UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 12, 2002
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State of Incorporation)
000-25677 51-0384117
(Commission File Number) (I.R.S. Employer Identification No.)
1620 - 400 BURRARD STREET
VANCOUVER, BRITISH COLUMBIA V6C 3A6, CANADA
(Address of principal executive offices)
(604) 683-5767
(Registrant's telephone number, including area code)
STEFAN-GEORGE-RING 19-23
81929 MUNICH, GERMANY
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
SETTLEMENT AGREEMENT
Cybernet Internet Services International, Inc. (the "Registrant"), MFC Bancorp
Ltd. ("MFC"), Andreas Eder and Paolo di Fraia entered into an agreement dated
for reference March 12, 2002 (the "Settlement Agreement") pursuant to which the
parties settled various outstanding matters, including those related to the
nomination for election by MFC of certain persons to the Registrant's board of
directors at the meeting of stockholders held on March 12, 2002 (the
"Stockholders' Meeting").
Prior to the Stockholders' Meeting, the Registrant at a duly convened meeting of
its then existing board of directors approved by way of a unanimous resolution
of the nomination and election to the board of all MFC nominees at the
Stockholders' Meeting.
Under the Settlement Agreement, the Registrant agreed, among other things,
together with MFC, Ventegis Capital AG and Holger Timm (collectively, the
"Shareholders Group") pursuant to the terms of a mutual release dated March 12,
2002, to release Dr. di Fraia and certain directors (the "Participating
Directors") from all claims arising out of service to the Registrant by the
Participating Directors. In addition, pursuant to the terms of the mutual
release, the Registrant agreed together with the Participating Directors to
release the Shareholders Group from all claims arising out of their involvement
with the Registrant.
Under the Settlement Agreement, Mr. Eder and Dr. di Fraia each severally agreed
with the Registrant, among other things, that all employment arrangements
between the Registrant, its subsidiaries and each of them would be amended
pursuant to the terms of termination agreements dated March 12, 2002. In
connection therewith, the Registrant agreed, among other things, to deposit into
an escrow account in favour of Mr. Eder and Dr. di Fraia an amount equal to Euro
115,000 and Euro 82,500, respectively. In addition, under the terms of the
Settlement Agreement, the Registrant agreed to make certain other payments and
to deposit them into an escrow account.
Under the terms of the Settlement Agreement, MFC agreed, among other things, to
arrange a revolving term credit facility for the Registrant for, among other
things, to fund working capital and certain stipulated payments to be made
pursuant to the Settlement Agreement.
The foregoing summary of the material provisions of the Settlement Agreement is
not complete and is qualified in its entirety by reference to the Settlement
Agreement attached hereto.
CREDIT FACILITY AGREEMENT
The Registrant has entered into a credit facility agreement with MFC Merchant
Bank S.A. (as lender) and 636892 B.C. Ltd. (as security agent on behalf of the
lender) as of March 12, 2002 (the "Credit Facility Agreement") pursuant to which
the lender agreed to make available to the Registrant in accordance with, and
subject to the terms and conditions of, the Credit Facility Agreement, a
revolving term credit facility in the aggregate principal amount of up to Euro
7.0 million, available under three tranches as follows:
(a) Euro 949,000 under the first tranche to be used for the purpose of
making stipulated payments pursuant to the Settlement Agreement and the
payment of financing fees and expenses pursuant to the Credit
Facility Agreement;
(b) Euro 1,500,000 under the second tranche to be used by the Registrant for
the sole purpose of financing its working capital and general
corporate requirements; and
(c) Euro 4,551,000 under the third tranche to be used for the sole purpose
of restructuring the Registrant's current indebtedness and, in
connection therewith, financing its working capital requirements.
The credit facility bears interest at 14% per annum and has a term of one year
to be paid or repaid on the earlier of March 12, 2003 (which date the lender may
extend at its sole option for additional periods of 12 months per extension) and
the occurrence of an event of default as set out in the Credit Facility
Agreement.
