FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment To Loan Agreement ("Amendment") is made and entered
into at Maricopa County, Arizona, this 31, day of March 2000, by and between
XX.Xxx, Inc., a Nevada corporation, formerly RIGL Corporation ("XX.XXX") and
Xxxxxx and Xxxxx Xxx Xxxxxx (collectively "Lender').
RECITALS
A. On or about May 26, 1999, a certain Loan Agreement was executed by
the parties above named in connection with a loan of $2,000,000 made by Lender
to XX.XXX (then known as RIGL Corporation and whose name was changed to XX.Xxx,
Inc. on or about October 1, 1999) which loan is evidenced by a certain
Promissory Note and Stock Pledge Agreement executed concurrently with the Loan
Agreement (collectively "Package").
B. The Package is still in full force and effect according to the
respective terms and conditions therein contained in each of said documents
making up the Package.
C. The Promissory Note is now past due, no default has been declared by
Lender, and to prevent the declaration of default the parties desire to extend
the time of payment provided for in said Promissory Note.
D. The Security Agreement executed concurrently with execution of
documents comprising the Package is also deemed to be in full force and effect
according to its terms, and specifically provides for "all extensions" to be
regarded as part of the original Promissory Note.
E. The Form U CC-I filed and recorded as required by law in the State
of Arizona remains in full force and effect and is deemed by the parties hereto
to be and remain a first priority lien against all of the assets of XX.XXX
included within the scope of Form UCC-I filed of record. To insure that
priority, revised UCC Form 1 and 2 in the form attached will be filed of record.
F. By this Amendment, it is the intention of the parties to permit the
balance of $1,400,000 yet remaining unpaid on the Promissory Note to be paid in
accordance with this Amendment by extended installment payments, and the annual
interest rate to be raised from 8% as stated in the Promissory Note to 10% on
the remaining unpaid balance.
G. Other than for the provisions for extended payments and an increased
rate of annual interest provided for in this Amendment, each and all of the
terms, conditions and provisions of all documents making up the Package, as well
as the Security Agreement and Form UCC-1 shall be and remain in full force and
effect, without amendment thereto.
Page 1 of 3
In consideration of the mutual promises of the parties and other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the parties hereto, it is agreed as follows:
1. Recitals. Each and all of the Recitals above shall be deemed to
be true and correct and are hereby incorporated as a part of this Agreement
as though set forth fully herein.
2. Payment Schedule.
a) The principal balance of the Promissory Note is $1,400,000 as of the
date hereof, and all interest accrued through January 24, 2000 has
been paid in full.
b) The principal unpaid balance shall bear interest at the rate of
ten percent (10%) per annum, default interest shall remain 20%
per annum.
c) Concurrently with the execution of this Amendment YP.Net.lnc. will
pay Lender the sum of $100,000 as for the February 2000 principal
payment, plus the sum of $13,611.12 as and for accrued interest
through February 24, 2000.
d) XX.XXX shall make payments to Lender of not less than one hundred
thousand dollars ($100,000) plus all unpaid accrued interest
per month commencing March 24, 2000, and on the 24th day of each
succeeding month, all principal and accrued interest to be paid in
full on or before March 24, 2001.
e) XX.XXX agrees to execute from time such other agreements or
documents as shall reasonably be requested by Lender to give
effect to this Amendment.
3. Issuance of Certificates. XX.XXX shall cause all of the RIGL
Corporation Common Stock share Certificates previously issued with the Stock
Pledge Agreement to be reissued indicating XX.Xxx, Inc. as the issuing
corporation, and the certificate for 1,000,000 Shares previously issued by RIGL
to Van Sickle shall also be replaced by a YP.Net.lnc. certificate.
4. No Compromise of Position. Nothing herein contained shall be deemed
by the parties hereto to compromise or adversely affect the Lender's rights to
enforce any of the documents making up the Package or the Security Agreement or
Financing Statement hereto executed by XX.XXX, except as specifically provided
for in this Amendment relating to the Promissory Note maturity date and rate of
interest.
5. Signatures. Xxxxxx Xxxxx, the Chairman of the Board of XX.XXX and
XxXxx Xxxxxxx, corporate Secretary of XX.XXX, have been authorized to execute
this Amendment on behalf of XX.XXX.
