THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (AS AMENDED), AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES, OR
DELIVERY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THESE SECURITIES THAT SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT.
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is entered into effective as of
April 6, 2001 ("Effective Date"), between Meltronix, Inc.,
("Meltronix"), and La Jolla Cove Investors, Inc. ("LJCI").
1. Loan and Note. As of the Effective Date, LJCI will make a loan
to Meltronix in the principal amount of Two Hundred Thousand Dollars
($200,000.00), which amount LJCI will deliver to Meltronix in one lump
sum ("Loan"). The terms and conditions of the Loan are set forth in
the form of Secured Promissory Note attached hereto as Exhibit "A"
("Note"). On the Effective Date, Meltronix and LJCI shall each execute
and deliver to each other the Note.
2. Security for Loan and Note.
2.1 Security Agreement. On the Effective Date, Meltronix and LJCI shall
each execute and deliver to each other the Security Agreement in the form
attached hereto as Exhibit "B" ("Security Agreement"), pursuant to which
Meltronix has pledged the collateral described therein as security for the
repayment of the Loan, the Note and the obligations of Meltronix under the
Registration Rights Agreement (referred to in Paragraph 3 below).
2.2 Guarantee. On the Effective Date, Xxxx Xxxxxxxx, Xxxxxx Xxxxxx and
Xxxxx Xxxxxx (the "Guarantors") shall execute a continuing guaranty in
the form attached hereto as Exhibit "C".
2.3 Securities Agreement. On the Effective Date, the Guarantors and LJCI
shall enter into a sharing and put and call agreement with respect to the
Common Stock referred to in Paragraph 4 below in the form attached hereto
as Exhibit "D".
3. Registration Rights. On the Effective Date, Meltronix and LJCI shall
each execute and deliver to each other the Registration Rights Agreement
in the form attached hereto as Exhibit "E" ("Registration Rights
Agreement").
4. Issuance of Common Stock. On the Effective Date, Meltronix shall
deliver to LJCI 1,000,000 shares of the Common Stock of Meltronix (the
"Common Stock") as additional consideration for the Loan.
5. Representations and Warranties of Meltronix. In addition to any
representations and warranties Meltronix may make to LJCI elsewhere in
this Agreement or in any other document delivered to LJCI in connection
herewith, Meltronix represents and warrants to each of LJCI that the
statements contained in this Section 5 are true, accurate, complete, and
not misleading in any material respect, as of the Effective Date.
5.1 Common Stock. The Common Stock to be issued to LJCI pursuant and
subject to the provisions of this Agreement has been duly authorized.
The issuance and delivery of the Common Stock as described in and
subject to the provisions of this Agreement has been duly authorized
by all required corporate action on the part of Meltronix. Upon
the issuance, the Common Stock will be validly issued, fully paid
and non-assessable, with no personal liability attaching to the
ownership thereof, and will be free and clear of all liens,
charges, restrictions, claims and encumbrances imposed by or
through Meltronix.
5.2 Authority Regarding this Agreement.
5.2.1 Meltronix has the complete and unrestricted right, power,
authority and capacity to (a) execute and deliver this Agreement,
the Note, the Registration Rights Agreement, the Security Agreement
and every other document executed and delivered by Meltronix to LJCI
in connection with this Agreement, if any ("Other Documents"); (b)
issue and deliver the Common Stock to LJCI subject to and in
accordance with the provisions of this Agreement; and (c) carry out
and perform each of Meltronix's obligations pursuant to this Agreement,
the Note, the Registration Rights Agreement, the Security Agreement and
the Other Documents (if any).
5.2.2 No further approvals, actions or proceedings are necessary on the
part of Meltronix to authorize this Agreement, the Note, the
Registration Rights Agreement, the Security Agreement or the Other
Documents (if any) or any of the transactions contemplated thereby.
5.2.3 This Agreement, the Note, the Registration Rights Agreement, the
Security Agreement and the Other Documents (if any) have been duly and
validly executed and delivered by Meltronix and constitute legal, valid
and binding obligations of Meltronix, enforceable in accordance with
their terms.
