Exhibit 10.1

 

 

SECURED LOAN AGREEMENT

 

 

BETWEEN:

 

 

AND

FRASERSIDE HOLDINGS LIMITED

AND

PRIVATE MEDIA GROUP INC.

AND

PEACH ENTERTAINMENT DISTRIBUTION AB

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SECURED LOAN AGREEMENT

 

 

THIS AGREEMENT is effective on the 30th day of January 2013

BETWEEN:

 

(1) ______________________ with offices at ___________________, (hereinafter
referred to as the “Lender ”)

AND

 

(2a)

Fraserside Holdings Limited, a company registered in Cyprus with registration
number HE109390 and with registered address at 23 Themistokli Dervis Street,
STADYL House, 5th floor, 1066 Nicosia, Cyprus (hereinafter referred to as the
“Borrower”)

AND

 

(2b) Private Media Group Inc, a company registered in Nevada, U.S.A., with
European headquarters at Marina 16-18, Floor 18, Suite D, 08005 Barcelona, Spain
(hereinafter referred to as “Private” and “the Borrower”)

AND

 

(2c) Peach Entertainment Distribution AB, a company registered in Sweden with
address at Starrsbackgatan 3, 17274 Sundbyberg Sweden (hereinafter referred to
as “the Borrower”)

All parties under 2 are also called “the Borrowers” or, if applicable
“Guarantors”.

All parties under 2 are jointly and severable liable as Borrower and as
Guarantor.

 

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WHEREAS Private is the parent company of parties 2a and 2c; Private is
restructuring its finances.

WHEREAS Private needs working capital and will enter into three loan agreements,
including this one, with three different parties all giving the same 1st in rank
collateral, as described in this contract, together with its subsidiaries, to
the Lenders involved.

WHEREAS at the request of the Borrower and the Guarantor, the Lender has agreed
to advance to the Borrower the sum of EUR ___,000 (________________ thousand
euro) as a loan subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the promises and mutual covenants set forth
herein and for good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:

 

1 Definitions and Interpretation

 

1.1 In this Agreement, unless the context requires otherwise:

 

1.1.1    “Agreement”    means this agreement as may be amended in accordance
with the provisions of this agreement; 1.1.2    “Business Day”    means a day on
which banks are commonly open for business in Cyprus; 1.1.3    “EUR” or “€”   
denotes euro, the single currency of the European Economic and Monetary Union;
1.1.4    “Event of Default”    is defined in clause 6.2;

 

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1.1.5    “Finance Documents”    means this Agreement and the Security Agreement;
1.1.6    “Loan”    means the loan referred to in clause 0 below, or the amount
of it for the time being outstanding; 1.1.7    “Parties”    means the parties to
this Agreement, or any of them, as the context may require and “Party” shall be
interpreted accordingly; 1.1.8    “Obligors”    means jointly the Borrower and
the Guarantor; 1.1.9    “Security Agreement”    has the meaning provided in
clause 10.1; and 1.1.10    “Surety”    means any Guarantor, and any person
giving a guarantee or security under any of the Security Agreement.

 

1.2 In this Agreement, unless the context requires otherwise:

 

  (a) a document expressed to be in the “agreed form” means a document in a form
which has been agreed by the parties on or before the execution of this
Agreement and signed or initialled by them or on their behalf, for the purposes
of identification;

 

  (b) references to a clause or Schedule are to a clause of, or a Schedule to,
this Agreement;

 

  (c) references to this Agreement or any other document or to any specified
provision of this Agreement or any other document are to this Agreement, that
document or that provision as in force for the time being and as amended from
time to time in accordance with the terms of this Agreement or that document or,
as the case may be, with the agreement of the relevant parties;

 

  (d)

references to any enactment (meaning any law or statutory provision or any other
subordinate legislation or regulations made under any statute or statutory
provision) shall

 

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be construed as references to:

 

  (i) any enactment which that enactment has directly or indirectly replaced
(whether with or without modification); and

 

  (ii) that enactment as re-enacted, replaced or modified from time to time,
whether before, on or after the date hereof,

provided that this clause 1.2(d) shall not subject any party to a greater burden
than that which would apply at the date of this Agreement.

 

2 Loan

The Lender agrees to lend to the Borrower and the Borrower agrees to borrow from
the Lender the aggregate sum of EUR ____,000 (____________ thousand euros) on
January 30th, 2013 subject to the terms of this Agreement (hereinafter called
the “Loan”).

 

3 Interest

The Borrower shall pay interest on the Loan at the rate of 9.9% per annum,
calculated on the basis of a 365-day year and actual days elapsed. Interest
accrued shall be due and payable quarterly in arrears.

