3.2
FORM OF BRIDGE FINANCING NOTE AND
FORM OF BRIDGE LOAN AND SECURITY AGREEMENT
BRIDGE LOAN AND SECURITY AGREEMENT
Page 1 of 16
BRIDGE LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
XXXX XXXXXXXX, INC.
A CALIFORNIA CORPORATION
AND
, AN INDIVIDUAL
This BRIDGE LOAN AND SECURITY AGREEMENT (the "Agreement") is made this
day of , 1995, by and between
, an individual (the "Investor"), and Xxxx Xxxxxxxx, Inc., a
California Corporation ("Xxxxxxxx"). The Investor and Xxxxxxxx are referred to
collectively herein as the "Parties."
In consideration of the mutual covenants, agreements, representations,
and warranties contained in this agreement, the Parties agree as follows:
1. Loan Amount. The Investor agrees to loan, on , 1995, to Xxxxxxxx
the aggregate principal amount of $ (the "Loan"). The Loan will be
made for the purpose of paying normal and reasonable operating expenses and
obtaining and paying for professional services in connection with the offering
of securities of Xxxxxxxx.
2. Promissory Note. In consideration thereof, Xxxxxxxx will issue, cause to be
executed and deliver to the Investor, upon the execution hereof, a promissory
note in the principal amount equal to the amount of the Loan, upon the terms and
conditions specified herein, and in the form set forth in Exhibit A, hereto (the
"Note").
3. Periodic Finance Charges. All principal and interest then outstanding
shall bear interest at the lesser of fifteen (15%) percent per annum, or the
maximum legal rate.
4. Payments.
4.1 All interest outstanding shall be due and payable on a quarterly
basis, fifteen (15) days after the end of each calendar quarter.
4.2 Xxxxxxxx shall make payments of principal and accrued interest of
the Note to Investor upon the closing of any offering of securities by Xxxxxxxx,
regardless of whether such offering is registered with the Securities and
Exchange Commission or exempt from such registration (an "Offering"), or upon
the closing of a merger of Xxxxxxxx with or into another entity, or other such
change in control of Xxxxxxxx (a "Business Combination"), as follows:
BRIDGE LOAN AND SECURITY AGREEMENT
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Xxxxxxxx shall pay to the Investor a pro rata share of twenty-five percent (25%)
of the net proceeds of each Offering or Business Combination, or subsequent
Offering or Business Combination, or portion thereof, until such time as the
entire principal amount, and accrued interest of the Note is paid in full. For
purposes of this section 5.2, the term "closing" shall mean the occurrence of
any event after which Xxxxxxxx shall have the right to receive proceeds of the
Offering or Business Combination. For purposes hereof, Investor's pro rata share
of any distribution made pursuant to this Section 5.2 shall be calculated as a
percentage derived as follows: (i) the principal amount of the Notes held by
Investor, divided by (ii) the aggregate principal amount of all Notes placed or
issued by Xxxxxxxx in the Notes Offering. For purposes of this section 5.2, the
term "net proceeds" shall mean the proceeds of any Offering or Business
Combination less the reasonable expenses of such Offering or Business
Combination.
4.3 If the principal and accrued interest on the Note remains
outstanding on the close of business on the first anniversary of the date of
issuance hereof, Xxxxxxxx shall pay to the Investor the entire principal amount
owing under the terms of this Agreement and the accompanying promissory note,
such that the Note, including accrued interest, shall be paid in full.
4.4 Xxxxxxxx may, from time to time, in its sole discretion, make one
or more periodic payments to the Investor. Such payments shall be credited to
Xxxxxxxx'x account on the date that such payment is placed in the United States
Mail, first class postage prepaid, by Xxxxxxxx. Such payments shall be applied
first to accrued and unpaid interest, and then to the principal amount then
outstanding.
5. Guarantee of Repayment. Pursuant to the Guarantee Agreement between Pacific
Acquisition Group, Inc. ("PAG") and the Investor, executed separately and
attached hereto as Exhibit "B," and incorporated herein by reference in its
entirety, PAG hereby agrees to issue to Investor shares of Series B Convertible
Preferred Stock of PAG, in the event that Xxxxxxxx fails to make payment under
the terms prescribed above in Section 5.
6. Default Provisions. The occurrence of one or more of the following
events shall constitute an event of default of this entire Agreement:
6.1 The nonpayment of any principal or interest by Xxxxxxxx on this
loan when the same shall have become due and payable.
6.2 The entry of a decree or order by a court having appropriate
jurisdiction adjudging Xxxxxxxx a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of Xxxxxxxx under the federal Bankruptcy Act or any
other applicable federal or state law, or appointing a receiver, liquidator,
assignee or trustee of Xxxxxxxx, or any substantial part if its property, or if
the Collateral, as defined in Section 10, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree
BRIDGE LOAN AND SECURITY AGREEMENT
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or order unstayed and in effect for a period of sixty (60) consecutive days.
6.3 The institution by Xxxxxxxx of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under the federal Bankruptcy Act or
any other applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee or
trustee of the company, or of any substantial part of its property, or if the
Collateral, as defined in Section 10, shall become subject to the jurisdiction
of a federal bankruptcy court or similar state court, or if Xxxxxxxx shall make
an assignment for the benefit of its creditors, or if there is an attachment,
receivership, execution or other judicial seizure, or if there is an admission
in writing by Xxxxxxxx of its inability to pay its debts generally as they
become due, or the taking of corporate action by Xxxxxxxx in furtherance of any
such action.
6.4 Default in the obligation of Xxxxxxxx for borrowed money, other
than this Loan, which shall continue for a period of sixty (60) days, or any
event that results in acceleration of the maturity of any indebtedness of
Xxxxxxxx under any note, indenture, contract, or agreement.
6.5 Xxxxxxxx'x failure to comply with any material term, obligation,
covenant, or condition contained in this Agreement, within 10 days after receipt
of written notice from the Investor demanding such compliance.
6.6 Any warranty, covenant, or representation made to the Investor by
Xxxxxxxx under this Agreement, proves to have been false in any material respect
when made or furnished.
6.7 Any levy, seizure, attachment, lien, or encumbrance of or on the
Collateral, other than those existing as of the date hereof, which is not
discharged by Xxxxxxxx within 10 days.
6.8 Any sale, transfer, or disposition of any interest in the
Collateral, other than in the ordinary course of business, without the written
consent of the Investor.
