EXHIBIT 10.8
THIS DEED OF RELEASE is made on 10th May 2000
BETWEEN: TRADE WIND COMMUNICATIONS LIMITED of Xxxxx 00, Xxxxxxxxx Xxxxx,
000 Xxxxxx Xxxxxx, Xxxxxx, XXX 0000 Xxxxxxxxx ("TWC");
AND: XXXXXXXXXXXXXX.XXX, INC. of Xxxxx 00, Xxxxxxxxx Xxxxx, 000 Xxxxxx
Xxxxxx, Xxxxxx, XXX 0000 Xxxxxxxxx ("FLX");
AND: ATLANTIC INTERNATIONAL CAPITAL HOLDINGS LIMITED of Xxxx House 00
Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxx ("XXXX");
AND: XXXXXXX XXXXXXX of 000 Xxxx Xxxxxxxx Xxxx Xx, Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx, XXX ("Iamunno").
BACKGROUND
A. FLX and XXXX are parties to a consulting agreement dated on or about March
2000 ("CONSULTING AGREEMENT") under which XXXX agreed, among other things,
to assist FLX to raise capital of at least US$3,660,000.
B. FLX and XXXX are parties to a lock - up agreement dated on or about March
2000 ("LOCK-UP Agreement") under which XXXX agreed to the establishment of
restrictions over all of the shares in the capital of FLX held by XXXX and
its Affiliates.
X. XXXX has been unable to assist FLX to raise the sum of US$3,660,000 in
accordance with the Consulting Agreement. XXXXX XXXXXX has agreed to
consider assuming the obligations of XXXX under the Consulting Agreement in
respect of the period from the date of this Deed until 31st May 2000 and
this will be subject to a separate agreement reached directly between FLX
and Xxxxx Xxxxxx.
D. The Parties wish to terminate the Consulting Agreement and the Lock-Up
Agreement and to release each other or the others from all liability for
possible breaches of those agreements on the terms of this Deed.
IT IS AGREED
1 DEFINITIONS
(a) Terms defined in the Lock-Up Agreement have the same meaning in this Deed.
(b) In this Deed:
"CLAIM" means any claim or cause of action including, but not limited to:
(a) in contract (including, but not limited to, breach of warranty);
(b) in tort (including, but not limited to, misrepresentation or
negligence); or
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(c) under statute (including, but not limited to, Part V or Part VI of the
Trade Practices Xxx 0000 (Cth) or Part V or VI of the Fair Trading Act
1987 (NSW));
"EFFECTIVE DATE" means the later of:
(a) the date 394,910 Shares are cancelled in accordance with Clause 5; and
(b) the date that less than 394,190 Shares are cancelled in accordance
with Clause 5(a) and XXXX and Iamunno have fully complied with their
obligations under Clause 5(c);
"ENCUMBRANCE" means an interest or power:
(a) reserved in or over an interest in any asset including, but not
limited to, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset
under a xxxx of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt, any other monetary obligation
or the performance of any other obligation, and includes, but is not
limited to, any agreement to grant or create any of the above;
"506 SHARES" has the meaning given in Clause 6(a);
"XXXXXX AGREEMENT" means the agreement referred to in Recital C above;
"PROMISSORY NOTE" means the promissory note issued by FLX to XXXX dated
March 1999]; and
"SHARES" means shares of common stock in the capital of FLX.
