Sample Business Contracts

Loan Agreement - Critical Path Inc., William McGlashan and Marie McGlashan

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                                 LOAN AGREEMENT

      THIS LOAN AGREEMENT ("Agreement") is entered into as of the 20th day of
May, 2002, by and among CRITICAL PATH, INC., a California corporation (the
"Lender"), WILLIAM MCGLASHAN and MARIE MCGLASHAN (together, the "Borrower"),

                                 W I T N E S S T H:

      WHEREAS, the Lender and William McGlashan are parties to a First Amended
and Restated Employment Agreement, dated as of January 7, 2002, which provides
for the Lender to make a loan to the Borrower for the purchase of a single
family residence to be designated by Borrower, in his sole discretion, which
shall be the Borrower's principal residence (the "Principal Residence"), in an
amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000) (the

      WHEREAS, the Lender is willing to make the Loan to the Borrower on the
terms and conditions set forth in this Agreement:

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

      1. Agreement to Make Loan. The Lender hereby agrees to make the Loan,
which shall be funded upon the close of the escrow on the Principal Residence
(the "Closing"); subject, however, to satisfaction of the terms and conditions
hereinafter set forth. Such Loan shall be evidenced by, and governed by, this
Agreement, the terms and conditions of the Secured Promissory Note, dated the
date hereof, in substantially the form attached hereto as Exhibit A, by and
between the Lender and the Borrower (the "Note"), and the Deed of Trust
described in Section 3(d).

      2. Amount of Loan. The Loan shall be in the amount requested by the
Borrower but not more than the purchase price of the Principal Residence;
provided, however, the Loan amount shall not exceed the lesser of (i) the
appraised value of the Principal Residence minus the amount of any loan or loans
secured by a deed of trust recorded on the date of the Closing and senior to the
deed of trust in favor of the Lender, or (ii) One Million Five Hundred Thousand
Dollars ($1,500,000). The Borrower shall deliver a request for the Loan funding,
together with a true, correct and complete copy of the contract for their
purchase of the Principal Residence no less than five business days before the
Loan is to be disbursed.

      3. Conditions Precedent to Loan. The Lender shall not be obligated to fund
the Loan until the Lender is satisfied that each of the following conditions
(the "Conditions Precedent") has been met:

      (a) The Borrower has executed and delivered this Agreement and Note to the

      (b) The Borrower has entered into the Pledge Agreement, dated as of the
date hereof, by and between the Lender and the Borrower, in substantially the
form attached hereto as Exhibit B (the "Pledge Agreement") and has assigned the
Pledged Shares (as defined in the Pledge Agreement) of Common Stock of the
Lender as contemplated therein;

      (c) The Borrower has delivered the stock certificates of the Pledged
Shares, power of attorney, and written commitment regarding vested options to
the Lender as provided for in the Pledge Agreement;

      (d) The Borrower has executed and delivered the Deed of Trust with
Assignment of Rents as additional security provided by the Borrower in favor of
a title company reasonably acceptable to Lender (the "Title Company"), for the
benefit of the Lender, dated as of the date hereof, in substantially the form
attached hereto as Exhibit C, although the form attached hereto will be modified
if the Loan is not a first priority lien on the Principal Residence (the "Deed
of Trust"), to the Lender (or, at the Lender's option, to the Title Company as
escrow agent);

      (e) If the Deed of Trust is junior to other deeds of trust on the
Principal Residence, the combined amounts of each of the deeds of trust on the
Principal Residence at the Closing must not be greater than the value of the
appraisal of the Principal Residence;

      (f) The Borrower has delivered to the Lender both (i) a pro forma title
insurance policy, in form and substance satisfactory to the Lender, issued by
the Title Company (the "Pro Forma") and (ii) evidence that the Title Company is
unconditionally and irrevocably committed to issue to the Lender a title
insurance policy in the form of the Pro Forma dated as of the date of Closing;

      (g) The Borrower has entered into escrow instructions with the Title
Company, in form and substance satisfactory to the Lender, with respect to
closing the Loan;

      (h) The Lender has received an appraisal of the Principal Residence from
an appraiser selected or approved by the Lender stating the fair market value of
the Principal Residence, as of date of execution of the purchase and sale
agreement for the Principal Residence, to be not less than the amount required
by this Agreement, and in form and substance otherwise reasonably satisfactory
to Lender;

      (i) The Borrower has obtained hazard insurance on the Principal Residence;

      (j) The Borrower has received in escrow the grant deed from the seller of
the Principal Residence;

      (k) The Lender has received a UCC search report with respect to both
William McGlashan and his spouse, which shall confirm that there are no security
interests, encumbrances or liens on any Collateral (as defined by the Pledge
Agreement); and

      (l) The Lender shall have been notified at least five business days prior
to the anticipated Closing of the date on which such Closing will occur.