7. Acceleration. At the option of the Lender, and without demand or notice, all
principal and any unpaid interest shall become immediately due and payable upon
a default as set forth in Section 7 above. Any attorneys' fees and other
expenses incurred by the Investor in connection with Xxxxxxxx'x bankruptcy or
any of the other events described in Section 7 shall be additional indebtedness
of Xxxxxxxx secured by this Agreement.
BRIDGE LOAN AND SECURITY AGREEMENT
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8. Appointment of PAG as Agent of Investor. Investor hereby appoints PAG as its
agent for the purpose of enforcing its rights prescribed under Section 10,
hereof, which appointment shall remain in effect until the earlier of (i)
termination of PAG's Guarantee of Xxxxxxxx'x indebtedness to Investor, or (ii)
payment in full by Xxxxxxxx of all indebtedness to Investor as provided
hereunder. The parties agree that if PAG's agency is terminated by Investor
prior to the payment in full by Xxxxxxxx of all indebtedness to Investor, as
provided hereunder, PAG's Guarantee of Xxxxxxxx'x indebtedness to Investor shall
be immediately terminated. All references in Section 10, hereof, to the rights
and duties of Investor shall be carried out by PAG as agent for investor, in
agents sole discretion. PAG may conclusively rely on, and shall be protected
when it acts in good faith upon, any statement, certificate, notice, request,
consent, order or other document which it believes to be genuine and which has
been signed by the proper party. Provided it uses due care, PAG shall have no
duty or liability to verify any such statement, certificate notice, request
consent, order or other document and its sole responsibility shall be to act
only as expressly set forth in this Agreement. PAG shall be under no obligation
to institute or defend any action, suit or proceeding in connection with this
Agreement unless it is indemnified to its satisfaction. PAG may consult counsel
in respect of a question arising under this Agreement and shall not be liable
for any action taken, or omitted, in good faith upon advise of such counsel.
PAG is not required to defend any legal proceedings which may be
instituted against it with respect to the subject matter of this Agreement,
unless the full cost and expense of such defense, to the satisfaction of PAG, is
provided for by Xxxxxxxx or Investor. Investor specifically agrees to fully
indemnify and hold harmless PAG from any expense, cost or liability incurred by
any of them by reason of this Agreement, including without limitation, attorneys
fees, costs or other expenses. If PAG does incur any out-of-pocket expenses in
the performance of its duties under this Agreement, including without limitation
reasonable attorneys fees and costs, Investor agrees to reimburse PAG for all
such reasonable expenses immediately upon demand.
9. Security Agreement.
9.1 Grant of Security Interest. Xxxxxxxx, in consideration of the
indebtedness described in this Agreement, hereby grants, conveys, and assigns to
the Investors, collectively, for security, all of Xxxxxxxx'x existing and future
right, title and interest in the property listed in Section 9.2 of this
Agreement. This security interest is granted to the Investors, collectively, to
secure (a) the payment of the indebtedness evidenced by the certain promissory
notes in the aggregate principal amount of $300,000, bearing interest at 15% per
annum, and maturing one year from the issuance thereof, issued by Xxxxxxxx (the
"Notes"), including all renewals, extensions, and modification thereof; (b) the
payment, performance and observance of all warranties, obligations, covenants
and agreements to be paid, performed or observed by under this Agreement; and
(c) the payment of all other sums, with interest thereon, advanced under the
terms of this Agreement.
9.2 Property. The property subject to the security interest (the
"Collateral") is as follows:
BRIDGE LOAN AND SECURITY AGREEMENT
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9.2.1 Equipment. All equipment of Xxxxxxxx.
9.2.2 Accounts Receivable and Other Intangibles. All of
Xxxxxxxx'x accounts, chattel paper, contract rights, commissions, warehouse
receipts, bills of lading, delivery orders, drafts, acceptances, notes,
securities and other instruments; documents; general intangibles and all other
forms of receivables, and all guaranties and securities therefor.
9.2.3 Inventory and Other Tangible Personal Property. All of
Xxxxxxxx'x inventory, including all goods, merchandise, materials, raw
materials, work in progress, finished goods, now owned or hereinafter acquired
and held for sale or lease or furnished or to be furnished under contracts or
service agreements or to be used or consumed in Xxxxxxxx'x business and all
other tangible personal property of Xxxxxxxx.
9.2.4 After-Acquired Property. All property of the types
described in Sections 9.2.1 - 9.2.3, or similar thereto, that at any time
hereafter may be acquired by Xxxxxxxx, including but not limited to all
accessions, parts, additions, and replacements.
9.2.5 Proceeds. All proceeds of the sale or other disposition
of any of the Collateral described or referred to in Sections 9.2.1 - 9.2.4.
Sale or disposition of Collateral is prohibited except as provided herein.
9.3. Covenants of Xxxxxxxx. Xxxxxxxx agrees and covenants as
follows:
9.3.1 Payment of Principal and Interest. Xxxxxxxx shall
promptly pay when due the principal of and interest on the indebtedness
evidenced by the Notes, any prepayment and late charges provided in the Notes,
and all other sums secured by this Agreement and the Notes.
9.3.2 Corporate Existence. Xxxxxxxx is a corporation duly
organized and existing under the laws of the state of California and is duly
qualified in every other state in which it is doing business.
9.3.3 Corporate Authority. The execution, delivery, and
performance of this Agreement, and the execution and payment of the Notes are
within Xxxxxxxx'x corporate powers, have been duly authorized, and are not in
contravention of law or the terms of Xxxxxxxx'x articles of incorporation and
bylaws, or of any indenture, agreement, or undertaking to which Xxxxxxxx is a
party or by which it is bound.
BRIDGE LOAN AND SECURITY AGREEMENT
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9.3.4 Ownership of Collateral. Xxxxxxxx is the sole owner of
the Collateral and will defend the Collateral against the claims and demands of
all other persons at any time claiming the same or any interest therein.
9.3.5 Issuance of Shares. That the shares of common stock
contemplated to be issued hereby are duly authorized, fully paid and
non-assessable.
9.4 Attorney Certification. Xxxxxxxx agrees to deliver to the Investor
within ten (10) days of the execution hereof, an opinion of counsel, licensed to
practice law in the state of California, that provides substantially as
described in Section 9.3.2 - 9.3.5, above.
9.5 Removal of Collateral Prohibited. Xxxxxxxx shall not remove
the Collateral from its premises, other than in the ordinary coarse of business,
without the written consent of the Investor.
