EXHIBIT 10.16
POINTE CAPITAL
556 MAIN STREET
HUNKINS WATERFRONT PLAZA
MEMORIAL SQUARE
CHARLESTOWN
NEVIS, WEST INDIES
ASTRATA EUROPE LTD
112-113 THE
CHAMBERS
CHELSEA HARBOUR
LONDON SW10 0XF
1 AUGUST 2004
Dear Sirs,
Re: MEDIUM TERM LOAN
FACILITY
We offer to place at your
disposal a US Dollar
loan facility in the
aggregate
principal amount of six hundred thousand US dollars (USD $
600,000.00) for the
purpose of general corporate
operations on the following terms and conditions:
1 DEFINITIONS
In this letter, the following expressions shall, except where the context
otherwise requires, bear the
meanings attributed to them respectively:
1.1 'the Lender' means
Pointe Capital Ltd and
shall include
its
successors and assigns;
1.2 'the Borrower' means Astrata Europe Ltd, registered in
England
with registration
number 4525814 and having its registered office
at 38 Hertford Street, London W1J 7SG;
1.3 'a business
day' means a day on
which Lenders
are open
for
business in London;
1.4 'the Commitment
Expiry Date' means the earlier of 4
months
after the date of this
letter and the date
upon which the full
amount of the Facility is first outstanding under this
letter;
1.5 'a drawing'
means a drawing
under the Facility or, as the
context may require,
the principal amount
comprised therein
and
for the time being outstanding;
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1.6 'an event of default' means any one of the events specified
in
clause 8;
1.7 'the Facility'
means the US Dollar loan facility in the
maximum aggregate
principal amount of six hundred thousand US
dollars (USD $ 600,000.00) the terms and conditions of which are
set out in this letter;
1.8 'the Loan' means the aggregate principal amount of drawings;
and
1.9 'the Repayment Dates' means 1 February 2005 and every 6
months
after that date until the loan is fully repaid.
The headings in this letter are inserted for convenience only and shall be
ignored in construing this
letter.
2 DRAWINGS
Subject to:
2.1 the Lender having
received and found
satisfactory not
later
than 5:00 pm on the second business day before the first
drawing:
2.1.1 a certified copy
of the certificate of incorporation
of the Borrower;
2.1.2 a copy of the
memorandum and articles of association
of the Borrower certified by a director or the
secretary of
the Borrower to be complete and
up-to-date; and
2.1.3 a copy of a resolution of the directors of the
Borrower, certified by
a director or the
secretary
of the Borrower
to be in full
force and effect
at
the date of receipt by the Lender, approving this
letter and authorising
a person or persons to
sign
and deliver on behalf
of the Borrower
this letter
and any other
communications
or documents to be
delivered by the Borrower under this letter;
2.2 no event of
default having occurred and no event having
occurred that, with
the giving of notice and/or the lapse of time
and/or upon the Lender
making the relevant
determination,
would
constitute an event of default; and
2.3 the Lender having
received not later than 5:00 p.m.
on the
second business
day before
each drawing a notice of drawing
by
tested telex or letter;
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3 INTEREST
3.1 The Borrower shall
pay interest on the Loan at the rate of 3%
a year above the prime
rate for the time
being and from time
to
time.
3.2 All interest payable pursuant to this letter shall accrue
from
day to day and shall be calculated on the basis of a year of
365
days and shall be paid, in the case of interest under clause 3.1,
on the dates falling at 3-monthly intervals after the date of
this
letter and, in the case of interest under clause 3.2, on
demand.
3.3 The Borrower
shall, on each day on
which interest is payable
under sub-clause 3.3 above, pay as additional interest the cost
to
the Lender, as determined by the Lender in its sole discretion,
of
complying with any reserve, special deposit or other
requirements
of the Lender of England, the Financial Services Authority
or any
other applicable
regulatory authority
as affecting
transactions
under the Facility.
3.4 The statement
of the Lender as to the rate or amount of
interest payable
pursuant to this clause shall, in the absence of
manifest error, be conclusive.
4 REPAYMENT
The Loan will be repaid by
the Borrower
by 6 equal,
or substantially equal,
instalments on the Repayment
Dates, the amount
comprised in each such repayment
instalment being equal to 16.67% of the Loan at the
close of business
on the
Commitment Expiry
Date.
5 PREPAYMENT AND
CANCELLATION
5.1 Any part of the Loan prepaid shall be applied in reducing
the
repayment instalments under clause 4 in inverse order of
maturity.
5.2 The Borrower may,
by giving the Lender not less than 30 days'
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prior
irrevocable
written notice,
at any time before the
Commitment Expiry
Date cancel the whole or any part of the
Facility undrawn.
6 REPRESENTATIONS AND
WARRANTIES
The Borrower represents and warrants to the Lender on the
date of this letter
and on each date while the Loan is outstanding or the Lender is under any
obligation, contingent or
otherwise, to make available a drawing as follows:
6.1 the execution on behalf of the Borrower of the form of
acceptance endorsed on this letter has been validly authorised
and
the obligations
expressed as being
assumed by the Borrower under
this letter
constitute
its valid, legal and binding and
enforceable obligations;
6.2 neither the
execution and delivery
of the form of acceptance
endorsed on this letter by the Borrower nor the performance or
observance of any of its obligations under this letter
will:
6.2.1 conflict
with, or result in any
breach of, any law,
statute, regulation,
indenture,
mortgage, trust
deed, agreement or
other instrument,
arrangement,
obligation or duty by which the Borrower
6.2.2 or any of its assets is bound; or cause any
limitation on any of
the powers
of the Borrower,
howsoever imposed, or on the right or ability of the
directors of the
Borrower to exercise
such powers,
to be exceeded;
6.3 the Borrower is not in default under any law, statute,
regulation, indenture,
mortgage, trust deed, agreement or
other
instrument, arrangement, obligation or duty by which it is
bound;
6.4 the most
recent audited profit and loss accounts of the
Borrower and the audited balance sheet of the Borrower as
at that
date give a true and fair view of the results of the operations
of
the Borrower
for that period and
the financial
position of
the
Borrower as at that
date and there has been no material adverse
change in the
business, assets,
condition or
operations of
the
Borrower since that
date;
6.5 there exists no mortgage, charge, pledge, lien, encumbrance
or
other security
interest over the whole or any part of the
undertaking or
assets, present or future, including uncalled
capital, of the
Borrower except those
already disclosed to the
Lender as of the date of this Agreement; and
<PA