 

4 Repayment

Subject as provided in this Agreement, the Borrower shall repay the amount of
Loan in full on 31 December 2014.

 

5 Early repayment

The Borrower shall be entitled from time to time on giving to the Lender at any
time not less than 30 days’ notice in writing to repay the Loan or part of it
(but partial repayments must be at least EUR 50,000 and a whole multiple of
EUR1,000) and upon the expiration of the notice the Borrower shall be bound to
repay the Loan or the part of the Loan specified in the notice together with all
unpaid interest which has accrued on the amount so repaid.

 

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6 Immediate repayment

 

  6.1 Notwithstanding anything contained in this Agreement, the Loan and all
unpaid interest which has accrued under this Agreement, which has not been cured
within 15 business days, shall become immediately payable on demand if at any
time an Event of Default occurs:

 

  6.2 Each of the following shall constitute an “Event of Default”

 

  a. if the Borrower fails to pay any amount of interest due hereunder in the
manner and at the time and in the currency specified hereunder or fails to pay
any other amount due hereunder within 10 business days of its due date; or

 

  b. Other breaches

the Borrower commits any breach of or omits to observe of the other obligations
accepted or undertakings given in this Agreement; or

 

  c. Misrepresentation

any statement, representation or warranty made or deemed to have been made by
the Borrower in regard with this Agreement is incorrect in any material respect;
or

 

  d. Insolvency

the Borrower, is unable to pay its debts as they fall due, or makes a general
assignment for the benefit of or a composition with its creditors; or

a final court order is made or an effective resolution is passed for winding up
the Borrower or any Surety; or

the Borrower or any Surety has an administrator appointed; or

 

  e. the Borrower or any Surety ceases or threatens to cease to carry on its
business or substantially the whole of its business; or

 

  f. Order for winding-up

an application or an order is made or an effective resolution is passed for the
dissolution or winding-up of the Borrower or the Borrower shall convene a
meeting for the purpose of making, or proposes to enter into, any arrangement or
composition for the benefit of its creditors; or

 

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  g. Invalidity

at any time it becomes unlawful for the borrower to perform any or all of its
obligations under this agreement; or

 

  h. Encumbrances

an encumbrancer takes possession or a receiver is appointed of the whole or any
part of the assets of the borrower or a distress or execution is levied or
enforced upon or sued out against any of the chattels or property of the
borrower, over the sum of €50,000, and is not discharged within 15 business days
of being levied; or

 

  i. Disposal of assets

the Borrower transfers, distributes of disposes or, or threatens to dispose of,
all or substantially its assets, except by majority shareholder approval; or

 

  j. Other circumstances

Any circumstances arise which gives, based on objective and reasonable grounds
and on the balance of convenience, serious reasons for belief that the borrower
may not (or may be unable to) perform its obligations hereunder.

 

7 Guarantee

 

7.1 The Guarantor guarantees to the Lender the due payment by the Borrower of
all principal money and interest falling due under this Agreement and if and
whenever the Borrower defaults for more than 15 business days in the payment of
any such principal money or interest the Guarantor shall pay that amount to the
Lender on demand.

 

7.2 The liability of the Guarantor shall not be affected by any modification to
the terms of this Agreement (including, without limitation, any modification
increasing any amount payable or amending the date for payment) and shall extend
to all the obligations of the Borrower under this Agreement as so modified.

 

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7.3 The liability of the Guarantor shall be as a primary obligor and not merely
as a surety and shall not be impaired or discharged by reason of any time or
other indulgence granted by the Lender to the Borrower or by reason of any
arrangement entered into or composition agreed by or binding on the Lender
modifying (by operation of law or otherwise) the rights and remedies of the
Lender or by reason of any omission on the part of the Lender to enforce any of
its rights against the Borrower, or by any other matter or thing which, but for
this clause, might operate to do so at law or in equity.

 

7.4 This guarantee shall continue until the Loan and all interest falling due
under this Agreement have been paid.

 

8 Covenants

 

8.1 The Borrower covenants with the Lender that so long as any part of the Loan
or any interest due in respect of the Loan is outstanding (unless the Lender
agrees otherwise in writing and without limiting the right of the Borrower to
provide funds to the Guarantor) the Borrower will:

 

  8.1.1 carry on its business and undertaking in an efficient and business-like
manner and will not make any substantial alteration in the nature of such
business; and

 

  8.1.2 not sell or otherwise dispose of the whole or any substantial part of
its undertaking or of its assets.