The parties hereto have executed this Agreement as of the date first above
written.
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XX.XXX, INC.
By: /s/ Xxxxxx Xxxxx Chairman
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Xxxxxx Xxxxx
Chairman of the Board of Directors
By: /s/ XxXxx Xxxxxxx Secretary
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XxXxx Xxxxxxx Secretary
Lender
/s/ Xxxxxx Xxx Xxxxxx
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Xxxxxx Xxx Xxxxxx
/s/ Xxxxx Xxx Xxxxxx
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Xxxxx Xxx Xxxxxx
Page 3 of 3
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is entered into as of the 25th day of
May, 1999 by and between RIGL CORPORATION, a Nevada corporation ("Borrower"),
and XXXXXX and XXXXX XXX XXXXXX ("Lender"), with reference to the following
facts:
WITNESSETH:
WHEREAS, Borrower desires to borrow $2,000,000 from Lender for purposes of
Financing the acquisition of Telco Billing, Inc., a Nevada corporation ("TBI").
WHEREAS, Lender desires to make such loan to Borrower under the terms and
conditions specified in this Agreement.
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
covenants contained herein, Borrower and Lender hereby agree as follows:
ARTICLE I - THE LOAN
1.1 The Loan. Lender hereby agrees to make, and Borrower hereby agrees to
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accept, a loan of $2,000,000 (the "Loan") under the terms and conditions
set forth in this Agreement and in certain documents to be executed and
delivered by Borrower hereunder. The proceeds of the Loan are to be used by
Borrower to finance the acquisition of TBI which is scheduled for closing
on June 1, 1999.
1.2 Note. The Loan shall be evidenced by a Promissory Note of even date
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herewith in the amount of the Loan (the "Note"). Payment of the Loan will
be secured by a Stock Pledge Agreement (the "Stock Pledge") from Borrower,
as Pledgor, and Lender, as Pledgee, which will constitute a priority lien
on the Pledged Collateral, as defined in the Stock Pledge.
1.3 Maturity. The outstanding balance of the Loan, plus accrued and unpaid
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interest thereon, shall be due and payable on the date which is six (6)
months after the date of this Agreement (the "Maturity Date").
1.4 Place of Payments. All payments, whether of principal, interest or other
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amounts, to be made by Borrower to Lender hereunder shall be paid prior to
11:00 a.m. (Eastern Standard Time) on the date upon which payment it to be
made, in lawful money of the United States of America, to Lender at 000
Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000, or at such other place as from time
to time may be designated by Lender. If the day upon which any payment is
to be made is not a business day in the City of Vero Beach, such payment
shall be made on the next succeeding business day and such extension of
time shall be included in computing any interest with respect to such
payment.
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1.5 Prepayment. Borrower may make prepayments of principal under the Note at
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any time, or from time to time, in whole or in part, without penalty
provided that all previously matured interest and other charges accrued to
the date of prepayment are also paid in full. Notwithstanding any partial
prepayments of principal under the Note, there will be no extension in the
Maturity Date or decrease in the amount of the scheduled payments due under
the Note, unless Lender, in its sole and absolute discretion, agrees in
writing to such change.
1.6 Loan Fee. Borrower agrees to pay Lender a loan fee of 1,000,000
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restricted shares of RIGL Corporation Common Stock upon the receipt of
funds by Borrower (the "Loan Fee"). Such shares shall be free of any lien
or encumbrances, fully paid and non-accessible.
1.7 Past Due Principal and Interest. Any amount of principal or interest on
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the Loan or any fee or expense or other amount payable hereunder or under
the Note, the Stock Pledge or any other Loan Documents which is not paid
when due shall, to the extent permitted by law, bear interest from such due
date until paid at the rate of Twenty Percent (20%) per annum (the "Default
Rate"), which interest shall be immediately due and payable. In addition,
the Loan shall bear interest at the Default Rate at any time upon and
during the continuance of any Event of Default.
1.8 Acceleration Upon Default. Upon the occurrence of an Event of Default
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hereunder, under the Note, the Stock Pledge or any of the other Loan
Documents, the holder of the Note or any part thereof shall have the
option, without demand or notice, of declaring the principal balance
thereof and the interest accrued thereon to be immediately due and payable.