5.3 No Violations. Neither the execution and delivery of this
Agreement, the Note, the Registration Rights Agreement, the Security
Agreement or the Other Documents (if any), nor the consummation of any
of the transactions contemplated thereby, nor compliance by Meltronix
with any of the provisions thereof, will:
(a) violate, conflict with, or result in a breach of any of the
provisions of; constitute a default (or an event which, upon notice or
lapse of time or both, would constitute a default) under; result in the
termination or cancellation of; accelerate the performance required by;
or result in the creation of any lien, security interest, charge or
encumbrance upon any of the assets of Meltronix under any provision of
any note, bond, mortgage, indenture, deed of trust, lease, license or
any other agreement or obligation to which Meltronix is a party or by
which Meltronix or any of its assets may be bound or affected; or
(b) violate or conflict with any order, writ, injunction, decree,
judgment, permit, license, law, rule, regulation or ordinance
applicable to Meltronix or any of its assets.
5.4 No Third Party Consents. Neither the execution and delivery of
this Agreement, the Note, the Registration Rights Agreement, the
Security Agreement or the Other Documents (if any), nor the consummation
of any of the transactions contemplated thereby, nor compliance by
Meltronix with any of the provisions thereof, will require any consent,
approval, authorization or permit from, or any notice, registration or
filing to or with, any governmental or regulatory authority or any other
third party, other than routine disclosure filings that may be required
pursuant to applicable United States securities laws.
5.5 Brokers or Finders. Meltronix has not taken any actions in
connection with the negotiations relating to this Agreement or the
transactions contemplated hereby that could give rise to an obligation
on the part of LJCI to pay any brokerage or finder's fee, commission or
similar compensation to any party in connection therewith.
5.6 Organization; Reporting Company Status.
(a) Meltronix is a corporation duly organized, validly existing and in
good standing under the laws of the state or jurisdiction in which it
is incorporated and is duly qualified as a foreign corporation in all
jurisdictions in which the failure so to qualify would reasonably be
expected to have a material adverse effect on the business, properties,
prospects, condition (financial or otherwise) or results of operations
of Meltronix taken as a whole or on the consummation of any of the
transactions contemplated by this Agreement.
(b) The common stock of Meltronix is traded on the OTC Bulletin Board
service of the National Association of Securities Dealers, Inc.
("OTCBB"), and Meltronix has not received any notice regarding, and to
its knowledge there is no threat of, the termination or discontinuance
of the eligibility of the common stock of Meltronix for such trading.
5.7 Validity of Issuance of the Securities. The Common Stock, upon
issuance in accordance with the provisions of this Agreement, will be
validly issued and outstanding, fully paid and nonassessable, and not
subject to any preemptive rights, rights of first refusal, tag-along
rights, drag-along rights or other similar rights.
5.8 Approvals. No authorization, approval or consent of any court or
public or governmental authority is required to be obtained by
Meltronix for the issuance and sale of the Common Stock issuable to
LJCI pursuant to this Agreement, except such authorizations, approvals
and consents as have been obtained by Meltronix prior to the date
hereof.
5.9 Commission Filings. Meltronix has properly and timely filed with
the United States Securities and Exchange Commission ("Commission")
all reports, proxy statements, forms and other documents required to be
filed with the Commission under the 33 Act and the Securities Exchange
Act of 1934, as amended ("34 Act"), since becoming subject to the 33
and 34 Acts ("Commission Filings"). As of their respective dates,
(i) the Commission Filings complied in all material respects with the
requirements of the 33 Act or the 34 Act, as the case may be, and the
rules and regulations of the Commission promulgated thereunder
applicable to such Commission Filings and (ii) none of the Commission
Filings contained at the time of its filing any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. The
financial statements of Meltronix included in the Commission Filings, as
of the dates of such documents, were true and complete in all material
respects and complied with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto,
were prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (except in the case of
unaudited statements permitted by Form 10-Q under the 34 Act)
applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto) and fairly presented the
consolidated financial position of Meltronix and its subsidiaries
as of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments that in the
aggregate are not material and to any other adjustment described
therein).
