Exhibit 10.4
LOAN AND SECURITIES PURCHASE AGREEMENT
This LOAN AGREEMENT, dated as of May 25, 2000 (this "Agreement"), by and
between Teltran International Group, Ltd., a Delaware corporation, with
principal executive offices located at Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Company"), and Relocate 00x.xxx., Inc. ("Lender").
WHEREAS, the Company desires to borrow $1,117,602 (the "Principal Amount")
from Lender and Lender desires to loan such Principal Amount to the Company upon
the terms and conditions set forth herein;
Now, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
I. Loan - Purchase
A. Lender hereby agrees to lend the Principal Amount to the Company until
November 25, 2000 or such earlier date ("Accelerated Maturity Date") as the
Company or an affiliate receives proceeds of $1,117,602 from a financing. Such
Principal Amount shall bear interest at the rate of nine and one-half (9.5%)
percent per annum payable when the Principal Amount is paid.
B. The loan shall be represented by a secured note and secured by (1) all
the shares of the Company's wholly owned subsidiary Teltran Web Factory Limited
pursuant to pledge or Charge Over Share Agreement under the laws of England and
Wales are (2) shares of the Company and Antra Holdings Group, Inc. pursuant to a
separate Stock Pledge Agreement.
C. For additional consideration of $2,500 payable July 1, 2000 the Company
shall also issue five year warrants to Lender to purchase 250,000 shares (the
"Shares") of Common Stock of the Company at $1.10 per share.
D. Lender shall also have the right to purchase shares of entity to be
organized to operate and ultimately own financial software currently owned by
the Company's subsidiary Teltran Web Factory Limited. The percentage of
ownership and consideration therefore shall be determined by the parties.
II. Disclosure Documents
A. Each Buyer acknowledges receiving the following documents ("Disclosure
Documents") filed by the Company with the Securities and Exchange Commission.
1. Annual Report for 1999 on Form l0-KSB.
2. Current Report dated March 15, 2000 on Form 8-K.
3. Quarterly Report on form 10 QSB for the quarter ending March 31, 2000.
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III. THE COMPANY'S REPRESENTATIONS
The Company represents and warrants to each Buyer that:
A. The Company has registered the Common Stock pursuant to Section 12 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
B. The Company has the requisite corporate power and authority to
designation and to enter into this Agreement and to perform all of its
obligations hereunder and thereunder (including the issuance, sale and delivery
to Buyer of the Securities). The execution, delivery and performance by the
Company of the Documents and the consummation by the Company of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company. Each of the Documents has
been duly and validly executed and delivered by the Company and each Document
constitutes a valid and binding obligation of the Company enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and except as rights to indemnity and
contribution may be limited by federal or state securities laws or the public
policy underlying such laws.
C. The Shares as of the Closing Date will be validly issued and
outstanding, fully paid and nonassessable, and not subject to any preemptive
rights, rights of first refusal or tag-along rights.
D. No authorization, approval or consent of any court or public or
governmental authority is required to be obtained by the Company for the
issuance and sale of the Shares to Buyer as contemplated by this Agreement.
E. The Company has properly and timely filed with the Commission all
reports, forms and other documents required to be filed with the Commission
under the Securities Act and the Exchange Act since June 1, 1999.
F. As of their respective dates, the Disclosure Documents did not contain
at the time of its filing any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
Disclosure Documents as of the dates of such documents, were true and complete
in all material respects and complied with applicable accounting requirements
and the published rules and regulations of the Commission with respect thereto,
were prepared in
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accordance with generally accepted accounting principles in the United States
("GAAP") (except in the case of unaudited statements permitted by Form l0-Q
under the Exchange Act) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly presented
the consolidated financial position of the Company and its Subsidiaries as of
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments that in the aggregate are not material and
to any other adjustment described therein).
IV. REGISTRATION RIGHTS
A. Not later than August 1, 2000 the Company shall file with the Commission
a registration statement on Form SB-2, or other appropriate form, which shall
include the sale by Lender of the Shares. As used in this Article "Shares" shall
also be referred to as "Restricted Securities" and "Lender" shall be referred to
as "Holder" or "Seller".
B. In connection with any registration statement to be filed herein, the
Company shall:
1. furnish to each seller of the Restricted Securities such number of
copies of such registration statement and of each such amendment or
supplement thereto (in each case including all exhibits), including a
preliminary and final prospectus, in conformity with the requirements
of the Securities Act,
2. use its best efforts to register or qualify the Restricted Securities
covered by such registration statement under the securities or blue
sky laws of such jurisdictions as may be reasonably requested by the
Holder; and
3. notify each seller of Restricted Securities covered by such
registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered
under the Securities Act or the happening of any event as a result of
which the registration statement, the prospectus or any document
incorporated therein by reference, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
at the request of such seller, prepare and furnish to such seller a
post-effective amendment or supplement to the registration statement
or the related prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
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C. EXPENSES. All expenses incurred by the Company in complying with its