1.9 Late Payment Charge. Borrower agrees that it would be extremely
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difficult and impractical to ascertain Lender's actual damages if any
installment of principal or interest is not paid when due. Therefore,
Borrower agrees to pay immediately to Lender in each such event an amount
equal to five percent (5%) of such late installment. Borrower agrees that
under the circumstances existing as of the date this Agreement is executed,
such late charge represents a reasonable estimate of the administrative
costs and expenses which Lender will incur as a result of such late
payment. The provisions of this paragraph are intended to govern only the
determination of damages in the event of a breach in the performance of the
obligation of Borrower to make timely payments hereunder. Nothing herein
shall be construed as an express or implied agreement by Lender to forbear
in the collection of any delinquent payment, or be construed as in any way
giving Borrower the right, express or implied, to fail to make timely
payments hereunder, whether upon payment of such damages or otherwise. The
right of Lender to receive payment of such liquidated and actual damages,
and receipt thereof are without prejudice to the right of Lender to collect
such delinquent payments and any other amounts provided to be paid
hereunder or under any security for the Note, shall not constitute a waiver
of any default by Borrower, and shall not in any way prejudice or prevent
Lender from enforcing or exercising any or all of its rights and remedies
against Borrower or any other party.
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1.10 No Deductions. All payments of principal and interest on the Loan shall
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be made without the right of set-off and without deduction of any present
and future taxes, levies, duties, imposts, deductions, charges or
withholdings imposed by any existing or future law, rule, regulation,
treaty, directive or requirement whether or not having the force of law,
which amounts shall be paid by Borrower. Borrower will pay the amounts
necessary such that the gross amount of the principal and interest received
by Lender is not less than that required by this Agreement. All stamp and
documentary taxes shall be paid by Borrower. If, notwithstanding the
foregoing, Lender pays such taxes, Borrower will reimburse Lender for the
amount paid, as additional interest, within five (5) days of Lender's
demand for payment. Borrower will furnish Lender official tax receipts or
other evidence of payment of all such amounts.
ARTICLE 2- INTEREST RATE PROVISIONS
2.1 Interest Rate. Borrower shall pay interest on the Loan at a rate per
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annum equal to Eight Percent (8%). Interest shall accrue daily, shall be
calculated based upon a 360 day year (which will result in more interest
accruing than if interest accrued on the basis of a 365 day year) and shall
be payable monthly, in arrears together with payments of principal, subject
to and in accordance with the terms, covenants and provisions of the Note.
2.2 Savings Clause. If for any circumstances whatsoever, interest hereunder
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would otherwise be payable to Lender at a rate in excess of that permitted
under applicable law, then, the interest payable to Lender shall be reduced
to the maximum amount permitted under applicable law, and if for any
circumstance Lender shall ever receive anything of value deemed interest by
applicable law which would exceed interest at the highest lawful rate, an
amount equal to any excessive interest shall be applied to the reduction of
the principal amount owing under the Note, and the obligations owing under
this Loan Agreement and the Stock Pledge and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of
principal of the Note and the obligations owing under this Loan Agreement
and the Stock Pledge, such excess shall be refunded to Borrower. All fees,
charges, goods, things in action or any other sums or things of value
(collectively, referred to as the "Additional Sums") paid or payable by
Borrower, whether pursuant to the Note, this Loan Agreement or the Stock
Pledge or any other document or instrument in any way pertaining to the
Loan which, under the laws of the State of Arizona may be deemed to be
interest with respect to the Loan shall, for the purpose of any laws of the
State of Arizona which may limit the maximum amount of interest to be
charged with respect to the Loan, be payable by Borrower as, and shall be
deemed to be, additional interest, and for such purposes only, the agreed
upon and contracted for rate of interest shall be deemed to be increased by
the Additional Sums.
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ARTICLE 3- REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower hereby represents and warrants to Lender as follows, which
representations will remain effective until payment in full of all amounts owing
under the Loan:
3.1 Organization: Existence. Borrower is a corporation, duly organized,
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validly existing and in good standing under the laws of the State of
Nevada.
3.2 Authority. Borrower has the power and authority to execute and deliver
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this Agreement, the Note, the Stock Pledge and all other documents and
instruments required hereunder to be executed by Borrower and to comply
with the terms hereof and thereof. All of such documents have been duly
authorized, executed and delivered by Borrower and constitute the legal,
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their respective terms.
