------------------------------
For and on behalf of
Instar Holdings Inc
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Form of Acceptance
To: Instar Holdings Inc
We hereby accept your offer of a facility on the terms and subject to
the conditions in the Facility Letter of which a copy is attached.
Dated 1996
/s/ XXXXX XXXXXXXXX
-------------------------------------
For and on behalf of
Capital Media (UK) Limited
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SCHEDULE 1
FORM OF NOTICE OF DRAWDOWN
To: Instar Holdings Inc
Attention:
Facility Letter dated 1996 (the "Facility Letter").
Terms defined in the Facility Letter shall have the same meaning in
this Notice.
We:
(i) pursuant to Clause 5 of the Facility Letter request the
Lender to make the Advance to the Borrower of
US$1,000,000 on 1996;
(ii) request the Lender to remit the Advance to
;and
(iii) confirm that the representations, warranties and
undertakings contained in Clause 13 of the Facility Letter
are true and correct in all material respects as if made
on and as of the date hereof and that none of the events
referred to in Clause 15 of the Facility Letter nor any
event which with the giving of notice, lapse of time or as
a result of the proposed Advance would constitute such an
event has occurred or is continuing.
Dated 1996
-------------------------------------
For and on behalf of
Capital Media (UK) Limited
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SCHEDULE 2
CONDITIONS PRECEDENT
(a) the duplicate of this Facility Letter with the attached
acceptance duly signed by the Borrower;
(b) a copy, certified as a true copy by an officer of the
Borrower, of its certificate of incorporation (and any
certificate of incorporation on change of name) and
current memorandum and articles of association or its
analogous incorporating and constitutional documentation;
(c) a copy, certified as a true copy by an officer of the
Borrower, of a resolution of its board of directors to:
(i) approve and authorise the Borrower's acceptance
and execution of this Facility Letter, and the
Security Documents in the agreed form to which
it is party; and
(ii) authorise one or more persons to sign
the form of acceptance of this Facility Letter
and all other notices and communications in
respect of the Facility and to operate the
Facility on the Borrower's behalf,
(d) a copy, certified on a true copy by an officer of each
Guarantor, of its certificate of incorporation (and of
certificate of incorporation on change of name) and
current memorandum and article of association or its
analogous incorporating and constitutional documentation,
(e) a copy, certified as a true copy by an officer of each
Guarantor, of a resolution of its respective board of
directors to approve and authorise such Guarantor's
acceptance and execution of such Guarantee in the agreed
form and any other security documents to which it is a
party, or such other analogous documentation as maybe
required in such Guarantor's place of incorporation to
give effect to the Guarantee and any other Security
Documents to which it is a party.
(f) the execution of the Security Documents in the agreed form
by the Borrower and the Guarantors and the delivery to the
Lender of the documentation required to be delivered to
the Lender by or pursuant to those documents;
(g) the Lender is in its absolute discretion satisfied with
the reasonable arrangements of whatsoever kind which the
Borrower may make or is making or has made in respect of
raising funds.
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