9.6 Taxes and Assessments. Xxxxxxxx will pay or cause to be paid
promptly when due all taxes and assessments on the Collateral. Xxxxxxxx may,
however, withhold payment of any tax assessment or claim if a good faith dispute
exists as to the obligation to pay.
9.7 Insurance. Xxxxxxxx shall have and maintain, or cause to be
maintained, insurance at all times with respect to all Collateral except
accounts receivable, against such risks, and in such form, for such periods, and
written by such companies as may be satisfactory to the Investor. All policies
of insurance shall have endorsed a loss payable clause acceptable to the
Investor or such other endorsements as the Investor may from time to time
request, and Xxxxxxxx will promptly provide the Investor with the original
policies or certificates of such insurance. Xxxxxxxx shall promptly notify the
Investor of any loss or damage that may occur to the Collateral. The Investor is
hereby authorized to make proof of loss if it is not made promptly by Xxxxxxxx.
All proceeds of any insurance on the Collateral shall be held by the Investor as
a part of the Collateral. Such proceeds shall be paid out from time to time upon
order of Xxxxxxxx for the purpose of paying the reasonable cost of repairing or
restoring the property damaged. Any proceeds that have not been so paid out
within 120 days following their receipt by the Investor shall be applied to the
prepayment of principal on the Notes according to the terms hereof. In the event
of failure to provide insurance as herein provided, Investor may, at its option,
provide such insurance at Xxxxxxxx'x expense.
9.8 Protection of the Investor's Security. If Xxxxxxxx fails to perform
the covenants and agreements contained or incorporated in this Agreement, or if
any action or proceeding is commenced which affects the Collateral or title
thereto or the interest of the Investor therein, including, but not limited to
eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then the Investor may make such appearance,
disburse such sums, and take such action as the Investor deems necessary, in its
sole discretion, to protect the Investor's interest, including but not limited
to (i) disbursement of attorneys' fees,
BRIDGE LOAN AND SECURITY AGREEMENT
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(ii) entry upon Xxxxxxxx'x property to make repairs to the Collateral, and (iii)
procurement of satisfactory insurance. Any amounts disbursed by the Investor
pursuant to this Section, with interest thereon, shall become additional
indebtedness of Xxxxxxxx secured by this Agreement. Unless Xxxxxxxx and the
Investor agree to other terms of payment, such amounts shall be immediately due
and payable and shall bear interest from the date of disbursement at the default
rate stated in the Note unless collection from Xxxxxxxx of interest at such rate
would be contrary to applicable law, in which event such amounts shall bear
interest at the highest rate which may be collected from Xxxxxxxx under
applicable law. Nothing contained in this Section shall require the Investor to
incur any expense or take any action.
9.9 Inspection. The Investor may make or cause to be made
reasonable entries upon and inspections of Xxxxxxxx'x premises to
inspect the Collateral.
9.10 Xxxxxxxx and Lien Not Released. From time to time, the Investor
may, at the Investor's option, without giving notice to or obtaining the consent
of Xxxxxxxx or its successors or assigns or of any other lienholder or
guarantors, without liability on the Investor's part, and notwithstanding
Xxxxxxxx'x breach of any covenant or agreement of Xxxxxxxx in this Agreement,
extend the time for payment of said indebtedness or any part thereof, reduce the
payments thereon, release anyone liable on any of said indebtedness, accept a
renewal note or notes therefor, modify the terms and the time of payment of said
indebtedness, release from the lien of this Agreement any part of the
Collateral, take or release other or additional security, reconvey any part of
the Collateral, consent to any map or plan of the Collateral, consent to the
granting of any easement, join in any extension or subordination agreement, and
agree in writing with Xxxxxxxx to modify the rate of interest or period of
amortization of the Note or change the amount of any installments payable
thereunder. Any actions taken by the Investor pursuant to the terms of this
Section shall not affect the obligation of Xxxxxxxx or Xxxxxxxx'x successors or
assigns to pay the sums secured by this Agreement and to observe the covenants
of Xxxxxxxx contained herein, shall not affect the guaranty of any person,
corporation, partnership, or other entity for payment of the indebtedness
secured hereby, and shall not affect the lien or priority of lien hereof on the
Collateral. Xxxxxxxx shall pay the Investor a reasonable service charge,
together with such title insurance premiums and attorneys' fees as may be
incurred at the Investor's option for any such action if taken at Xxxxxxxx'x
request.
9.11 Forbearance by the Investor Not a Waiver. Any forbearance by the
Investor in exercising any right or remedy hereunder, or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any right
or remedy. The acceptance by the Investor of payment of any sum secured by this
Agreement after the due date of such payment shall not be a waiver of the
Investor's right to either require prompt payment when due of all other sums so
secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes, rents or other liens or
charges by the Investor shall not be a waiver of the Investor's right to
accelerate the maturity of the indebtedness secured by this Agreement, nor shall
the Investor's receipt of any awards, proceeds or damages as provided in this
Agreement
BRIDGE LOAN AND SECURITY AGREEMENT
Page 8 of 16
operate to cure or waive Xxxxxxxx'x default in payment of sums secured by this
Agreement.
9.12 Uniform Commercial Code Security Agreement. This Agreement is
intended to be a security agreement pursuant to the Uniform Commercial Code for
any of the items specified above as part of the Collateral which, under
applicable law, may be subject to a security interest pursuant to the Uniform
Commercial Code, and Xxxxxxxx hereby grants the Investors, collectively, a
security interest in said items. Xxxxxxxx agrees to execute and file financing
statements, as well as extensions, renewals and amendments thereof, and
reproductions of this Agreement, and do whatever may be necessary under the
applicable Uniform Commercial Code in the state where the Collateral is located,
to perfect and continue the Investors' interest in the Collateral, all at
Xxxxxxxx'x expense. The parties agree that such financing statements, extensions
and renewals may be filed in the name of, or for the benefit of PAG, on behalf
of the Investor and all other holders of the Notes, collectively. Xxxxxxxx also
agrees that the Investor may file on behalf of the Investors any appropriate
document in the appropriate index as a financing statement for any of the items
specified above as part of the Collateral. Xxxxxxxx shall pay all costs of
filing such financing statements and any extensions, renewals, amendments, and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements the Investor may reasonably require. Without
the prior written consent of the Investor, Xxxxxxxx shall not create or allow to
be created, pursuant to the Uniform Commercial Code, any other security interest
in the Collateral, including replacements and additions thereto. Upon the
occurrence of an event of default, Investor shall have the remedies of a secured
party under the Uniform Commercial Code and, at the Investor's option, may also
invoke the other remedies provided in this Agreement as to such items. In
exercising any of said remedies, the Investor may proceed against the items of
real property and any items of personal property specified above as part of the
Collateral separately or together and in any order whatsoever, without in any
way affecting the availability of the Investor's remedies under the Uniform
Commercial Code or of the other remedies provided in this Agreement.