3.3 Loan Fee. Borrower has, and will have, the authority to -deliver the
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Loan Fee upon the Closing.
3.4 Pledged Collateral. Borrower has, and will have, the authority to pledge
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the Pledged Collateral, free of any liens and encumbrances. The Pledged
Collateral shall be fully paid and non-accessible upon the Closing.
3.5 No Violation. To the best of its knowledge after diligent inquiry,
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Borrower is not in violation of any agreement or instrument to which it is
a party or to which any of its property is subject or of any statute, rule,
regulation, judgment, decree, order, franchise or permit applicable to
Borrower. Neither the entry into nor the performance of this Agreement, the
Note, the Stock Pledge or any other instrument executed by Borrower
pursuant hereto or thereto will result in any violation of, or be in
conflict with, or result in the creation of any lien or encumbrance (other
than those contemplated in this Agreement) upon any of the properties or
assets of Borrower pursuant to, or constitute a default under, any
indenture, contract, agreement, or instrument to which Borrower is a party
or to which any of its property is subject or constitute a violation of any
permit, judgment, decree, order, statute, rule or regulation applicable to
Borrower.
3.6 Actions. There is no action, proceeding or investigation pending or
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threatened (or any basis therefor) which questions, directly or indirectly,
the validity of this Agreement, the Note, the Stock Pledge or any other
document pertaining to the Loan or any action taken or to be taken pursuant
hereto or thereto, or which affects Borrower or the Pledged Collateral.
3.7 Statements. Neither this Agreement, nor any document, certificate or
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statement furnished to Lender in connection with the Loan, Borrower or the
Pledged Collateral, whether or not referred to herein, contains any
material misrepresentation or omits to state a material fact.
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3.8 Governmental Regulations. Borrower is not subject to regulation under
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the Investment Company Act of 1940, the Federal Power Act, the Public
Utility Holding Company Act of 1935, the Interstate Commerce Act or any
federal or state statute or regulation limiting its ability to incur
indebtedness for money borrowed.
3.9 Securities Activities. Borrower is not engaged principally or
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significantly in the business of extending credit for the purpose of
purchasing or carrying any "Margin Stock" (as defined in Regulation U of
the Board of Governors of the Federal Reserve System in effect from time to
time) and not more than twenty-five percent (25%) of the value of
Borrower's assets consists of such Margin Stock. No part of the proceeds of
the Loan will be used to purchase or carry any Margin Stock or for any
other purpose that violates the provisions of Regulations U or X of the
Board of Governors of the Federal Reserve System.
ARTICLE 4- CONDITIONS PRECEDENT TO THE LOAN
Lender's obligation to make the Loan to Borrower is conditioned upon each
Of the following occurring prior to May 25, 1999 (the "Closing"):
4.1 Loan Documents. Borrower shall have executed and delivered to Lender the
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Note, the Stock Pledge and this Agreement. The documents described in this
Section 4.1 together with the other documents executed and delivered for
the benefit of Lender in connection with the Loan, are herein called the
"Loan Documents."
4.2 Authorizing Documents. Borrower shall have delivered to Lender and
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Lender shall have approved copies of all necessary actions taken by
Borrower to authorize the execution, delivery and performance by Borrower
of this Agreement, the Note, the Stock Pledge and all other Loan Documents.
4.3 Compliance With Loan Documents. All of the representations and
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warranties of Borrower in Article 3 above shall be true and correct, and
Borrower shall be in compliance with all applicable covenants set forth in
Article 6 below. All documents and materials required by Lender shall be
satisfactory in form and substance to Lender and its counsel.
ARTICLE 5- DISBURSEMENT
5.1 Disbursement. Upon compliance by Borrower with all of the terms and
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conditions of this Agreement, and so long as no Event of Default, or event
has occurred or state of facts exist which with notice or lapse of time or
both, would become an Event of Default, Lender will advance the proceeds of
the Loan upon the Closing in accordance with wiring instructions provided
by Borrower.
5.2 Conditions Solely for the Benefit of Lender. All conditions of Lender's
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obligation to make the Loan are solely for the benefit of Lender, its
successors and assigns. No other person shall have standing to require
satisfaction of any condition, and no other person shall be deemed a
beneficiary of any condition or have any right to rely on any determination
made by Lender, any and all of which may be freely waived in whole or in
part by Lender in Lender's sole discretion.
