EXHIBIT 10.20
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FORM OF
STOCK LOAN AND PLEDGE AGREEMENT
DATED AS OF OCTOBER __, 1996
BETWEEN
METRO NETWORKS, INC.
AND
XXXXX X. XXXXXXXXXX
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TABLE OF CONTENTS
STOCK LOAN AND PLEDGE AGREEMENT
PAGE
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1. Loan of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Collateral. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Delivery of Collateral Securities. . . . . . . . . . . . . . . . . 1
2.2 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . 1
3. Obligations of Lender; Distributions. . . . . . . . . . . . . . . . . . 2
3.1 Obligations of the Lender with Respect to the Collateral . . . . . 2
3.2 Right of Borrower in Respect of Loaned Securities. . . . . . . . . 2
3.3 Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Term of Loan; Return of Loaned Securities . . . . . . . . . . . . . . . 3
4.1 Term of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.2 Return of Loaned Securities. . . . . . . . . . . . . . . . . . . . 3
5. Loan Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. Remedies of Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7.1 Rights of Secured Creditor . . . . . . . . . . . . . . . . . . . . 5
7.2 Calculation of Unpaid Remedy Amount. . . . . . . . . . . . . . . . 5
7.3 Setoffs of Collateral. . . . . . . . . . . . . . . . . . . . . . . 6
7.4 No Counterclaim, Waiver, etc.. . . . . . . . . . . . . . . . . . . 6
7.5 No Rights Against Transferees. . . . . . . . . . . . . . . . . . . 7
8. Transfer Taxes and Other Costs of Transfer. . . . . . . . . . . . . . . 7
9. Representations, etc. of Lender and Borrower. . . . . . . . . . . . . . 7
9.1 Representations of Lender. . . . . . . . . . . . . . . . . . . . . 7
9.2 Representations, Warranties and Covenants of the Borrower. . . . . 7
10. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
11. Payments, Deliveries, Notices . . . . . . . . . . . . . . . . . . . . . 8
12. Deliveries to Custodian; Lender's Right to Appoint Agents . . . . . . . 9
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13. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 9
14. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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STOCK LOAN AND PLEDGE AGREEMENT
STOCK LOAN AND PLEDGE AGREEMENT, dated as of October __, 1996 (the
"AGREEMENT"), between Metro Networks, Inc. (the "LENDER") and Xxxxx X.
Xxxxxxxxxx (the "BORROWER"). Capitalized terms used herein and not otherwise
defined are used as defined in Section 13.
The Lender and the Borrower agree as follows:
1. LOAN OF SHARES. Subject to the terms and conditions hereof, the
Lender agrees to lend (the "LOAN") to the Borrower and the Borrower agrees to
borrow from the Lender on the date hereof (the "LOAN DATE") ______ shares of
Common Stock (the "LOANED SHARES") of Metro Networks, Inc., a Delaware
corporation (the "COMPANY"), represented by the stock certificates identified on
Schedule A attached hereto, together with all securities which are distributed
by the Company with respect to the Loaned Shares, or are received in exchange
for the Loaned Shares in connection with a merger, recapitalization or
reorganization involving the Company (collectively, the "LOANED SECURITIES").
The transfer of the Loaned Shares from the Lender to the Borrower shall be
reflected on the share register of the Company.
2. COLLATERAL.
2.1 DELIVERY OF COLLATERAL SECURITIES. The Borrower is concurrently
delivering to the Custodian a number of shares of Series A Convertible Preferred
Stock of the Company equal to the number of Loaned Shares (the "PLEDGED
SHARES"), represented by the stock certificates identified on Schedule B
attached hereto, and shall deliver the upfront fee set forth in Section 5
hereof. The Pledged Shares shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Lender and the Custodian.
2.2 GRANT OF SECURITY INTEREST. To secure the due and punctual
performance of the obligations of the Borrower under this Agreement, the
Borrower hereby grants to the Lender a first lien on and security interest in
the Pledged Shares and all securities which are distributed by the Company with
respect thereto, or are received in exchange for any of the foregoing in
connection with a merger, recapitalization or reorganization involving the
Company (collectively the "COLLATERAL SECURITIES"), PROVIDED that Collateral
Securities shall not include any securities returned to the Borrower pursuant to
Section 3.1 or 4.2. The Borrower recognizes that the Collateral Securities will
be held by, or on the books and records of, the Custodian or
other agents of the Lender or one or more financial intermediaries to perfect
the Lender's security interest therein. Except for the security interests
granted hereby, the Borrower shall not create or suffer to exist any security
interest, lien or encumbrance in respect of any Collateral Securities.