9.13 Events of Default. The Debtor shall be in default under this
Agreement when any of the following events or conditions occurs:
9.13.1 Xxxxxxxx shall be in default under the Notes or any
Note.
9.13.2 Xxxxxxxx fails to comply with any material term,
obligation, covenant, or condition contained in this Agreement and/or in the
Sales/Loan Agreement, within 10 days after receipt of written notice from the
Secured Party demanding such compliance.
9.13.3 Any warranty, covenant, or representation made to the
Investors by Xxxxxxxx under this Agreement, and under the Bridge Loan
Agreements, proves to have been false in any material respect when made or
furnished.
9.13.4 Any event that results in acceleration of the
maturity of any indebtedness
BRIDGE LOAN AND SECURITY AGREEMENT
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of Xxxxxxxx in the outstanding principal amount of $50,000 or more, under any
note, indenture, contract, or agreement.
9.13.5 Any levy, seizure, attachment, lien, or encumbrance of
or on the Collateral, other than those existing as of the date hereof, which is
not discharged by the Debtor within 10 days or, any sale, transfer, or
disposition of any interest in the Collateral, other than in the ordinary course
of business, without the written consent of the Secured Party.
9.14 Acceleration in Case of Borrower's Insolvency. If the Debtor shall
voluntarily file a petition under the federal Bankruptcy Act, as such Act may
from time to time be amended, or under any similar or successor federal statute
relating to bankruptcy, insolvency, arrangements or reorganizations, or under
any state bankruptcy or insolvency act, or file an answer in an involuntary
proceeding admitting insolvency or inability to pay debts, or if the Debtor
shall be adjudged a bankrupt, or if a trustee or receiver shall be appointed for
the Debtor's property, or if the Collateral shall become subject to the
jurisdiction of a federal bankruptcy court or similar state court, or if the
Debtor shall make an assignment for the benefit of its creditors, or if there is
an attachment, receivership, execution or other judicial seizure, then the
Secured Party may, at the Secured Party's option, declare all of the sums
secured by this Agreement to be immediately due and payable without prior notice
to the Debtor, and the Secured Party may invoke any remedies permitted by this
Agreement. Any attorneys' fees and other expenses incurred by the Secured Party
in connection with the Debtor's bankruptcy or any of the other events described
in this Section shall be additional indebtedness of the Debtor secured by this
Agreement.
9.15 Rights of the Investor.
9.15.1 Upon default the Investor may require Xxxxxxxx to
assemble the Collateral and make it available to the Investor at the place to be
designated by the Investor which is reasonably convenient to both parties. The
Investor may sell all or any part of the Collateral as reasonably necessary to
satisfy Xxxxxxxx'x obligations herunder to Investor, as a whole or in parcels
either by public auction, private sale, or any other reasonable method of
disposition. Nothing in this Section 10.15.1 shall be construed to limit any
other of Investor's rights in connection with any and all of the Collateral as
provided herein. The Investor may bid at any public sale on all or any portion
of the Collateral. Unless the Collateral is perishable or threatens to rapidly
decline in value or is of the type customarily sold on a recognized market, the
Investor shall give Xxxxxxxx reasonable notice of the time and place of any
public sale, or of the time after which any private sale or other disposition of
the Collateral is to be made, and notice given at least 10 days before the time
of the sale or other disposition shall be conclusively presumed to be
reasonable. A public sale in the following fashion shall be conclusively
presumed to be reasonable:
9.15.2 Notice shall be given at least 10 days before the date
of sale by publication once in a newspaper of general circulation published in
the county in which the sale is to be held;
BRIDGE LOAN AND SECURITY AGREEMENT
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9.15.3 The sale shall be held in a county in which the
Collateral or any part is located or in a county in which Xxxxxxxx has a place
of business;
9.15.4 Payment shall be in cash or by certified check
immediately following the close of the sale;
9.15.5 The sale shall be by auction, but it need not be by a
professional auctioneer;
9.15.6 The Collateral may be sold as is and without any
preparation for sale.
9.16 Obligation to Sell Collateral. Notwithstanding any provision of
this Agreement, Investor shall be under no obligation to offer to sell the
Collateral. In the event any Investor offers to sell the Collateral, there will
be no obligation to consummate a sale of the Collateral if, in Investor's
reasonable business judgment, none of the offers received by it reasonably
approximates the fair value of the Collateral. In the event the Investor elects
not to sell the Collateral, Investor may elect to follow the procedures set
forth in the Uniform Commercial Code for retaining the Collateral in
satisfaction of Xxxxxxxx'x obligation, subject to Xxxxxxxx'x rights under such
procedures.
9.17 Receiver. In addition to the rights under this Agreement, in the
event of a default by Xxxxxxxx, the Investor shall be entitled to the
appointment of a receiver for the Collateral as a matter of right whether or not
the apparent value of the Collateral exceeds the outstanding principal amount of
the Note.
9.18 Waiver of Marshalling. Notwithstanding the existence of any other
security interest in the Collateral held by the Investor or by any other party,
the Investor shall have the right to determine the order in which any or all of
the Collateral shall be subjected to the remedies provided by this Agreement.
the Investor shall have the right to determine the order in which any or all
portions of the indebtedness secured by this Agreement are satisfied from the
proceeds realized upon the exercise of the remedies provided in this Agreement.
Xxxxxxxx, any party who consents to this Agreement, and any party who now or
hereafter acquires a security interest in the Collateral and who has actual or
constructive notice of this Agreement, hereby waive any and all rights to
require the marshalling of assets in connection with the exercise of any of the
remedies permitted by applicable law or by this Agreement.