5.10 Securities Law Matters. Assuming the accuracy of the
representations and warranties of LJCI set forth in Section 6 hereof,
the offer and sale by Meltronix of the Common Stock issuable to LJCI
pursuant to this Agreement, will be exempt from (i) the registration
and prospectus delivery requirements of the Securities Act of 1933
(as amended) ("33 Act") and the rules and regulations of the Securities
and Exchange Commission thereunder and (ii) the registration and/or
qualification provisions of all applicable state securities and
"blue sky" laws. Meltronix shall not directly or indirectly take, and
shall not permit any of its directors, officers or affiliates directly
or indirectly to take, any action which will make unavailable the
exemption from 33 Act registration being relied upon by Meltronix for
the offer and sale to LJCI of the Common Stock as contemplated by this
Agreement. No form of general solicitation or advertising has been used
or authorized by Meltronix or any of its officers, directors or
affiliates in connection with the offer or sale of the Common Stock as
contemplated by this Agreement, the Note, or any other agreement to
which Meltronix is a party.
5.11 Interest. The timely payment of interest as required pursuant to
the provisions of the Note is not prohibited by the Articles of
Incorporation or By-Laws of Meltronix, in each case as amended to the
date of this Agreement, or any agreement, contract, document or other
undertaking to which Meltronix or any of its subsidiaries is a party.
5.12 No Misrepresentation. No representation or warranty of Meltronix
contained in this Agreement, any annex or exhibit hereto, or in any
agreement, instrument or certificate furnished by Meltronix to LJCI
pursuant to this Agreement, contains any untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
6. Representations and Warranties of LJCI. In addition to any
representations and warranties LJCI may make to Meltronix elsewhere in
this Agreement or in any other document delivered to Meltronix in
connection herewith, LJCI represents and warrants to Meltronix that the
statements contained in this Section 6 are true, accurate, complete,
and not misleading in any material respect, as of the Effective Date.
6.1 Authority Regarding this Agreement.
6.1.1 LJCI has the complete and unrestricted right, power, authority
and capacity to (a) execute and deliver this Agreement, the Note, the
Registration Rights Agreement, and every other document executed and
delivered by LJCI to Meltronix in connection with this Agreement, if
any ("Other Documents"); and (b) carry out and perform each of LJCI's
obligations pursuant to this Agreement, the Note, the Registration
Rights Agreement, and the Other Documents (if any).
6.1.2 No further approvals, actions or proceedings are necessary on the
part of LJCI to authorize this Agreement, the Note, the Registration
Rights Agreement, or the Other Documents (if any) or any of the
transactions contemplated thereby.
6.1.3 This Agreement, the Note, the Registration Rights Agreement,
and the Other Documents (if any) have been duly and validly
executed and delivered by LJCI and constitute legal, valid and
binding obligations of LJCI, enforceable in accordance with their
terms, jointly and severally.
6.2 No Violations. Neither the execution and delivery of this
Agreement, the Note, the Registration Rights Agreement, or the
Other Documents (if any), nor the consummation of any of the
transactions contemplated thereby, nor compliance by LJCI with any
of the provisions thereof, will:
(a) violate, conflict with, or result in a breach of any of the
provisions of; constitute a default (or an event which, upon notice or
lapse of time or both, would constitute a default) under; result in the
termination or cancellation of; accelerate the performance required by;
or result in the creation of any lien, security interest, charge or
encumbrance upon any of the assets of LJCI under any provision of any
note, bond, mortgage, indenture, deed of trust, lease, license or any
other agreement or obligation to which LJCI is a party or by which LJCI
or any of LJCI's assets may be bound or affected; or
(b) violate or conflict with any order, writ, injunction, decree,
judgment, permit, license, law, rule, regulation or ordinance
applicable to LJCI or any of LJCI's assets.
6.3 No Third Party Consents. To the best of LJCI's knowledge, neither
the execution and delivery of this Agreement, the Note, the
Registration Rights Agreement, or the Other Documents (if any), nor
the consummation of any of the transactions contemplated thereby, nor
compliance by LJCI with any of the provisions thereof, will require
any consent, approval, authorization or permit from, or any notice,
registration or filing to or with, any governmental or regulatory
authority or any other third party, other than routine disclosure
filings that may be required pursuant to applicable United States
securities laws.