3. OBLIGATIONS OF LENDER; DISTRIBUTIONS.
3.1 OBLIGATIONS OF THE LENDER WITH RESPECT TO THE COLLATERAL. The
Lender shall cause the Custodian to record on its books all Collateral
Securities delivered to it, and to keep the Collateral Securities identifiable.
The Lender shall cause the Custodian not to commingle the Collateral Securities
with the Custodian's or the Lender's other assets or assets of the Custodian's
other custodial clients or any collateral delivered by other borrowers. The
Lender shall not, and shall cause the Custodian not to, use, invest, transfer,
lend or pledge the Collateral Securities, except as permitted by Section 7.1 or
7.3. The Lender shall cause the Custodian to vote the Collateral Securities in
accordance with the instructions of the Borrower, so long as no Event of Default
has occurred and is continuing.
Except as otherwise expressly provided herein, the sole obligations of
the Lender in respect of the Collateral Securities are to return to the Borrower
all Collateral Securities at the termination of the Loan, in accordance with and
subject to the provisions of Section 4.2 (against return of the Loaned
Securities), and, so long as no Event of Default has occurred and is continuing,
to pay over or deliver to the Borrower, in accordance with its instructions to
the Lender, all Distributions received by the Custodian with respect to
Collateral Securities.
3.2 RIGHT OF BORROWER IN RESPECT OF LOANED SECURITIES. Except as set
forth in Section 3.3, until the Loaned Securities are required to be redelivered
to the Lender upon termination of the Loan, the Borrower shall have all the
incidents of ownership of the Loaned Securities, including the right to transfer
the Loaned Securities to others and to have the Loaned Securities transferred to
any person on the share register of the Company, including, without limitation,
in connection with an initial public offering of the Common Stock, but in the
event the Borrower shall so transfer the Loaned Securities to any other person,
the Borrower shall not be relieved of its obligations under Section 4.2 to
return the Loaned Securities (or an equivalent quantity of securities of the
same class and issuer). The Lender hereby waives the right to vote or to
provide any consent or to take any similar action with respect to the Loaned
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Securities in the event that the record date or deadline for such vote, consent
or other action falls during the term of the Loan.
3.3 DISTRIBUTIONS. If any Distribution on any Loaned Securities
shall be made, and the record or other date for determining the security holders
entitled to receive such Distribution shall be on or after the delivery of such
Loaned Securities to the Borrower and any necessary registration of transfer in
connection therewith, but before the return of such Loaned Securities to the
Lender and any necessary registration of transfer in connection therewith, the
Borrower shall on the date for such distribution, and whether or not the same is
actually received by the Borrower, pay to the Custodian for the benefit of the
Lender such cash, and shall deliver to the Custodian for the benefit of the
Lender such property (other than securities), as shall have been included in
such Distribution. Any securities included in a distribution shall be added to
the Loaned Securities on the date for such distribution and shall thereupon for
all purposes constitute Loaned Securities delivered under the Loan.
4. TERM OF LOAN; RETURN OF LOANED SECURITIES.
4.1 TERM OF LOAN. The Loan shall terminate on the first to occur of
(a) three business Days after written or telephone notice of demand,
given to the Borrower by the Lender or the Custodian, for the return of any
Loaned Securities;
(b) any termination of the Loan pursuant to Section 6; and
(c) the tenth anniversary of the date hereof.
4.2 RETURN OF LOANED SECURITIES. Upon termination of the Loan, the
Borrower shall deliver the Loaned Securities (or an equivalent quantity of
securities of the same class and issuer) to the Custodian, together with all
Distributions thereon (i) which shall not have previously been paid over to the
Custodian pursuant to Section 3.3 and (ii) with respect to which the record or
other date for determining the security holders entitled to receive payment or
distribution thereof shall have occurred prior to the return of the Loaned
Securities (or such equivalent securities) to the Custodian and any necessary
registration of transfer in connection therewith, except that if any such
Distributions shall not have been made prior to such time, the Borrower shall
deliver such distributions to the Custodian immediately upon the making thereof,
whether or not the
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same is actually received by the Borrower. Delivery of Loaned Securities (or
such equivalent securities) by the Borrower in accordance with the first
sentence of this Section 4.2 shall be made against return of Collateral
Securities to the Borrower, PROVIDED, HOWEVER, that if an Event of Default shall
have occurred and be continuing, such Collateral Securities shall not be
returned to the Borrower, despite the return of such Loaned Securities (or such
equivalent securities), and all Collateral Securities shall be subject to all of
the terms and conditions hereof until such Event of Default shall have been
cured or waived.