 

8.2 The Guarantor covenants with the Lender that so long as any part of the Loan
or any interest due in respect of the Loan is outstanding it will furnish the
Lender with quarterly operational financial review reports relating to the
business of the Guarantor in such form as the Guarantor and the Lender may from
time to time agree.

 

8.3 The Borrower further covenants with the Lender that it will not enter into
or suffer to exist or become effective any agreement that prohibits or limits
the ability of any covered Party to create, incur, assume or suffer to exist any
additional liens without written approval from any covered Party.

 

9 Termination

The Lender may without prejudice to any of its other rights, terminate its
obligations under this Agreement and all outstanding repayment instalments of
the Loan together with all monies, costs and expenses payable by the Borrower
hereunder shall become repayable to the Lender and the

 

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Lender shall immediately become entitled to its remedies and actions hereunder
if any repayment of the Loan and/or any other amount to be paid under this
Agreement is not received within 30 days from the due date at the appointed
place of payment or if the Borrower commits a breach or makes default under any
other provision of this Agreement.

 

10 Security

 

10.1 The obligations of the Borrower to the Lender under this Agreement shall be
secured by the Agreement listed in Schedule 1 (“the Security Agreement”), when
executed. The execution of the Security Agreement shall constitute condition
precedents to the Lender’s obligations under this Agreement.

 

10.2 Within ten days from the signing of this Agreement, the Lender shall
provide to the Borrower evidence showing that this Agreement has been delivered
to the registrar of companies in Cyprus for filing, recordation and registration
(and that all applicable registration fees have been duly paid) and in
accordance with the requirements of section 90 of the Companies Law. Cap. 113 of
Cyprus (as amended).

 

11 Variation

Any variation of any term of this Agreement shall be in writing duly signed by
the Parties.

 

12 Notices

Any notice given pursuant to this Agreement shall be in writing and may be given
by sending the same by registered post or express courier service addressed to
the party concerned at its address as given in this agreement or at such other
address as such party may have notified in writing to the other parties hereto
for this purpose and any notice so given shall be deemed to have been served
forty-eight hours after it was posted or given to the courier service, as the
case may be.

 

13 Headings

All headings in this Agreement are inserted for convenience only and are in no
way intended to define or limit the scope or interpretation of this Agreement.

 

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14 Severability

The illegality, invalidity or unenforceability of any clause or part of this
Agreement will not affect the legality, validity or enforceability of the
remainder. If any such clause or part is found by any competent court or
authority to be illegal, invalid or unenforceable the parties agree that they
will substitute provisions in a form as similar to the offending provisions as
is possible without thereby rendering them illegal, invalid or unenforceable.

 

15 Waiver

The waiver by any Party of any default by any other Party in the performance of
any obligation of such other Party under this Agreement shall not affect such
Party’s rights in respect of any other default nor any subsequent default of the
same or of a different kind nor shall any delay or omission of any Party to
exercise any right arising from any default, affect or prejudice that Party’s
rights as to the same or any future default.

 

16 Entire Agreement

 

16.1 This Agreement constitutes the entire contractual relationship between the
Parties in relation thereto and there are no representations, promises, terms,
conditions or obligations between the Parties other than those contained or
expressly referred to therein. This clause does not restrict liability of either
Party for representations made fraudulently.

 

16.2 All terms and provisions of this Agreement are of the essence.

 

17 Counterparts

This Agreement may be executed in any number of counterparts and by the Parties
to it on separate counterparts, each of which when executed and delivered will
be an original.

 

18 Governing Law and Jurisdiction

 

18.1 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Agreement or of any term of this Agreement will be
governed by the law of the Republic of Cyprus.

 

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18.2 The courts of Cyprus will have exclusive jurisdiction to settle any dispute
which arises out of or in connection with this Agreement. The parties
irrevocably agree to submit to that jurisdiction.

IN WITNESS whereof this Agreement has been duly executed the day and year first
above written.

 

SIGNED for an on behalf of

     )      

_______________________________

     )       Represented by      )            )             ……………………………………
SIGNED for and on behalf      )       of Fraserside Holdings Limited      )   
   …………………………………… by Charles Prast      )       Director      )       SIGNED for
and on behalf      )       of Private Media Group Inc.      )      
…………………………………… by Charles Prast      )       CEO      )       SIGNED for and on
behalf      )       of Peach Entertainment       Distribution AB      )      
…………………………………… by Eric Johnson      )       Authorized Signature      )      

 

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SCHEDULE 1

Security

1. Fixed charge and assignment by way of charge of Borrower’s copyright,
trademark and license rights in specified videos.

2. The Security Agreement

 

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