6.4 Brokers or Finders. LJCI has not taken any actions in connection
with the negotiations relating to this Agreement or the transactions
contemplated hereby that could give rise to an obligation on the part
of Meltronix to pay any brokerage or finder's fee, commission or
similar compensation to any party in connection therewith.
6.5 Securities.
6.5.1 The Common Stock acquired by LJCI pursuant to this Agreement
shall be purchased for LJCI's own account, for investment purposes
only, not for the account of any other person, and not with a view
to distribution, assignment, or resale to others or to
fractionalization in whole or in part except as contemplated by the
Securities Agreement referred to in Section 2.3.
6.5.2 LJCI recognizes that an investment in Meltronix and a purchase
of the Common Stock involves substantial risks, and is completely
cognizant of and understands all of the risk factors related to a
purchase of the Common Stock.
6.5.3 In light of LJCI's particular tax and financial situation,
LJCI has carefully considered and has, to the extent LJCI believes
such discussion is necessary, discussed with LJCI's professional
legal, tax and financial advisors, the suitability of an investment
in Meltronix and a purchase of the Common Stock, and LJCI has
determined that an investment in Meltronix and a purchase of the
Common Stock are a suitable investment for LJCI.
6.5.4 LJCI has such knowledge and experience in financial and
business matters that LJCI is capable of evaluating the merits and
risks of an investment in Meltronix and a purchase of the Common
Stock, and of making an informed investment decision.
6.5.5 LJCI understands that any Common Stock to be issued pursuant
to this Agreement is being offered and sold by Meltronix in reliance
on an exemption from the registration requirements of the 33 Act and
equivalent state securities and "blue sky" laws, and that Meltronix
is relying upon the accuracy of, and LJCI's compliance with, LJCI's
representations, warranties and covenants set forth in this Agreement
to determine the availability of such exemption and the eligibility
of LJCI to acquire any shares of Common Stock pursuant to this
Agreement;
6.5.6 LJCI understands that the Common Stock to be issued to LJCI
pursuant to this Agreement has not been approved or disapproved by
the Securities and Exchange Commission or any state securities
commission.6.6 Disclosure of Information. LJCI acknowledges receipt
of all the information LJCI has requested in connection with the
transactions contemplated by this Agreement. LJCI further acknowledges
having received an opportunity to ask questions and receive answers
from Meltronix, as well as to consult LJCI's own legal, tax and other
advisors, regarding the information provided and the terms and
conditions of this Agreement. LJCI represents and warrants that LJCI
is prepared to lose the entire interest represented by this Agreement
and the shares of Common Stock and has not relied on Meltronix or any
of Meltronix's advisors in determining whether to make this investment
in Meltronix.
6.7 Investment Experience. LJCI acknowledges that it is able to fend
for itself, can bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the transactions
contemplated by this Agreement and in the shares of Common Stock.
LJCI also represents it has not been organized for the purpose of
entering into this Agreement, making the Loan or acquiring the
Common Stock.
6.8 Accredited Investor. LJCI is (i) an "accredited investor" within
the meaning of Rule 501 of Regulation D under the 33 Act, (ii)
experienced in making investments of the kind contemplated by this
Agreement, (iii) capable, by reason of its business and financial
experience, of evaluating the relative merits and risks of an investment
in any Common Stock that may be issued to LJCI pursuant to this Agreement,
(iv) able to afford the loss of its entire investment in any such Common
Stock; and (v) understands the meaning and legal significance of all of
the foregoing provisions.
6.9 Restricted Securities. LJCI understands that the Common Stock is
characterized as "restricted securities" under U.S. federal securities
laws inasmuch as it is being acquired from Meltronix in a transaction
not involving a public offering and without registration under such
laws and applicable regulations and cannot be resold without
registration under the 33 Act, except in certain limited circumstances.
In this connection, LJCI represents that it is familiar with SEC
Rule 144, as currently in effect, and understands the resale
limitations imposed on these securities by the 33 Act.