obligations under Articles hereof, including, without limitation, all
registration and filing fees, fees and expenses of complying with securities and
blue sky laws, printing expenses and fees and disbursements of counsel and of
independent certified public accountants of the Company shall be paid by the
Company; provided, however, that all selling commissions and stock transfer
taxes applicable to the Restricted Securities covered by the registration
effected hereof and Seller's counsel fees, shall be borne by the seller or
sellers thereof
D. INDEMNIFICATION.
1. In the event of any registration of any Restricted Securities under
the Securities Act pursuant to this Article IV, the Company shall
indemnify and hold harmless the seller of such shares, each
underwriter of such shares, if any, each broker or any other person
acting on behalf of such seller and each other person, if any, who
controls any of the foregoing persons, within the meaning of the
Securities Act, against any losses, claims, damages or liabilities
(including reasonable attorneys' fees), joint or several, to which any
of the foregoing persons may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Restricted
Securities were registered under the Securities Act, the final
prospectus, any document incorporated by reference therein or any
amendment or supplement thereto, or any document prepared and/or
furnished by the Company incident to the registration or qualification
of any Restricted Securities pursuant to Article IV hereof, provided,
however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission of a material fact made in said registration
statement, said prospectus or said amendment or supplement or any
document incident to the registration or qualification of any
Restricted Securities pursuant to Article IV hereof in reliance upon
and in conformity with written information furnished to the Company
through an instrument duly executed by such seller or such underwriter
specifically for use in the preparation thereof or arises out of
information relating to any of the foregoing prior to the sale hereby
as reflected in documents, exhibits and financial statements delivered
hereunder.
2. Each seller agrees to indemnify and hold harmless (in the same manner
and to the same extent as set forth in the preceding paragraph (1) of
this
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section IV(D) the Company, each director of the Company, each officer
of the Company who shall sign such registration statement and any
person who controls the Company within the meaning of the Securities
Act, with respect to any untrue statement or omission of a material
fact from such registration statement, any preliminary prospectus
contained therein, the final prospectus, or any amendment or
supplement thereto, if such untrue statement or omission of a material
fact was made in reliance upon and in conformity with written
information furnished to the Company through an instrument duly
executed by such seller or such underwriter specifically for use in
the preparation of such registration statement, final prospectus or
amendment or supplement. The foregoing shall not affect the
indemnification obligation of Article IV hereof.
3. Promptly after receipt by an indemnified party of notice of the
commencement of any actions involving a claim referred to herein, such
indemnified party will, if a claim in respect thereof is made against
an indemnifying party, give written notice to the latter of the
commencement of such action. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled
to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying
party shall not be responsible for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof; provided, however, that if any indemnified party
shall have reasonably concluded that there may be one or more legal
defenses available to such indemnified party which are different from
or additional to those available to the indemnifying party, or that
such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Article
IV, the indemnifying party shall reimburse such indemnified party for
that portion of the fees and expenses of any counsel retained by the
indemnified party which are reasonably related to the matters covered
by the indemnity agreement provided in this Article IV.
4. The failure to notify an indemnifying party promptly of the
commencement of any such action, if materially prejudicial to the
ability of the indemnifying party to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party
under this Article VI, but the omission so to notify the indemnifying
party will not
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relieve the indemnifying party of any liability that it may have to
any indemnified party otherwise than under this Section IV(D).
The indemnifying party shall not make any settlement of any claims
indemnified against hereunder without the written consent of the indemnified
party or parties, which consent shall not be unreasonably withheld.
X. Xxxxxx. Each Holder shall provide the Company or any underwriter with
such documentation and information as is generally customary to be provided by a
seller of registered securities.
V. MISCELLANEOUS
A. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York, without regard to the conflicts of law
principles of such state.
B. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument. A facsimile transmission of
this signed Agreement shall be legal and binding on all parties hereto.
C. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
D. In the event any one or more of the provisions contained in this
Agreement or in the other Documents should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
E. This Agreement and the Documents constitute the entire agreement among
the parties pertaining to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by all parties. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
F. Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally recognized overnight courier service,
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and shall be deemed given when so delivered personally or by overnight courier
service, or, if mailed, three (3) days after the date of deposit in the United
States mails, as follows:
A. if to the Company, to:
Teltran International Group, Ltd.
Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxx Xxxxxx Xxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxxxxx, Esq.
(000) 000-0000
(000) 000-0000 (Fax)
B. If to Lender, to:
Relocate 000.xxx Inc.
Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
G. This Agreement shall not be assignable by either of the parties hereto
prior to the Closing without the prior written consent of the other party, and
any attempted assignment contrary to the provisions hereby shall be null and
void; provided, however, that Lender may assign its rights and obligations
hereunder, in whole or in part, to any Affiliate of Lender.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the date first above written.
TELTRAN INTERNATIONAL GROUP, LTD.
By: /s/ Xxxxx X Xxxxxx
-----------------------------
NAME: Xxxxx X Xxxxxx
TITLE: president & Ceo
RELOCATE 000.XXX, INC.
By:
-----------------------------
NAME:
TITLE:
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