BRIDGE LOAN AND SECURITY AGREEMENT
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9.19 Provisions of Agreement. Xxxxxxxx agrees to comply with the
covenants and conditions of this Agreement. All sums disbursed by the Investor
to protect the security of this Agreement up to the principal amount of the Note
shall be treated as disbursements pursuant to such Agreements. All such sums
shall bear interest from the date of disbursement at the rate stated in the
Note, unless collection from Xxxxxxxx of interest at such rate would be contrary
to applicable law in which event such amount shall bear interest at the highest
rate which may be collected from Xxxxxxxx under applicable law. In case of a
breach by Xxxxxxxx of the covenants and conditions of the Agreement, the
Investor at the Investor's option (i) may invoke any of the rights or remedies
provided in the Agreement, (ii) may accelerate the sums secured by this
Agreement and invoke the remedies provided in this Agreement or, (iii) may do
both.
10. Remedies Cumulative. Each remedy provided in this Agreement is
distinct and cumulative to all other rights or remedies under this Agreement or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order.
11. Waiver of Statute of Limitations. Xxxxxxxx hereby waives the right to
assert any statute of limitations as a bar to the enforcement of this Agreement
or to any action brought to enforce the Note or any other obligation secured by
this Agreement.
12. Notices and Delivery.
Any notices permitted or required under this Agreement shall be deemed
given upon the date of personal delivery or 48 hours after deposit in the United
States mail, postage fully prepaid, return receipt requested, addressed as
follows:
Xxxxxxxx:
Xxxx Xxxxxxxx, Inc., a
California Corporation
0000-X Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
The Investor:
Social Secrity Number:
Telephone ( )
BRIDGE LOAN AND SECURITY AGREEMENT
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or at any other address as any party may, from time to time, designate by notice
given in compliance with this Section. Any deliveries required under this
Agreement must be made by personal delivery at the applicable address listed
above.
13. Indemnification.
13.1 General Agreement. In the event the Investor was, is, or
becomes a participant in, or is threatened to be made a
participant in, a proceeding arising, in whole or in part,
from its duties, rights or obligations described in this
agreement, and (i) a material breach of this Agreement by
Xxxxxxxx: (ii) an untrue statement of a material fact or
omission to state a material fact, or allegation of an untrue
statement of a material fact or omission to state a material
fact, by Xxxxxxxx in any documents or information provided to
Investor or approved by Xxxxxxxx in connection with provision
of the Loan or issuance of the Notes, as described herein,
which was necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading, to the extent such breach, untrue statement or
omission is a cause of the loss, claim, damage, liability or
expense. Xxxxxxxx shall indemnify the Investor from and
against any and all expenses to the fullest extent permitted
by law, as the same exists or may hereafter be amended or
interpreted (but in the case of any such amendment or
interpretation, only to the extent that such amendment or
interpretation permits Xxxxxxxx to provide broader
indemnification rights than were permitted prior thereto). The
parties hereto intend that this Agreement shall provide for
indemnification in excess of that expressly permitted by
statute, including, without limitation, any indemnification
provided by Xxxxxxxx'x articles of incorporation, its bylaws,
a vote of its shareholders or disinterested directors, or
applicable law.
13.2 Expense Advances. If so requested by the Investor, Xxxxxxxx
shall, within 10 business days after such request, advance all
expenses to the Investor. The terms "expenses" shall mean (i)
any expense, liability, or loss, including attorney fees,
judgments, fines, ERISA excise taxes and penalties, and
amounts paid or to be paid in settlement; (ii) any interest,
assessments, or other charges imposed on any of the items in
part (i) of this subsection; and (iii) any federal, state,
local, or foreign taxes imposed as a result of the actual or
deemed receipt of any payments under this Agreement paid or
incurred in connection with investigating, defending, being a
witness in, participating in (including on appeal), or
preparing for any of the foregoing in any proceeding relating
to any indemnifiable event.
BRIDGE LOAN AND SECURITY AGREEMENT
Page 13 of 16
13.3 Mandatory Indemnification. Notwithstanding any other provision
of this Agreement, to the extent that the Investor has been
successful on the merits in defense of any proceeding relating
in whole or in part to an indemnifiable event or in defense of
any issue or matter in such proceeding, the Investor shall be
indemnified against all expenses incurred in connection
therewith.
13.4 Partial Indemnification. If the Investor is entitled under
any provision of this Agreement to indemnification by Xxxxxxxx
for a portion of expenses, but not for the total amount of
expenses, Xxxxxxxx shall indemnify the Investor for the
portion to which the Investor is entitled.
13.5 Indemnification Payment. The Investor shall receive
indemnification of expenses from Xxxxxxxx in accordance with
this Agreement as soon as practicable after the Investor has
made written demand on Xxxxxxxx for indemnification. If the
Investor has not received full indemnification within 30 days
after making a demand in accordance with the terms hereof, the
Investor shall have the right to enforce its indemnification
rights under this Agreement by commencing litigation in any
court in the State of California seeking an initial
determination by the court. Xxxxxxxx hereby consents to
service of process and to appear in any such proceeding. The
remedy provided for in this Section shall be in addition to
any other remedies available to the Investor in law or equity.
Xxxxxxxx shall indemnify the Investor against any and all
expenses. If requested by the Investor, Xxxxxxxx shall, within
10 business days after such request, advance to the Investor
such expenses as are incurred by the Investor in connection
with any claim asserted against or action brought by the
Investor for:
13.5.1 indemnification of expenses or advances of expenses
by Xxxxxxxx under this Agreement, or any other
agreement, or under applicable law, or Xxxxxxxx'x
articles of incorporation or bylaws now or hereafter
in effect relating to indemnification for
indemnifiable events; or
13.5.2 recovery under directors' and officers' liability
insurance policies maintained by Xxxxxxxx, for
amounts paid in settlement if the independent counsel
has approved the settlement.
13.6 Xxxxxxxx shall not settle any proceeding in any manner that
would impose any penalty or limitation on the Investor without
the Investor's written consent. Neither Xxxxxxxx nor the
Investor will unreasonably withhold its consent to any
proposed settlement. Xxxxxxxx shall not be liable to indemnify
the Investor under this Agreement with regard to any judicial
award if Xxxxxxxx was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of
such action; however, Xxxxxxxx'x liability under this
Agreement shall not be excused if
BRIDGE LOAN AND SECURITY AGREEMENT
Page 14 of 16
participation in the proceeding by Xxxxxxxx was barred by this
Agreement.
14. Entire Agreement.
This Agreement, the Note, and the Security Agreement, and all exhibits
and attachments thereto, contains the entire understanding between and among the
Parties and supersedes any prior understandings and agreements among them
respecting the subject matter of this Agreement.