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ARTICLE 6- COVENANTS OF BORROWER
In addition to the covenants contained elsewhere in this Agreement and in
the other Loan Documents, Borrower agrees as follows:
6.1 Inspection: Books and Records. Borrower shall keep, at its principal
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place of business, the records, books of accounting and all other
documents, reports and papers relating to the Pledged Collateral. Lender,
or any agent of Lender, shall be entitled, at any reasonable time, to
inspect all records relating thereto, and the books and other financial
records of Borrower and Borrower shall cooperate with Lender or such agent
in enabling Lender to accomplish such inspection and permit Lender or such
agent to make such copies as Lender or such agent may request. This
authority is for Lender's protection only and Lender shall not be deemed to
have assumed any responsibility to Borrower or any third party as a result
of any such action.
6.2 Title Exceptions. Borrower shall not create any liens or encumbrances
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upon the Pledged Collateral without the prior written consent of Lender.
6.3 Lenders Expenses. Subject to the further provisions of this Section 6.3,
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Borrower shall pay all reasonable expenses, if any, directly or indirectly
incurred in connection with the Loan and its documentation and closing (the
"Loan Costs"). Notwithstanding the foregoing, Borrower's liability to pay
the Loan Costs shall not exceed $2,000.
6.4 Further Assurances. Borrower will, at the request of Lender, execute,
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deliver and furnish such documents or take such further action as Lender
may deem necessary or desirable to evidence the Loan, perfect the security
therefor, or otherwise carry out the terms of the Agreement and any of the
other documents delivered to Lender in connection herewith.
6.5 No Further Liens. All common stock subject to the lien of the security
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interest granted to Lender in the Stock Pledge shall be fully paid for by
Borrower and no security interest, lien or other encumbrance, other than
that granted to Lender shall exist thereon.
6.6 Removal of Liens. If at any time an encumbrance, lien or charge is
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placed or claimed upon the Pledged Collateral, Borrower shall satisfy and
remove such encumbrance, lien or charge by bonding or by other method
satisfactory to Lender. In addition to all other rights and remedies of
Lender referred to in this Agreement, if such encumbrance, lien or charge
is not removed within thirty (30) days, Lender, at its sole discretion, may
pay off the same and Borrower shall reimburse Lender within five (5) days
of Lender's demand for payment.
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6.7 No Transfer or Further Encumbrance. So long as any amount or obligation
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is outstanding by Borrower to Lender under any of the Loan Documents,
Borrower will not, without the prior written consent of Lender:
a. Further Encumbrance. Create, incur, assume, permit or suffer to
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exist, after knowledge of the existence thereof, pledge, lien,
hypothecation, charge (fixed or floating), security interest or other
encumbrance whatsoever on the Pledged Collateral except the
encumbrance created by and permitted by the Stock Pledge; or
b. Transfer of Property. Sell, convey, or otherwise transfer the
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Pledged Collateral or any portion thereof without the prior written
consent of Lender.
