[LOGO]
FORM OF
LOAN AND SECURITY AGREEMENT
Loan and Security Agreement made this 28th day of December, 1999, by and
between Entertainment Boulevard Inc., a Nevada corporation (the "Company"), and
_______, an individual (the "Investor").
W I T N E S S E T H :
WHEREAS, the Company desires to borrow certain amounts from the Investor
and the Investor desires to make a loan (the "Loan") to the Company;
NOW, THEREFORE, in consideration of the mutual promises, representations
and warranties contained herein, the parties hereby agree as follows:
1. LOAN. The Investor hereby lends to the Company the aggregate principal
amount of $100,000. The Loan shall be evidenced by a bridge note (the "Note") in
the form attached hereto as Exhibit A, shall bear interest at the rate of 10%
per annum and shall be due and payable 90 days from the date of funding, or
earlier as provided in the Note. In consideration for such Loan, the Company
will pay the Investor and/or its designee 40,000 warrants to purchase the common
stock of the Company at an exercise price of $1.00 per share (the "Payment
Warrants"). The common stock
underlying the Payment Warrants will be registered immediately with the
Securities and Exchange Commission.
2. CONDITIONS TO LOAN. The obligation of the Investor to make the Loan is
subject to the conditions that the following shall have occurred prior to or
concurrently with the Loan:
(a) Xxxxxxx Xxxxx, the Company's Chief Executive Officer and
President, shall have granted to the Investor, from his personal warrant
holdings, a valid security interest in 200,000 warrants to purchase the
Company's common stock with an exercise price of $1 pursuant to this agreement
dated the date hereof.
(b) The Company agrees to Register the common stock underlying the
Payment Warrants in a time-frame, which shall be reasonably acceptable to the
Investor.
3. GRANT OF SECURITY INTEREST. Xxxxxxx Xxxxx, the Company's Chief Executive
Officer and President, hereby grants to the Investor all of the right, title,
and interest in and to 200,000 warrants to purchase the Company's common stock
with an exercise price of $1 from his personal assets. Until such time as there
is an Event of Default, the Investor will not pursue the collateral described in
this Section 3.
4. REPRESENTATIONS OF THE COMPANY. The Company represents and warrants to
the Investor as follows:
4.1. The issuance of the Note and the Payment Warrants pursuant to the
provisions of this Agreement has been duly and validly authorized. No approval
or authorization of the shareholders or the directors of the Company or of any
governmental authority or agency which has not been obtained will be required by
the Company for the issuance of the Note or the Payment Warrants,
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as contemplated by this Agreement. When the Payment Warrants are exercised, the
common stock underlying the Payment Warrants will be duly and validly issued and
will be free and clear of any liens or encumbrances created by the Company.
4.2 The Company has the full corporate power and authority to enter
into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement and the Note by the
Company have been duly authorized by all necessary corporate action. This
Agreement and the Note constitute legal, valid and binding obligations of the
Company enforceable in accordance with their respective terms.
4.3 Neither the issuance of the Note, the Payment Warrants, the
execution and delivery of this Agreement, nor the fulfillment of the terms set
forth in this Agreement and the consummation of the transactions contemplated by
this Agreement, will (i) conflict with or constitute a breach of, or constitute
a default under or an event which, with or without notice of lapse of time or
each, would be a breach of or default under or violation of the Certificate of
Incorporation or By-Laws of the Company or would be a breach of or default under
or violation of any agreement, document, lease or other instrument or
undertaking by which the Company is bound or to which any of its properties are
subject, would be a violation of any law, administrative regulation, judgment,
order or decree applicable to the Company, or (ii) subject to the listing
approval requirements of the OTC Stock Market, require the consent which has not
been obtained of any other person or entity under any agreement, lease, document
or other instrument or undertaking by which the Company is bound or to which any
of its properties are subject.
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4.4 The security interest in 200,000 warrants to purchase the
Company's common stock with an exercise price of $1.00 from Xxxxxxx Xxxxx'x
personal assets (the "Asset") granted pursuant to Section 3 hereto constitutes a
valid security interest in the Asset.
5. REPRESENTATIONS OF THE INVESTOR. The Investor understands that the
common stock underlying the Payment Warrants has not been registered under the
Securities Act of 1933 (the "Securities Act"). The Investor is an accredited
investor within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act. The Investor is acquiring the Payment Warrants for his own
account and not with a present view to, or for sale in connection with, any
distribution in violation of the Securities Act. The Investor acknowledges that
a restrictive legend will be placed on the common stock underlying the Payment
Warrants until the shares are registered under the Securities Act.
6. COVENANTS OF THE COMPANY. The Company covenants with the Investor as
follows:
(a) The proceeds of the Loan will be used for working capital and
general corporate purposes.
7. SURVIVAL. All representations, warranties, covenants and agreements
contained in this Agreement or in any document, exhibit, schedule or certificate
delivered in connection herewith shall survive the execution and delivery of
this Agreement and the closing of the Loan and any investigation at any time
made by the Investor or on his behalf.