2 INTERPRETATION
In this Deed, unless the contrary intention appears:
(a) a reference to a Clause, Schedule or Annexure is a reference to a clause,
schedule or annexure of or to this Deed and a reference to this Agreement
includes without limitation any Recital, Schedule or Annexure;
(b) a reference to this Deed or another instrument includes without limitation
any variation or replacement of it;
(c) a reference to a statute, ordinance, code or other law includes without
limitation regulations and other instruments under it and consolidations,
amendments, re-enactments or replacements of it;
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(d) the singular includes without limitation the plural and vice versa;
(e) the word person includes without limitation a firm, a body corporate, an
unincorporated association or an authority;
(f) a reference to a person includes without limitation a reference to the
person's executors, administrators, successors, substitutes (including
without limitation persons taking by novation) and assigns;
(g) an agreement, representation or warranty in favour of 2 or more persons is
for the benefit of them jointly and severally;
(h) if a period of time is specified and dates from a given day or the day of
an act or event, it is to be calculated exclusive of that day;
(i) a reference to a day is to be interpreted as the period of time commencing
at midnight and ending 24 hours later;
(j) a reference to time is a reference to Sydney time;
(k) other parts of speech and grammatical forms of a word defined in this
Agreement have a corresponding meaning; and
(l) if any action under this Deed must be completed on a Business Day, it must
be completed before 5:00 pm (Sydney time) on that Business Day.
3. TERMINATION
(a) Subject to Clause 3(b), with effect from the Effective Date:
(i) all contracts, arrangements and understandings between any of XXXX and
Iamunno on the one hand and FLX and TWC on the other including,
without limitation the Lock-Up Agreement and the Consulting Agreement
are terminated; and
(ii) each Party is released from all obligations under those contracts,
arrangements and understandings.
(b) Clause 3(a) does not apply in respect of the obligations of the Parties
under this Deed and the Promissory Note as amended by this Deed.
4. RELEASE
(a) Subject to Clause 4(b), with effect from the Effective Date, each Party
irrevocably releases and holds harmless each other Party from:
(i) all Claims presently existing; and
(ii) all Claims which, but for this Deed may arise in the future,
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under or in respect of all contracts, arrangements or understandings
between any of XXXX and Xxxxxxx on the one hand and FLX and TWC on the
other including, without limitation the Lock-Up Agreement and the
Consulting Agreement on any account whatsoever.
(b) Clause 4(a) does not apply in respect of the obligations of the Parties
under this Deed and the Promissory Note as amended under this Deed.
5. CANCELLATION OF SHARES
(a) Within 5 Business Days of the date of this Deed, FLX must cancel 394,910
Shares held by XXXX, Iamunno and their Affiliates. This number of Shares
represents the balance of the 600,000 Shares held by XXXX on the date of
the Lock-Up Agreement after deduction of:
(i) 40,984 Shares released from the performance restrictions under clause
1.1 of the Lock-Up Agreement as a result of capital raisings
undertaken by XXXX prior to the date of the Lock-Up Agreement;
(ii) 123,079 Shares released from the performance restrictions as a result
of the raising of US$750,000 net completed by FLX in respect of which
FLX has become obliged to pay XXXX a commission under the Consulting
Agreement since the date of the Consulting Agreement;
(iii) 41,027 Shares released from the performance restrictions as a result
of the raising of US$250,000 to be completed by the issue of Shares
under Clause 7(a) by application of part of the principal outstanding
under the Promissory Note.
(b) XXXX and Iamunno consent to the cancellation of Shares and must procure the
grant of consent by Affiliates to the cancellation of Shares in accordance
with Clause 5(a).
(c) If at the date of this Deed neither XXXX nor Xxxxxxx hold sufficient Shares
to permit the cancellation of 394,910 Shares in accordance with Clause
5(a), XXXX and Iamunno must pay to FLX an amount equal to the number of
Shares not available for cancellation under Clause 5(a) multiplied by
US$2.50. This amount is agreed to be a genuine pre-estimate of the loss FLX
will suffer as a result of the failure to cancel 394,910 Shares in
accordance with Clause 5(a). At the election of FLX, FLX may set-off the
obligation to pay this amount against the principal outstanding under the
promissory note.
(d) XXXX and Xxxxxxx must indemnify FLX and keep FLX indemnified against any
cost, loss, liability, damage or expense suffered or incurred as a result
of or otherwise in connection with the cancellation of Shares in accordance
with Clause 5(a).