      4. Events of Default. Each of the following events shall constitute an
event of default for the purposes of this Agreement (each, an "Event of

      (a) any failure to make any payment as required under the Note;

      (b) any breach by the Borrower of the Deed of Trust; or

      (c) any breach by the Borrower of the Pledge Agreement.

      5. Disbursement. Within two business days following its receipt of
Borrower's notice of the Closing date as described in Section 3(l), Lender shall
deliver to Borrower a notice stating that all Conditions Precedent have been
satisfied or waived, or, in the alternative, identifying with particularity any
Conditions Precedent that remain in effect. Provided that all of the Conditions
Precedent have been satisfied or waived, as the Lender shall determine, the
Lender shall disburse the proceeds of the Loan to Title Company for payment of
the purchase price of the Principal Residence at Closing. The Borrower shall be
responsible for all other buyer's Closing costs and expenses.

      6. Subordination of Deed of Trust. Provided that Borrower is not in
default under the Deed of Trust, Lender shall, on written request of Borrower,
subordinate the Deed of Trust to the lien of a new deed of trust or deeds of
trust (i) securing a loan obtained by Borrower for the sole purpose of paying
the hard and soft costs of construction of new or remodeled improvements upon
the Principal Residence, and (ii) securing a loan for the difference, if any,
between the Loan amount and the purchase price of the Principal Residence. The
aggregate amount of the foregoing loans to which the Deed of Trust shall be
subordinated shall not exceed $6,000,000.

      7. Replacement of Principal Residence. The Loan shall be due upon sale of
the Principal Residence, except that Borrower may elect to apply the Loan
proceeds to the purchase of a replacement principal residence and to substitute
the security of the Deed of Trust with the lien of a new Deed of Trust upon the
replacement personal residence, provided that such replacement personal
residence and the purchase thereof satisfies all other terms and conditions of
Section 2 and Section 3.

       8. Notices. All notices shall be deemed sufficiently given on the next
business day following the day on which the same have been sent by a recognized
national overnight courier service for delivery on the next business day at the
respective addresses set forth below. Such parties may, by notice given
hereunder, designate any different addresses to which subsequent notices,
certificates or other communications shall be sent.

            Critical Path, Inc.
            350 The Embarcadero
            San Francisco, CA 94105
            Attn: General Counsel


            William McGlashan

            With copy to:
            Karen Wentzel, Esq.
            Ritchey Fisher Whitman & Klein
            1717 Embarcadero Road
            Palo Alto, CA 94303

            Facsimile:  (650) 857-1288

      9. Counterparts. This Agreement may be executed in any number of
counterparts and each such duplicate original shall be deemed to be an original.

      10. Headings. The headings of the Paragraphs and sub-paragraphs herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.

      11. No Third-Party Beneficiary. The provisions of this Agreement are for
the benefit only of the parties hereto, and their respective successors or
permitted assigns and no third party may seek to enforce, or benefit from, these
provisions. The parties specifically disavow any desire or intention to create
any third party beneficiary hereunder, and specifically declare that no person
or entity, except for the parties hereto, shall have any right hereunder nor any
right of enforcement hereof.

      12. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns.

      13. Attorney Fees. In the event of any action, suit or other proceeding
concerning the negotiation, interpretation, validity, performance or breach of
this Agreement, the prevailing party or parties in such proceeding shall be
entitled to recover all of such party's reasonable attorneys fees, expenses and
costs, not limited to costs of suit, incurred in each and every such action,
suit or other proceedings, including any and all appeals or petitions relating

      14. Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California.

      15. Authority. Each party hereto warrants that the person signing below is
authorized to sign this Agreement on its behalf and to bind it to the terms of
this Agreement. Should any provision of this Agreement be held by a court of
competent jurisdiction to be invalid or illegal, such invalidity or illegality
shall not invalidate the whole of this Agreement, but, rather, the Agreement
shall be construed as if it did not contain the invalid or illegal part, and the
rights and obligations of the parties shall be construed and enforced

                  [remainder of page intentionally left blank]

      IN WITNESS WHEREOF, Lender and Borrower have duly executed and delivered
this Agreement under seal as of the day and year first above written.


                              CRITICAL PATH, INC., a California corporation

                              By:  /s/Michael Zukerman


                                WILLIAM MCGLASHAN

                              By:  /s/ William McGlashan


                              MARIE MCGLASHAN

                              By: /s/ Marie McGlashan

                                    EXHIBIT A
                         FORM OF SECURED PROMISSORY NOTE
                        (attached as a separate document)
                                    EXHIBIT B
                              FORM OF DEED OF TRUST
                        (attached as a separate document)
                                    EXHIBIT C
                            FORM OF PLEDGE AGREEMENT
                        (attached as a separate document)