5. LOAN FEE. In consideration of the Loan, the Borrower shall pay
to the Lender during the term of the Loan annually on each anniversary date of
this Agreement and on any termination of the Loan pursuant to Section 4.1, an
annual loan fee (the "LOAN FEE") equal to 0.10% of the average Value of the
Loaned Securities during the five day trading period (E.G., any day on which
trading takes place in the NASDAQ national market) following the Loan Date.
One-half of this fee will be paid on an annual basis and one-half will be paid
upon the termination of the Loan but the deferred portion shall only be payable
if such termination occurs pursuant to Section 4.1(b) or (c) hereof. In the
event of a termination pursuant to Section 4.1(b), the Loan Fee shall be
prorated on the basis of the number of months (including any portion of a month)
that have elapsed since the Loan Date or the date of the immediately preceding
payment of a portion of the Loan Fee. In addition, the Borrower will pay the
Lender an upfront fee of $____________ payable on the date hereof.
6. EVENTS OF DEFAULT. If any of the following events ("EVENTS OF
DEFAULT") shall occur,
(a) the Borrower shall fail in any material respect to perform or
observe any term hereof; or
(b) any representation or warranty made by the Borrower herein shall
have been untrue when made in any material respect and the Lender notifies
the Borrower that such untruth is to constitute an Event of Default; or
(c) the Borrower shall (i) file, or consent by answer or otherwise to
the filing against it of, a petition for relief, reorganization,
rehabilitation, arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency or
rehabilitation law of any jurisdiction,
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(ii) make an assignment for the benefit of creditors, (iii) consent to the
appointment of a custodian, receiver, trustee, rehabilitator or other
officer with similar powers of either or both of itself or of any
substantial part of its property, (iv) be adjudicated insolvent or be
liquidated or (v) take action for the purpose of any of the foregoing; or
(d) a court or governmental authority of competent jurisdiction shall
enter an order appointing, without the consent of the Borrower, a
custodian, receiver, trustee, rehabilitator or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or if any order for relief shall be entered in any case or
proceeding for liquidation or reorganization or otherwise to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Borrower, or if any petition
for any such relief shall be filed against the Borrower.
then, unless otherwise specified by the Lender to the Borrower in writing, the
loan shall terminate immediately without any further notice by the Lender.
7. REMEDIES OF LENDER.
7.1 RIGHTS OF SECURED CREDITOR. If any Event of Default shall have
occurred and be continuing, the Lender shall have all the rights and remedies,
with respect to all Collateral Securities, of a secured party under Articles 8
and 9 of the Uniform Commercial Code of the State of New York in effect at that
time and as otherwise provided by law, and, in addition, may, at its sole
option, exercise, or cause the Custodian to exercise on its behalf, any one or
more of the remedies described in Sections 7.3 and 7.4.
7.2 CALCULATION OF UNPAID REMEDY AMOUNT. If any Event of Default
shall have occurred and be continuing, the Borrower will pay in cash to the
Custodian the "Unpaid Remedy Amount", which shall be equal to the sum of the
following amounts:
(a) the Value as of such time of the Loaned Securities other than any
Loaned Securities (or their equivalent) previously returned to the Lender;
(b) all taxes, fines, penalties or interest incurred by the Lender,
the Custodian or any other agent
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of the Lender as a result of the Borrower's failure to perform its
obligations hereunder, including (without limitation) the Borrower's
obligation to return Loaned Securities (or equivalent securities) as
provided by Section 4.2;
(c) any unpaid Loan Fee or other unpaid amounts (in the form of cash
or otherwise) owing to the Lender under this Agreement;
(d) any amounts not included in clauses (a) through (c) of this
Section 7.2 which are owing pursuant to Xxxxxxx 0, 0, 0, 0 xx 00; and
(e) interest on each of the foregoing amounts until payment thereof
in full has been made, to accrue daily at an annual rate equal to 2% above
the amount announced by Citibank, N.A. as its "prime" rate (its "PRIME
RATE"), as in effect from time to time (such rate to be adjusted
simultaneously with each change in such prime rate);
minus the aggregate Value of Collateral Securities absolute ownership of which
has been assumed by the Lender under Section 7.3 (which ownership is not subject
to any judicial or statutory stay against enforcement).
7.3 SETOFFS OF COLLATERAL. If any Event of Default shall have
occurred and be continuing, including, but not limited to, the Borrower's
failure to return the Loaned Securities (or their equivalents) in accordance
with Section 4.2, the Lender or the Custodian may, at any time and in the
Lender's sole discretion, set off all or any portion of the Collateral
Securities against any Unpaid Remedy Amount (or a portion thereof) as of such
time, by assuming absolute ownership of all or a portion of the Collateral
Securities, and, at the discretion of the Lender, selling any or all of such
Collateral Securities and assuming absolute ownership of the proceeds, PROVIDED
that the Value of the Collateral Securities absolute ownership of which is so
assumed does not exceed the Unpaid Remedy Amount as of the time of such
assumption of ownership.