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6. COMMISSION
(a) Subject to Clause 6(b), if:
(i) FLX is successful by 31st May 2000 in raising not less than
US$1,500,000 net by the issue of not more than 600,000 Shares at not
less than $2.50 net per share which FLX has been authorised to issue
in accordance with a Form 506 filing filed with the United States
Securities and Exchange Commission ("506 SHARES"); and
(ii) FLX is obliged to pay Xxxxx Xxxxxx commission in respect of those
Shares in accordance with a Xxxxxx Agreement whereby shares are placed
at a minimum of $2.50 net to the company,
then FLX must pay to XXXX, or as it may direct, the sum of US$70,000 in
respect of investor relation services provided by XXXX prior to the
Effective Date.
(b) FLX is entitled to set-off against the amount payable under Clause 6(a) (if
any) any amount expended by FLX in securing investor relation services from
any third party or any costs associated with Investor Relations matters..
7. SUBSCRIPTION FOR SHARES
(a) XXXX hereby applies for:
(i) 100,000 Shares at an issue price of US$2.50 net per Share; and
(ii) agrees to the entry of its name in the register of members of FLX and
agrees to be bound by its by-laws from time to time.
(b) XXXX directs FLX to repay US$250,000 of the principal outstanding under the
Promissory Note and irrevocably directs FLX to apply that sum in payment up
of the 100,000 Shares referred to in Clause 7(a)(i).
(c) XXXX directs FLX to repay part or all of the principal outstanding under
the Promissory Note and irrevocably directs FLX to apply that sum in
payment of the Shares referred to in Clause 7(a)(ii).
(c) FLX must issue to XXXX the Shares referred to in:
(i) Clause 7(a)(i) within 5 Business Days after the Effective Date; and
(ii) Clause 7(a)(ii) by 31st May 2000 if required to be issued under that
Clause.
8. PROMISSORY NOTE
With effect from the Effective Date, the Promissory Note is amended as follows:
(a) the principal outstanding under the Promissory Note is repayable on the
later of:
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(i) the date FLX or another Subsidiary of TWC directly raises not less
than US$3,000,000 and secures official quotation of its securities on
NASDAQ National Market, Amex or the Australian Stock Exchange Limited
or comparable stock exchange in the United States of America; and
(ii) 31 December 2000;
(b) at the election of FLX, at any time after 31 December 2000 to the extent
that sufficient Shares are available for subscription in accordance with
all applicable securities laws, FLX may repay the principal outstanding
under the Promissory Note and apply that principal in payment up of 506
Shares at an issue price of US$2.50 net per Share;
(c) if FLX is successful in raising not less than US$1,500,000 at a minimum
price of $2.50 net per share by the issue of not more than 600,000 506
Shares, the principal outstanding under the Promissory Note attracts
interest at the rate specified in the Promissory Note from the later of
completion of that raising and 31 December 2000 until repayment of the
principal.
9 WARRANTIES
(a) Each of XXXX and Iamunno represents and warrants to FLX and TWC that:
(i) each of XXXX and Xxxxxxx has power to enter into and perform all of
its obligations under this Agreement;
(ii) all approvals and authorities that may be required to permit each of
XXXX and Iamunno to enter into and perform this Deed in accordance
with its terms have been obtained and remain valid and subsisting;
(iii) XXXX and Xxxxxxx and their Affiliates are the registered holders of
not less than 394,910 Shares;
(iv) there are no Encumbrances or other third party interests subsisting
over the Shares held by them or their Affiliates which will or may
preclude FLX giving effect to the cancellation of those Shares in
accordance with Clause 5(a).
(b) Each of FLX and TWC has entered into and will perform this Deed in reliance
on the warranties set out in Clause 9(a).
(c) The warranties set out in Clause 9(a) survive cancellation of the Shares
under Clause 5(a).