15. Agreement Binding.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the Parties hereto.
16. Amendment and Modification.
Subject to applicable law, this Agreement may be amended, modified, or
supplemented only by a written agreement signed by the Parties.
17. Attorney Fees.
In the event arbitration, suit or action is brought by any party under
this Agreement to enforce any of its terms, and in any appeal therefrom, it is
agreed that the prevailing party shall be entitled to reasonable attorneys fees
to be fixed by the arbitrator, trial court, or appellate court.
18. Arbitration.
If at any time during the term of this Agreement any dispute,
difference, or disagreement shall arise upon or in respect of the Agreement, and
the meaning and construction hereof, every such dispute, difference, and
disagreement shall be referred to a single arbiter agreed upon by the Parties,
or if no single arbiter can be agreed upon, an arbiter or arbiters shall be
selected in accordance with the rules of the American Arbitration Association
and such dispute, difference, or disagreement shall be settled by binding
arbitration in accordance with the then prevailing commercial rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction thereof. The parties
hereto each jointly and severally waive any and all rights to appeal the
judgement or award of such arbitrator.
BRIDGE LOAN AND SECURITY AGREEMENT
Page 15 of 16
19. Law Governing.
This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
20. Titles and Captions.
All section titles or captions contained in this Agreement are for
convenience only and shall not be deemed part of the context nor effect the
interpretation of this Agreement.
21. Further Action.
The Parties hereto shall execute and deliver all documents, provide all
information and take or forbear from all such action as may be necessary or
appropriate to achieve the purposes of the Agreement.
"INVESTOR"
Dated: , 1995 By:
---------------------------
XXXX XXXXXXXX, INC.
A CALIFORNIA CORPORATION
Dated: , 1995 By:
---------------------------
Title:
---------------------------
EXHIBIT A
PROMISSORY NOTE
IN THE PRINCIPAL AMOUNT OF $_________
PROMISSORY NOTE
Dated as of
, 1995
Amount : $
FOR VALUE RECEIVED, the undersigned, Xxxx Xxxxxxxx, Inc., a
California corporation ("Maker"), promises to pay to the order of ("Lender"),
the principal sum of $___________, (the "Amount Advanced") on or before
____________________, 1996 (the "Maturity Date"), which principal sum shall be
advanced to Maker by Lender as set forth herein.
1. Advance of Funds.
Lender shall, upon the execution of the accompanying
Bridge Loan Agreement, advance to Maker an amount not less than $____________
("Advance").
2. Interest Rate.
The unpaid Amount Advanced under this Promissory Note
shall bear interest at a rate of
fifteen percent (15%) per anum, payable in four equal installments on March 31,
June 30, September 30, and December 31, fifteen (15) days after the end of each
calendar quarter.
3. Computation.
Interest chargeable hereunder shall be calculated
from the date each Incremental Advance shall have been made, on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.
Interest not paid when due shall be added to the unpaid principal balance and
shall thereafter bear interest at the same rate as principal. All payments
(including prepayments) hereunder are to be applied first to the payment of
accrued interest and the balance remaining applied to the payment of principal.
4. Payments.
Except as otherwise set forth in the Bridge Loan and
Security Agreement, by and between Maker and Lender, dated , 1995 ("Bridge Loan
Agreement"), and as set forth herein, the unpaid Amount Advanced under this
Promissory Note plus all accrued but unpaid interest thereon shall be payable on
the Maturity Date.
5. Voluntary Prepayment.
Maker may, at any time, upon five (5) Business Days
prior written notice to Lender, prepay
the unpaid Amount Advanced evidenced by this Promissory Note, in whole or in
part, without penalty or premium, by paying to Lender, in cash or by wire
transfer or immediately available federal funds, the amount of such prepayment.
If any such prepayment is less than a full repayment, then such prepayment shall
be applied first to the payment of accrued interest and the balance remaining
applied to the payment of principal.
6. Lawful Money; Designated Places of Payment.
All principal and interest due hereunder is payable in lawful
money of the United States of America, in immediately available funds, at
Lender's designated address not later than 6:00 p.m., Pacific time, on the day
of payment.
PROMISSORY NOTE
PAGE 1 OF 3
7. Waivers.
Except as set forth elsewhere herein or in the Bridge Loan
Agreement, Maker, for itself and its legal representatives, successors, and
assigns, expressly waives presentment, protest, demand, notice of dishonor,
notice of nonpayment, notice of maturity, notice of protest, notice of intent to
accelerate, notice of acceleration, presentment for the purpose of accelerating
maturity, and diligence in collection.
8. DEFAULT; SECURITY INTERESTS.
IT IS EXPRESSLY AGREED THAT, UPON THE OCCURRENCE OF AN EVENT
OF DEFAULT UNDER THE BRIDGE LOAN AGREEMENT, THE UNPAID PRINCIPAL BALANCE OF THIS
PROMISSORY NOTE, TOGETHER WITH INTEREST ACCRUED HEREON, SHALL BE DUE AND PAYABLE
AS PROVIDED IN THE LOAN AND SECURITY AGREEMENT, WITHOUT PRESENTMENT, DEMAND,
PROTEST, OR NOTICE OF PROTEST, OF ANY KIND, ALL OF WHICH ARE HEREBY EXPRESSLY
WAIVED. IT IS FURTHER UNDERSTOOD THAT THIS NOTE IS SECURED BY, AMONG OTHER
THINGS, ANY OF THE SECURITY INTERESTS GRANTED TO LENDER UNDER THE LOAN AND
SECURITY AGREEMENT AND UNDER ANY OTHER AGREEMENT BETWEEN LENDER AND MAKER WHICH
IS EXECUTED IN CONNECTION WITH THE LOAN AND SECURITY AGREEMENT, IN CONNECTION
HEREWITH, OR IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREUNDER
("COLLATERAL DOCUMENTS"). ALL OF THE COVENANTS, CONDITIONS, WARRANTIES,
REPRESENTATIONS AND AGREEMENTS CONTAINED IN SUCH COLLATERAL DOCUMENTS, ARE
HEREBY INCORPORATED HEREIN AND MADE A PART HEREOF.