8. MISCELLANEOUS PROVISIONS.
8.1. This Agreement shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of California without giving
any effect to principles of conflicts of laws.
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8.2. All notices hereunder shall be in writing and shall be deemed to
have been given at the time when mailed by certified mail, addressed to the
address below stated of the party to which notice is given, or to such changed
address as such party may have fixed by notice:
To the Company:
Entertainment Boulevard, Inc.
0000 Xxx Xxx Xxxxxx
Xxxxx 000
Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
To the Investor:
[Investor Name]
[Investor Address]
provided, however, that any notice of change of address shall be effective only
upon receipt.
8.3. This Agreement shall be binding upon and inure to the benefit of
the Company, the Investor and the successors and assigns of the Investor. The
Company may not assign this Agreement without the prior written consent of the
Investor. The Investor may assign all or any part of his rights and obligations
hereunder to any affiliate of the Investor, without the consent of the Company.
8.4. This Agreement and all exhibits and schedules hereto set forth
the entire understanding of the parties with respect to the transactions
contemplated hereby. This Agreement may be amended, the Company or the Investor
may take any action herein prohibited or omit to take action herein required to
be performed by it or him, and any breach of or compliance with any covenant,
agreement, warranty or representation may be waived, only if the Company or the
Investor has obtained the written consent of the other party to this Agreement.
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8.5. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
8.6. The headings in this Agreement are for reference purposes only
and shall not constitute a part hereof.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
ENTERTAINMENT BOULEVARD, INC.
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By: Xxxxxxx Xxxxx
Title: Chairman of the Board
[Investor Name]
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By: [Investor Name]
Title: Investor
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EXHIBIT A
[LOGO]
FORM OF
SECURED BRIDGE NOTE
$100,000 December 28, 1999
FOR VALUE RECEIVED, Entertainment Boulevard, Inc. (the "Maker"), hereby
promises to pay to the order of [Investor Name]. (the "Payee"), [Investor
address] or at such other place as the Payee may designate in writing, in lawful
money of the United States of America, the principal sum of one hundred thousand
dollars ($100,000) together with interest from the date hereof at the rate of
10% per annum, computed on the basis of a 360-day year of twelve 30-day months.
The principal of this Note shall be payable in full 90 days from the date
hereof. Interest shall accrue from the date hereof and shall be paid when the
principal amount of this Note has been paid in full.
The occurrence of any one or more of the following events shall constitute
an Event of Default under this Note: (i) the failure to pay principal of or
interest on this Note as and when due; (ii) any representation or warranty of
the Maker contained in the Loan and Security Agreement dated as of the date
hereof between the Maker and the Payee shall not be true and correct in all
material respects and the same shall not be cured within 30 days after written
notice thereof by the Payee to the Maker or the Maker shall have breached any
covenant contained in the Loan and Security Agreement and such
breach shall not be cured within 30 days; (iii) a proceeding being filed or
commenced against the Maker for bankruptcy, dissolution or liquidation which
shall not be dismissed within 60 days, or the Maker voluntarily or involuntarily
terminating or dissolving or being terminated or dissolved; (iv) the Maker
filing a petition under bankruptcy, insolvency or debtor's relief law or making
an assignment for the benefit of creditors; or (v) the appointment of a
custodian, trustee, liquidator or receiver for any of the property of the Maker,
which shall not be dismissed, released or vacated within 60 days.
The Maker agrees that in an Event of Default under this Note, then all or
any part of the unpaid principal balance of and interest on this Note shall
immediately become due and payable without notice or demand. If an Event of
Default occurs, the Maker agrees to pay to the holder all reasonable expenses
incurred by the holder, including reasonable attorneys' fees, in enforcing and
collecting this Note.
Failure of the Payee hereof to assert any right contained herein will not
be deemed to be a waiver thereof.
In the event any one or more of the provisions of this Note shall for any
reason be held to be invalid, illegal or unenforceable, in whole or in part or
in any respect, or in the event that any one or more of the provisions of this
Note operate to invalidate this Note, then and in either of those events, such
provision or provisions only shall be deemed null and void and shall not affect
any other provision of this Note and the remaining provisions of this Note shall
remain operative and in full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.
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The Maker hereby forever waives presentment, presentment for payment,
demand, protest, notice of protest, notice of dishonor of this Note and all
other demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note.
This Note may be prepaid in whole or in part at any time and from time to
time without premium. This Note shall be paid without deduction by reason of any
set-off, defense or counterclaim of the Maker.
This Note is secured pursuant to the terms of the Loan and Security
Agreement.
This Note shall be governed by and construed and enforced in accordance
with the internal laws of the State of California without giving any effect to
principles of conflicts of laws. This Note shall be binding upon the successors
and assigns of the Maker and shall inure to the benefit of the successors and
assigns of Payee.
ENTERTAINMENT BOULEVARD, INC.
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By: Xxxxxxx Xxxxx
Title: Chairman of the Board
Chief Executive Officer
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