As continuing security for the performance of all of the Registrant's
obligations under the credit facility, the Registrant pledged certain securities
held by it in certain of its subsidiary companies or companies in which the
Registrant has an interest and provided a security interest in all of its right,
title and interest in and to presently owned or held and after acquired personal
property, assets and undertakings (other than real property) and all proceeds
thereof and therefrom.
The advancement of funds under the credit facility is subject to certain
conditions precedent, including, but not limited to, the Registrant's
representations and warranties in the Credit Facility Agreement and related
documents being true and correct and there being no event that has occurred or
is continuing or that would result from such an advance of funds under the
credit facility that constitutes or would constitute a default or an event of
default under the terms of the Credit Facility Agreement. In addition, the
advancement of funds under the second and third tranche is subject to
supplemental conditions precedent.
The credit facility contains various covenants restricting, among other things,
the Registrant's ability to incur indebtedness, merge or dispose of assets, and
make distributions, loans and investments.
Events of default under the credit facility are customary for facilities of this
type, including, but not limited to, the failure to pay principal and interest
as it becomes due, the failure to perform certain covenants and the occurrence
of a change of control with respect to the Registrant or any of its
subsidiaries.
The Credit Facility Agreement and the transactions contemplated thereby were
unanimously approved by a quorum of the board of directors existing prior to the
Stockholders' Meeting.
The foregoing summary of the material provisions of the Credit Facility
Agreement is not complete and is qualified in its entirety by reference to the
Credit Facility Agreement attached hereto.
STOCKHOLDERS' MEETING
The Registrant's Stockholders' Meeting was held on March 12, 2002. Immediately
prior to the Stockholders' Meeting, Michael J. Smith and Eduard Seligman were
appointed as Class B directors of the Registrant to fill the Class B director
vacancies. In addition, prior to the Stockholders' Meeting, a quorum of the
then existing board of directors unanimously approved the nominations
for election of Roy Zanatta and Greg Elderkin as Class B directors, and
Michael J. Smith and Eduard Seligman as Class C directors at the
Stockholders' Meeting.
At the Stockholders' Meeting, Roy Zanatta and Greg Elderkin were duly elected as
Class B directors and Michael J. Smith and Eduard Seligman were elected as Class
C directors of the Registrant.
On March 12, 2002, after the Stockholders' Meeting, the Registrant's board of
directors appointed Slobodan Andjic as a Class A director to fill one of the two
Class A director vacancies and appointed Michael J. Smith as President and Chief
Executive Officer and Roy Zanatta as Secretary and Treasurer of the Registrant.
EXECUTIVE OFFICE RELOCATION
The principal executive office of the Registrant has been relocated to Suite
1620, 400 Burrard Street, Vancouver, British Columbia, Canada.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
EXHIBIT NO. DESCRIPTION
------------ -----------
10.1 Settlement Agreement dated for reference March 12, 2002
among Cybernet Internet Services International, Inc., MFC
Bancorp Ltd., Andreas Eder and Paolo di Fraia.
10.2 Credit Facility Agreement dated for reference March 12,
2002 among MFC Merchant Bank S.A., Cybernet Internet
Services International, Inc. and 636892 B.C. Ltd.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CYBERNET INTERNET SERVICES
INTERNATIONAL, INC.
/s/ Michael J. Smith
-------------------------------------
Michael J. Smith
President and Chief Executive Officer
Date: March 27, 2002
CYBERNET INTERNET SERVICES INTERNATIONAL, INC.
FORM 8-K
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- ------------
10.1 Settlement Agreement dated for reference March 12, 2002 among
Cybernet Internet Services International, Inc., MFC Bancorp
Ltd, Andreas Eder and Paolo di Fraia.
10.2 Credit Facility Agreement dated for reference March 12, 2002
among MFC Merchant Bank S.A., Cybernet Internet Services
International Inc. and 636892 B.C. Ltd.