9. Maximum Interest Rate.
Notwithstanding anything to the contrary contained in this
Promissory Note, Maker shall not be obligated to pay, and the holder hereof
shall not be entitled to charge, collect, receive, reserve, or take interest
("interest" being defined, for purposes of this paragraph, as the aggregate of
all charges which constitute interest under applicable law that are contracted
for, charged, reserved, received, or paid under this Promissory Note) in excess
of the maximum rate allowed by applicable law. During any period of time in
which the interest rate specified herein exceeds such maximum rate, interest
shall accrue and be payable at such maximum rate; provided, however, that, if
the interest rate declines below such maximum rate, interest shall continue to
accrue and be payable at such maximum rate (so long as there remains any unpaid
principal balance due under this Note) until the interest that has been paid on
this Note equals the amount of interest that would have been paid if interest
had at all times accrued and been payable at the interest rate specified in this
Note.
For purposes of this Promissory Note, the term "applicable
law" shall mean that law in effect from time to time and applicable to the loan
transaction between Maker and the holder of this Promissory Note which lawfully
permits the charging and collection of the highest permissible, lawful,
non-usurious rate of interest on such loan transaction and this Promissory Note,
including laws of the State of California and, to the extent controlling, laws
of the United States of America.
10. Attorneys' Fees.
In the event it should become necessary to employ counsel to
collect this Promissory Note, Maker agrees to pay the attorneys' fees and costs
of the holder hereof, irrespective of whether suit is brought.
11. Capitalized Terms.
Any and all capitalized terms used in this Promissory Note and
not separately defined herein shall have the meaning ascribed thereto in the
Bridge Loan Agreement.
PROMISSORY NOTE
PAGE 2 OF 3
12. Section Headings.
Headings and numbers have been set forth for
convenience only. Unless the contrary is compelled by the context, everything
contained in each paragraph applies equally to this entire Promissory Note.
13. Amendments in Writing.
This Promissory Note may not be changed, modified, amended, or
terminated orally.
14. CHOICE OF LAW; WAIVER OF TRIAL BY JURY.
THIS PROMISSORY NOTE AND ALL TRANSACTIONS HEREUNDER AND/OR
EVIDENCED HEREBY SHALL BE GOVERNED BY, CONSTRUED UNDER, AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. MAKER HEREBY WAIVES, TO THE
EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
OR PROCEEDING RELATING TO THIS PROMISSORY NOTE.
Made and Executed at
Xxxx Xxxxxxxx Inc.
a California Corporation
By
-------------------
Title:
-------------------
PROMISSORY NOTE
PAGE 3 OF 3
EXHIBIT B
GUARANTEE OF REPAYMENT
BY THE PACIFIC ACQUISITION GROUP, INC.
PROMISSORY NOTE
PAGE 4 OF 3
GUARANTEE AGREEMENT
Amount : $ Dated as of
, 1995
BORROWER : XXXX XXXXXXXX, INC., A CALIFORNIA CORPORATION
LENDER : , an individual
GUARANTOR : THE PACIFIC ACQUISITION GROUP, INC., A COLORADO CORPORATION
FOR GOOD AND VALUABLE CONSIDERATION, the undersigned, Pacific
Acquisition Group, Inc., a Colorado Corporation ("Guarantor"), hereby promises
to issue or cause to be issued to , an individual (the "Lender") or his order,
shares of Series B Convertible Preferred Stock of Guarantor at the rate of one
share of PAG Stock per $6.50 the principal amount of Indebtedness, as defined
below, of Xxxx Xxxxxxxx, Inc., a California Corporation (the "Borrower"), on the
terms and conditions set forth in this Guarantee.
1. Definitions.
The following words shall have the following meanings when used in this
Guarantee:
Borrower: The word "Borrower" shall mean Xxxx
Xxxxxxxx, Inc., a California corporation.
Default: The word "Default" shall mean the occurrence
of any incidence of default as described in
the Bridge Loan and Security Agreement
entered into by and between Lender and
Borrower, dated __________________, 0000,
(xxx "Xxxxxx Loan Agreement").
Lender: The word "Lender" shall mean .
Guarantor: The word "Guarantor" shall mean PACIFIC
ACQUISITION GROUP, INC.
Guarantee: The word "Guarantee" shall mean this
Guarantee Agreement between Guarantor and
Lender.
Indebtedness: The word "Indebtedness" shall mean the
outstanding principal advanced by Lender to
Borrower on _________________, 1995,
pursuant to the Bridge Loan Agreement, in
the principal amount of $___________, dated
_______________, 1995, and as evidenced by a
Promissory Note executed _______________,
1995 (the "Note"), by Borrower in favor of
Lender, due and payable in full on
_________________, 1996, bearing interest at
a rate of fifteen (15%) percent per annum.
2. Nature of Guarantee.
Upon Default of the Note by Borrower, and subject to the terms hereof,
Guarantor hereby agrees to issue to Lender shares of Series B Convertible
Preferred Stock of Pacific Acquisition Group, Inc. ("PAG Stock") at the rate of
one share of PAG Stock per $6.50 of Indebtedness of Borrower that remains
outstanding upon such Default. Guarantor's liability under this Guarantee shall
be open and continuous for as long as any portion of the principal balance on
the Note, and any accrued and unpaid interest thereon, remains outstanding. No
payments made upon the Indebtedness will discharge or diminish the continuing
liability of Guarantor in connection with the remaining portions
GUARANTEE AGREEMENT
PAGE 1 OF 4
of the Indebtedness as of yet unpaid by Borrower.
3. Conditions Precedent to Obligations of Guarantor.
Notwithstanding any other provision hereof, the obligation of Guarantor
to issue PAG Stock in connection with the Default of the Note by Borrower shall
be contingent upon, and subject to the occurrence of the following:
3.1 The agreement by the Lender to (i) assign all right, title and
interest in the Note to Guarantor, and (ii) grant to Guarantor
any and all subrogation rights that Investor may have in
connection with the Note, in the form attached hereto as
Exhibit A.
3.2 Exhaustion of all reasonable collection efforts by Lender
against Borrower, including foreclosing on all liens and
security interests in any and all collateral granted to Lender
in connection with the Bridge Loan Agreement; and
Lender hereby acknowledges that the PAG Stock may not be sold,
transferred, or otherwise disposed of by an investor without the prior written
consent of the Guarantor. Before giving such consent, Guarantor may require an
effective registration statement under the Securities Act of 1933, as amended,
and any applicable state securities laws, or an opinion of counsel, to be
obtained at the expense of the transferor, acceptable to the company, to the
effect that such registration is not required. Any such sales must also comply
with any applicable state securities requirements. Certificates for the
securities will bear a legend to that effect.