6.10 Compliance with Securities Laws. Unless otherwise provided herein,
without in any way limiting the representations set forth above, LJCI
further agrees not to make any disposition of all or any portion of any
shares of Common Stock to be issued pursuant to this Agreement, unless
and until the transferee has agreed in writing for the benefit of
Meltronix to be bound by the terms of this Agreement, provided and to
the extent such terms are then applicable, and:
(a) There is then in effect a registration statement under the 33 Act
covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) LJCI shall have (1) notified Meltronix of the proposed
disposition and shall have furnished Meltronix with a detailed
statement of the circumstances surrounding the proposed disposition,
and (2) furnished Meltronix with an opinion of counsel, reasonably
satisfactory to Meltronix, that such disposition will not require
registration of such securities under the 33 Act.
6.11 Legends. All shares of Common Stock issued pursuant to this
Agreement will bear one or all of the following legends:
(a) "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (AS AMENDED), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH SECURITIES,
OR DELIVERY OF AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THESE SECURITIES THAT SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE WITH THE ACT."
(b) Any legend required by the laws of the State of California or other
applicable authority, including any legend required by the California
Department of Corporations and Sections 417 and 418 of the California
Corporations Code.
7. Certain Covenants and Acknowledgments.
7.1 Filings. Meltronix shall make all necessary Commission Filings
and "blue sky" filings required to be made by Meltronix as may be
required by all applicable laws in connection with this Agreement, and
shall provide a copy thereof to LJCI promptly after any such filing.
7.2 Reporting Status. So long as LJCI beneficially owns any of the
Common Stock, Meltronix shall timely file all reports required to be
filed by it with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
7.3 Listing. Except to the extent Meltronix lists its Common Stock on
The New York Stock Exchange, The American Stock Exchange or The Nasdaq
Stock Market, Meltronix shall use its best efforts to maintain its
listing of the Common Stock on OTCBB. If the Common Stock is delisted
from OTCBB, Meltronix will use its best efforts to list the Common
Stock on the most liquid national securities exchange or quotation
system that the Common Stock is qualified to be listed on.
7.4 Information. Each of the parties hereto acknowledges and agrees
that LJCI shall not be provided with, nor be given access to, any
material non-public information relating to Meltronix or any of its
subsidiaries.
7.5 Accounting and Reserves. Meltronix shall maintain a standard and
uniform system of accounting and shall keep proper books and records
and accounts in which full, true, and correct entries shall be made of
its transactions, all in accordance with GAAP applied on consistent
basis through all periods, and shall set aside on such books for each
fiscal year all such reserves for depreciation, obsolescence,
amortization, bad debts and other purposes in connection with its
operations as are required by such principles so applied.
7.6 Transactions with Affiliates. Neither Meltronix nor any of its
subsidiaries shall, directly or indirectly, enter into any transaction
or agreement with any stockholder, officer, director or affiliate of
Meltronix, or family member of any officer, director or affiliate of
Meltronix, unless the transaction or agreement is (i) reviewed and
approved by the Board of Directors of Meltronix in accordance with the
provisions of Section 310 of the California Corporations Code, and (ii)
on terms no less favorable to Meltronix or the applicable subsidiary
than those obtainable from a nonaffiliated person. For purposes of this
Agreement, the term "affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 under the 34 Act.
7.7 Certain Restrictions. So long as the Note is outstanding, no
dividends shall be declared or paid or set apart for payment nor shall
any other distribution be declared or made upon any capital stock of
Meltronix, nor shall any capital stock of Meltronix be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or
other acquisition of shares of Common Stock made for purposes of an
employee incentive or benefit plan (including a stock option plan) of
Meltronix or any subsidiary), for any consideration by Meltronix,
directly or indirectly, nor shall any moneys be paid to or made available
for a sinking fund for the redemption of any shares of any such stock.
8. Miscellaneous Provisions.
8.1 Governing Law. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of
the State of California, United States of America.
8.2 Attorneys' Fees. Subject to the provisions of the Note, in the
event of any legal action between the parties with respect to this
Agreement or the subject matter hereof, the prevailing party shall be
entitled to recover reasonable attorneys' fees in addition to court
costs and litigation expenses incurred in said legal action, regardless
of whether such legal action is prosecuted to judgment.