7.4 NO COUNTERCLAIM, WAIVER, ETC. The Lender's rights against the
Collateral Securities shall be absolute and subject to no counterclaim, offset,
recoupment, deduction or defense in favor of the Borrower, whether such
counterclaim, offset, recoupment, deduction or defense relates to the Lender or
the Custodian. No failure on the part of the Lender or the Custodian to
exercise, and no delay on its part in exercising, any right, power or remedy
hereunder shall operate as a waiver
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thereof, nor shall any single or partial exercise by the Lender or the Custodian
of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies
provided herein are cumulative and are not exclusive of any remedies provided by
law.
7.5 NO RIGHTS AGAINST TRANSFEREES. In no event shall the Lender have
any rights against any transferee of the Loaned Securities (or any further
transferees thereof) or against any Loaned Securities so transferred. The
Borrower agrees that this Section 7.5 is for the benefit of transferees and may
be enforced thereby as if such transferees were parties to this Agreement.
8. TRANSFER TAXES AND OTHER COSTS OF TRANSFER. The Borrower shall
be responsible for, and shall pay or reimburse the Lender for, all transfer
taxes and other costs involved in all transfers of Loaned Securities or
Collateral Securities between the Lender or the Custodian, on the one hand, and
the Borrower, on the other hand. In connection with deliveries hereunder, the
Borrower shall execute all appropriate transfer tax exemption certificates.
9. REPRESENTATIONS, ETC. OF LENDER AND BORROWER.
9.1 REPRESENTATIONS OF LENDER. The Lender represents that (a) the
Lender has the legal right and authority to execute, deliver and perform this
Agreement, and no disability or contractual obligation exists which would
prohibit the Lender from so doing; (b) the Lender has obtained all necessary
approvals or authorizations by all regulatory bodies and other third parties
required to be obtained by the Lender to consummate the transactions
contemplated hereby; (c) the execution and delivery of this Agreement by the
Lender complies, and all transactions by the Lender contemplated hereby will
comply, with all applicable laws and regulations applicable to the Lender,
including, without limitation, all rules and regulations of the Securities and
Exchange Commission, and will not be in violation of any of the foregoing; (d)
when transferred to the Borrower pursuant hereto, the Loaned Securities shall be
transferred free and clear of any security interests, liens or encumbrances, and
(e) the Loaned Securities are validly issued, fully paid and nonassessable.
9.2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER. The
Borrower represents, warrants and covenants to the Lender that (a) the Borrower
has the legal right and authority to execute, deliver and perform this Agreement
and no disability or contractual obligation exists which would prohibit
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the Borrower from so doing; (b) the Borrower has obtained all necessary
approvals or authorizations by all regulatory bodies and other third parties to
consummate the transactions contemplated hereby; (c) the execution and delivery
of this Agreement complies, and all transactions contemplated hereby will
comply, with all applicable laws and regulations, including, without limitation,
all rules and regulations of the Securities and Exchange Commission, and will
not be in violation of any of the foregoing; (d) the Collateral Securities are
owned by the Borrower free and clear of any security interests, liens or
encumbrances other than the liens contemplated hereby; and (e) the pledge of the
Collateral Securities pursuant to this Agreement creates a valid security
interest in the Collateral Securities in favor of the Lender and securing the
payment of the Loan.
10. INDEMNIFICATION. Except for taxes (other than transfer taxes),
the Borrower agrees to indemnify, defend and hold and save harmless the Lender
and the Custodian from any claims, actions, demands or lawsuits of any kind
whatsoever arising (a) in any way out of the use that the Borrower may make of
the Loaned Securities, or (b) out of transactions by the Lender involving the
purchase or sale of securities, but only to the extent that the liability
arising out of such transactions is due, in whole or in part, to the Borrower's
failure to perform its obligations in accordance with the terms of this
Agreement, including the Borrower's obligation to return the Loaned Securities
(or equivalent securities) within the time specified in Section 4.2, PROVIDED
that the Borrower shall not be required to indemnify the Lender or Custodian for
any claims, actions, demands or lawsuits as may be caused by the gross
negligence or willful acts of the Lender or the Custodian. The Borrower agrees
that the Custodian shall have the right to enforce its third party rights of
indemnification under this Section 10 directly against the Borrower.