4. Duration of Guarantee.
This Guarantee will take effect when received by Lender without the
necessity of any acceptance by Lender, or any notice to Guarantor or to
Borrower, and will continue in full force until the earlier of (i) payment in
full and satisfaction of all Indebtedness incurred or contracted, or (ii)
revocation of the agency of Pacific Acquisition Group, Inc. by Lender, as
described in the Bridge Loan Agreement, the terms of which are incorporated
herein by reference. If Guarantor elects to revoke this Guarantee, Guarantor may
only do so in writing. Guarantor's writing of revocation must be delivered to
Lender at the address of Lender listed above or such other place as Lender may
designate in writing. Written revocation of this Guarantee will apply only to
advances or new Indebtedness created after actual receipt by Lender of
Guarantor's written revocation. For this purpose and without limitation the term
"new Indebtedness" does not include Indebtedness which at the time of notice of
revocation is contingent, unliquidated, undetermined or not due and which later
becomes absolute, liquidated, determined or due.
This Guarantee will continue to bind Guarantor for all Indebtedness
incurred by Borrower or committed by Lender prior to receipt of Guarantor's
written notice of revocation, including any extensions, renewals, substitutions
or modifications of the Indebtedness. All renewals, extensions, substitutions,
and modifications of the Indebtedness granted after Guarantor's revocation, are
contemplated under this Guarantee and, specifically will not be considered to be
new Indebtedness.
5. Guarantor's Representations and Warranties.
Guarantor represents and warrants to Lender that (a) this Guarantee is
executed at Borrower's request and not at the request of Lender; (b) Lender has
made no representation to Guarantor as to the credit worthiness of Borrower; (c)
upon Lender's request, Guarantor will provide to Lender financial and credit
information in form acceptable to Lender, and all such financial information
provided to Lender is true and correct in all material respects and fairly
presents the financial condition of Guarantor as of the dates thereof, and no
material adverse change has occurred in the financial condition of Guarantor
since the date of the financial statements; (d) Guarantor is a Colorado
corporation, existing in good standing and qualified to do business in
California; and (e) the PAG Shares will be validly issued, fully paid and non
assessable.
GUARANTEE AGREEMENT
PAGE 2 OF 4
Lender agrees to notify Guarantor of any facts, events, or
circumstances which might materially affect Guarantor's risks under this
Guarantee. Guarantor agrees that, absent a request for information, Lender shall
have no additional obligation to disclose to Guarantor any information or
documents acquired by Lender in the course of its relationship with Borrower.
6. Guarantor's Waivers.
Except as prohibited by applicable law, Guarantor also waives any and
all rights or defenses arising by reason of (a) any disability or other defense
of Borrower, any other guarantor or surety or any other person; (b) the
cessation for any cause whatsoever, other than payment in full, of the
Indebtedness; (c) the application of proceeds of the Indebtedness by Borrower
for purposes other than the purposes understood and intended by Guarantor and
Lender; (d) any act of omission or commission by Lender which directly or
indirectly results in or contributes to the discharge of Borrower or any other
guarantor or surety, or the Indebtedness, or the loss or release of any
collateral by operation of law or otherwise; (e) any modification or change in
terms of the Indebtedness, whatsoever, including without limitation, the
renewal, extension, acceleration, or other change in the time payment of the
Indebtedness is due and any change in the interest rate, and including any such
modification or change in terms after revocation of this Guarantee on
Indebtedness incurred prior to such revocation.
7. Agreement Binding.
This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the Parties hereto.
8. Amendment and Modification.
Subject to applicable law, this Agreement may be amended, modified, or
supplemented only by a written agreement signed by the Parties.
9. Attorney Fees.
In the event arbitration, suit or action is brought by any party under
this Agreement to enforce any of its terms, and in any appeal therefrom, it is
agreed that the prevailing party shall be entitled to reasonable attorneys fees
to be fixed by the arbitrator, trial court, or appellate court.
10. Arbitration.
If at any time during the term of this Agreement any dispute,
difference, or disagreement shall arise upon or in respect of the Agreement, and
the meaning and construction hereof, every such dispute, difference, and
disagreement shall be referred to a single arbiter agreed upon by the Parties,
or if no single arbiter can be agreed upon, an arbiter or arbiters shall be
selected in accordance with the rules of the American Arbitration Association
and such dispute, difference, or disagreement shall be settled by binding
arbitration in accordance with the then prevailing commercial rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction thereof. The parties
hereto each jointly and severally waive any and all rights to appeal the
judgement or award of such arbitrator.
GUARANTEE AGREEMENT
PAGE 3 OF 4
11. CHOICE OF LAW; WAIVER OF TRIAL BY JURY.
THIS GUARANTEE AND ALL TRANSACTIONS HEREUNDER AND/OR EVIDENCED HEREBY
SHALL BE GOVERNED BY, CONSTRUED UNDER, AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF CALIFORNIA. MAKER HEREBY WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE.
THE UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL OF THE PROVISIONS OF THIS
GUARANTEE AND AGREES TO ITS TERMS. IN ADDITION, THE GUARANTOR UNDERSTANDS THAT
THIS GUARANTEE IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTEE TO LENDER AND THAT THE GUARANTEE WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN "DURATION OF GUARANTEE." NO FORMAL ACCEPTANCE BY LENDER IS
NECESSARY TO MAKE THIS GUARANTEE EFFECTIVE.
Made and Executed at GUARANTOR:
PACIFIC ACQUISITION GROUP, INC.
a Colorado Corporation
By:
--------------------
Title:
--------------------
GUARANTEE AGREEMENT
PAGE 4 OF 4
EXHIBIT A
ASSIGNMENT
ASSIGNMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, the undersigned hereby assigns transfers all of the undersigned's
right, title and interest in and to the following:
1. The Bridge Loan and Security Agreement by and between the
undersigned and Xxxx Xxxxxxxx, Inc., a California
corporation,, dated ____________________, 1995, a true and
correct copy of which is attached hereto as Exhibit A, and
2. The Promissory Note executed ____________________, 1995 (the
"Note"), by Xxxx Xxxxxxxx, Inc., a California corporation, in
favor of the undersigned, in the principal amount of
$____________, due and payable in full on ________________,
1996, bearing interest at a rate of fifteen (15%) percent per
annum, a true and correct copy of which is attached hereto as
Exhibit B.
Dated: _________________________ By:_________________________________