8.3 Notices. Any notice, demand or other communication required or
permitted under this Agreement shall be deemed given and delivered when
in writing and (a) personally served upon the receiving party, or (b)
upon the third (3rd) calendar day after mailing to the receiving party
by either (i) United States registered or certified mail, postage
prepaid, or (ii) FedEx or other comparable overnight delivery service,
delivery charges prepaid, and addressed as follows:
To Meltronix: Meltronix, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Chief Executive Officer
To LJCI: c/o Xxxxxx Xxxx
La Jolla Cove Investors, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Any party may change the address specified in this section by giving the
other party notice of such new address in the manner set forth herein.
8.4 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or invalid, then this Agreement shall continue
in full force and effect without said provision. If this Agreement
continues in full force and effect as provided above, the parties shall
replace the invalid provision with a valid provision which corresponds
as far as possible to the spirit and purpose of the invalid provision.
8.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the
parties hereto, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall
constitute one document.
8.6 Entire Agreement. This Agreement and the documents and agreements
contemplated herein constitute the entire agreement between the parties
with respect to the subject matter hereof, and supersede all prior oral
or written agreements, representations or warranties between the parties
other than those set forth herein or herein provided for.
8.7 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the permitted successors and assigns,
heirs, executors, and administrators of the parties hereto.
8.8 Amendment and Waiver. No modification or waiver of any provision
of this Agreement shall be binding upon the party against whom it is
sought to be enforced, unless specifically set forth in writing signed
by an authorized representative of that party. A waiver by any party
of any of the terms or conditions of this Agreement in any one instance
shall not be deemed or construed to be a waiver of such terms or
conditions for the future, or of any subsequent breach thereof. The
failure by any party hereto at any time to enforce any of the provisions
of this Agreement, or to require at any time performance of any of the
provisions hereof, shall in no way to be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or
the right of any party to thereafter enforce each and every provision
of this Agreement.
8.9 Survivability. All of the representations, warranties, agreements
and obligations of the parties pursuant to this Agreement shall survive
the closing of any of the transactions contemplated hereby.
8.10 Diligence and Good Faith. LJCI and Meltronix specifically agree
to act diligently, in the utmost good faith and in a timely manner to
perform their respective obligations pursuant hereto, and to carry out
the reasonable intent of the provisions of this Agreement. Each party
hereto shall execute such other and further agreements, documents and
things as reasonable requested by the other parties hereto to effect
the transactions contemplated by this Agreement.
8.11 California Usury Law. All agreements between LJCI and Meltronix
are expressly limited so that in no contingency or event whatsoever
(whether by reason of the advancement of any proceeds under this
Agreement, demand for payment, acceleration of maturity of any unpaid
balance or otherwise) shall the amount paid or agreed to be paid to
Meltronix for the use, forbearance, or detention of any proceeds
advanced or to be advanced hereunder exceed the highest rate permissible
under applicable law. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be in
excess of the applicable limits imposed by the usury laws of the State
of California, it is agreed that any such amount held to be in excess
shall be considered payment of principal hereunder, and the principal
amount any indebtedness evidenced hereby shall be reduced by such amount
so that the total liability for payments in the nature of interest,
additional interest and other charges shall not exceed the applicable
limits imposed by the usury laws of the State of California.
8.12 Opinion. The obligations of LJCI to make the Loan is conditioned
upon the delivery to LJCI of an opinion of counsel to Meltronix as to
the enforceability of this Agreement and the Note in form and substance
reasonably satisfactory to LJCI.
8.13 Reimbursement of Attorneys Fees. Meltronix shall reimburse LJCI
the total amount of the attorneys' fees and expenses incurred by LJCI
in connection with negotiation, preparation, revising and finalizing of
this Agreement, and the other documents contemplated herein. In the
alternative, LJCI shall have the right to deduct from the amount
disbursed to Meltronix pursuant to the Loan the estimated amount of such
fees and expenses.
IN WITNESS WHEREOF, LJCI and Meltronix have duly executed this
Agreement as of the date first above written.
MELTRONIX, INC. LA JOLLA COVE INVESTORS, INC.
a California corporation
By:_________________________________ By:_________________________________
Xxxxxx Xxxxxx,
Executive Officer
Print
Name:______________________________
CC317819.2
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CC317819.2
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