10 INDEMNITY
Each of XXXX and Iamunno unconditionally and irrevocably undertakes to indemnify
and keep indemnified each of FLX, TWC and their officers, employees, advisers
and Related Bodies Corporate ("INDEMNIFIED PARTIES") and to hold them harmless
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from and against all claims, demands, damages, losses, costs, expenses and
liabilities ("LOSSES") suffered or incurred directly or indirectly as a result
of:
(a) any of the warranties or representations by each of XXXX and Xxxxxxx
contained in this Deed not being true and correct;
(b) any breach of this Deed by XXXX or Iamunno;
(c) any actions undertaken by XXXX, Xxxxxxx or any of their Affiliates under
the Consulting Agreement, the Lock-Up Agreement or the merger agreement
between the Parties
11. NO ASSOCIATION
With effect from the Effective Date, XXXX and Iamunno must cease to hold
themselves out as being in any way associated with FLX or TWC and must ensure
that the name of FLX, TWC or any of their Affiliates does not appear on any
promotional material prepared or circulated by or on behalf of XXXX, Xxxxxxx or
any of their Affiliates.
12. SUNSET
If the Effective Date has not occurred by 31st May 2000, Clauses 3, 4 and 6 are
terminated and each Party is released from all obligations under those Clauses.
13. GENERAL
(a) A Party may exercise a right, power or remedy at its discretion and
separately or concurrently with another right, power or remedy. A single or
partial exercise of a right, power or remedy by a Party does not prevent a
further exercise of that or any other right, power or remedy. Failure by a
Party to exercise or delay in exercising a right, power or remedy does not
prevent its subsequent exercise.
(b) A provision of or a right created under this Deed may not be:
(i) waived except in writing signed by the Party granting the waiver; or
(ii) varied except in writing signed by the Parties.
(c) Any failure or omission by a Party at any time to enforce or require strict
timely compliance with any provision of this Agreement will not affect or
impair that provision in any way or the right of that Party to avail itself
of any remedy it may have in respect of any breach of that provision.
(d) Each Party agrees, at its own expense, on the request of the other Party,
to do everything reasonably necessary to give effect to this Deed and the
transactions contemplated by it including without limitation the execution
of all documents.
(e) If the whole or any part of a provision of this Deed is void, unenforceable
or illegal in a jurisdiction, the remainder of this Deed has full force and
effect and the validity or enforceability of that provision in any other
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jurisdiction is not affected. This Clause has no effect if the severance
alters the basic nature of this Agreement or is contrary to public policy.
(f) This Deed may only be amended in writing signed by the Parties.
(g) This Deed may be executed in any number of counterparts each of which once
so executed, is deemed to be an original and all the duly executed
counterparts taken together are deemed to constitute one and the same
instrument.
(h) This Deed and the transactions contemplated by this Deed are governed by
and are to be construed in accordance with the law in force in New South
Wales. Each Party submits to the non-exclusive jurisdiction of the Courts
of New South Wales and of the Courts having jurisdiction to hear appeals
therefrom.
EXECUTED as a Deed.
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SIGNED for and on behalf of )
XXXXXXXXXXXXXX.XXX,INC. )
by authority of the directors )
in the presence of: )
/s/ N. R. Bird
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Signature of Authorised Person Signature of Authorised Person
Chief Executive Officer
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Office Held Office Held
N. R. Bird
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Name of Authorised Person Name of Authorised Person
SIGNED for and on behalf of )
TRADE WIND COMMUNICATIONS )
LIMITED by authority of the directors )
the presence of: )
/s/ N. R. Bird /s/ X. Xxxxxxxx
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Signature of Authorised Person Signature of Authorised Person
Chief Executive Officer Director
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Office Held Office Held
N. R. Bird Xxxxx Xxxxxxxx
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Name of Authorised Person Name of Authorised Person
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SIGNED for and on behalf of )
ATLANTIC INTERNATIONAL CAPITAL )
HOLDINGS LIMITED by authority of )
the directors the presence of: )
/s/ Xxxxxxx Ianunno
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Signature of Authorised Person Signature of Authorised Person
Director
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Office Held Office Held
Xxxxxxx X. Ianunno
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Name of Authorised Person Name of Authorised Person
SIGNED by )
XXXXXXX XXXXXXX )
the presence of: )
/s/ illegible /s/ Xxxxxxx Ianunno
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Signature of Witness Signature of Xxxxxxx Xxxxxxx
illegible
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Name of Witness