11. PAYMENTS, DELIVERIES, NOTICES. All payments under this Agreement
between the parties hereto shall be made by (a) certified or official bank
check, or (b) wire transfer in immediately available funds to the account of the
payee or its designated agent.
Except as otherwise expressly provided herein, all notices, requests,
consents, and other communications hereunder between the Lender or the Custodian
and the Borrower shall be in writing and shall be deemed to have been given (a)
when delivered, if sent by hand or first class mail, postage prepaid, or (b)
when sent, if transmitted by facsimile. Each such notice or other communication
shall be addressed as follows:
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(i) if to the Borrower, at the address set forth after its signature
at the end of this Agreement, and
(ii) if to the Lender, at:
_____________________
_____________________
_____________________
Fax:
(iii) if to the Custodian, at:
_____________________
_____________________
_____________________
Fax:
or to such other addresses as either party may furnish the other party by
written notice under this Section 11.
12. DELIVERIES TO CUSTODIAN; LENDER'S RIGHT TO APPOINT AGENTS. The
Borrower agrees that at the time of giving any notice or making any deliveries
to the Custodian, the Borrower shall identify such notice or delivery as
relating to the Loan or a specific provision under this Agreement. The Borrower
acknowledges that the Custodian will be acting hereunder as the Lender's agent,
and not in its individual capacity.
The Borrower further acknowledges that the Lender may at any time
appoint such agent or agents as the Lender in its sole discretion may select to
perform any other functions on its behalf in connection with any provision of
this Agreement.
13. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms have the following respective meanings:
BUSINESS DAY: any weekday other than one which is not recognized as a
settlement day by the NASDAQ National Market, or on which banking institutions
are authorized or required to be closed in the State of New York.
COMMON STOCK: common stock, par value $0.001 per share, issued by the
Company.
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CUSTODIAN: Paul, Hastings, Xxxxxxxx & Xxxxxx LLP until such time as
the Lender shall give the Borrower notice of the Lender's appointment, as agent
for the Lender, of a different custodian for purposes of this Agreement.
DISTRIBUTION: with reference to any Loaned Securities or Collateral
Securities, any interest, dividend or other payment or distribution of cash,
securities, or other property with respect to such Loaned Securities, or any
option, warrant, right, privilege or other security of any kind distributed with
respect thereto or in exchange therefor.
SERIES A CONVERTIBLE PREFERRED STOCK: the Series A Preferred Stock,
par value $.001 per share, issued by the Company and convertible into Common
Stock.
VALUE: the Value at any time of any Loaned Securities or Collateral
Securities shall be determined as follows:
(a) if such Loaned Securities or Collateral Securities are
traded on one or more national securities exchanges, the Value thereof
shall be determined on the basis of the closing price on the preceding
Business Day on the consolidated tape as reported by the Wall Street
Journal, or such other pricing service as may be selected by the
Custodian and approved by the Lender; or
(b) if such Loaned Securities or Collateral Securities are not
traded on a national securities exchange, the Value thereof shall be
determined on the basis of the low asked price last quoted on the
preceding Business Day by any principal market maker for such Loaned
Securities or Collateral Securities chosen by the Custodian, PROVIDED
that if no such quotations shall be available for such day, such
market value shall be determined on the basis of the last low asked
price quoted on the next preceding day for which such quotations are
available.
To the market value of any Loaned Securities or Collateral Securities as
determined under the foregoing clauses (a) and (b), shall be added all interest
accrued, and all amortized discount, on such Loaned Securities or Collateral
Securities as of the close of the preceding Business Day, to the extent that
such accrued interest or amortized discount is neither reflected in the amounts
computed under clauses (a) or (b) nor has previously been paid to the Custodian.
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14. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties and supersedes any other oral or written
agreement between the parties concerning securities loans. The headings in this
Agreement are for convenience of reference only and shall not expand, limit or
otherwise affect the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument. This Agreement shall not
be assignable by either party without the prior written consent of the other
party, shall be binding upon and inure to the benefit of the parties and their
respective legal representatives, distributees and successors and permitted
assigns, may not be amended, changed, modified or terminated except by an
instrument in writing signed by each of the parties hereto, and shall be
governed by and construed in accordance with New York law (without giving effect
to principles of conflicts of laws).
LENDER BORROWER
By: _________________________ By ________________________
Name: Name:
Title: Title:
Address of Borrower
______________________
______________________
______________________
Fax:
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SCHEDULE A
# of Shares of Common
Common Stock Certificate # Stock Represented
-------------------------- ---------------------
SCHEDULE B
Series A Convertible
Preferred Stock # of Shares of Convertible
Certificate # Preferred Stock Represented
-------------------- ---------------------------