ARTICLE 7- DEFAULTS BY BORROWER
7.1 Defaults by Borrower. The occurrence of any one or more of the following
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shall constitute an "Event of Default":
a. Failure to make any payment when due in accordance with the terms of
the Note, the Stock Pledge, this Loan Agreement or any other document
executed in connection with the Note, which failure is not cured
within five (5) days after written notice thereof by Lender to
Borrower;
b. Failure to perform any of the other terms, covenants and conditions in
the Note, the Stock Pledge, this Loan Agreement or any other
instrument now or hereafter constituting additional security for the
Loan and after expiration often (10) days from the giving of notice of
such failure by Lender to Borrower without such failure having been
cured, unless such failure is of a nature which cannot reasonably be
cured within ten (10) days (which determination shall be made by
Lender in its sole discretion), in which event, the failure to
immediately commence to. cure such failure and thereafter diligently
pursue such cure to completion within a reasonable period of time not
to exceed, however, twenty (20) days after written notice thereof by
Lender to Borrower, it being understood and agreed that Lender may
undertake any action permitted under this Loan Agreement or the Stock
Pledge, during the foregoing cure period if such action is deemed to
be reasonably necessary to protect or preserve any portion of the
Pledged Collateral; provided, however, that no notice and opportunity
to cure any such failure shall be required if in the sole discretion
of Lender the failure is of a nature which cannot be cured;
c. Breach of any warranties or representations made by Borrower to
Lender, including without limitation, those representations and
warranties contained herein or in the Stock Pledge, which breach is
not cured within ten (10) days from the giving of notice of such
breach by Lender to Borrower, unless such breach is of a nature which
cannot reasonably be cured within ten (10) days (which determination
shall be made by Lender in its sole discretion), in which event, the
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failure by Borrower to immediately commence to cure such breach and
thereafter diligently pursue such cure to completion within a
reasonable period of time not to exceed, however, twenty (20) days
after written notice thereof by Lender to Borrower, it begin
understood that Lender may undertake any action permitted under this
Loan Agreement or the Stock Pledge, during the foregoing cure period
if such action is deemed to be reasonably necessary to protect or
preserve any portion of the Pledged Collateral; provided, however,
that no notice and opportunity to cure any such breach shall be
required if, in the sole discretion of Lender, the failure is of a
nature which cannot be cured;
d. Institution of foreclosure or other proceedings to enforce any
subordinate security interest or other lien or encumbrance of any kind
upon the Pledged Collateral or any portion thereof,
e. The occurrence of any of the events described in Section 6.7 without
Borrower obtaining the prior written consent of Lender;
f. The occurrence of an Event of Default under the Note, the Stock
Pledge, this Loan Agreement or any other agreement given by Borrower
to Lender for the purpose of further securing any indebtedness or
obligation secured by the Stock Pledge; or
g. Should Borrower or any successors or assigns thereof:
i. File a petition under any chapter of the Federal Bankruptcy Code
or any similar law, state of federal, whether now or hereafter
existing; or
ii. In any involuntary bankruptcy action commenced against it: (1)
file an answer admitting that it is generally not paying its
debts as such debts become due, (2) fail to obtain a dismissal of
such action within forty-five (45) days of its commencement, (3)
convert the action from one chapter of the Federal Bankruptcy
Code to another chapter of the Federal Bankruptcy Code, or (4) be
the subject of an order for relief in such bankruptcy action; or
iii. Have a "custodian", as that term is defined in the Federal
Bankruptcy Code, appointed for it, or have any court take
jurisdiction of its property, or substantially all thereof, in
any voluntary proceeding for the purpose of reorganization,
arrangement, dissolution, or liquidation, if such custodian shall
not be discharged or if such jurisdiction shall not be
relinquished, vacated or stayed on appeal with forty-five (45)
days of the appointment; or
iv. Make an assignment for the benefit of its creditors; or
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v. Consent to the appointment of a "custodian", as that term is
defined in the Federal Bankruptcy Code, of all of its property or
substantially all thereof.
7.2 Remedies. Upon the occurrence of any Event of Default, Lender shall be
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entitled to declare the Note immediately due and payable and exercise all
other remedies provided to Lender under the Stock Pledge or any other
document or assignment evidencing or securing the Loan or otherwise
available at law, in equity, by statute or set forth herein, including,
without limitation, the appointment of a receiver or the institution of a
suit in equity or other appropriate proceedings for specific performance or
an injunction against a violation of this Loan Agreement or the Stock
Pledge. All such remedies shall be cumulative and the election of one shall
not be exclusive of any other remedy.
ARTICLE 8- MISCELLANEOUS PROVISIONS
8.1 Notice. Any notice given hereunder shall be given in the manner
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prescribed in the Stock Pledge.
8.2 No Assignment. Borrower shall not assign any of its rights under this
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Agreement without the prior written consent of Lender and any purported
assignment in violation of this Section without such prior written consent
shall be void.
8.3 Time. Time is of the essence hereunder.
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8.4 Headings. The captions and headings of various sections of this
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Agreement are for convenience only and are not to be considered as defining
and limiting in any way the scope or intent of the provisions hereof.
8.5 Successors. This Agreement shall be binding upon and shall inure to the
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benefit of all successors and permitted assigns of the parties.
8.6 No Partnership: Indemnity. Lender shall not be deemed to be a partner or
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joint venturer with Borrower in connection with the Loan or any action
taken under this Agreement and Borrower shall indemnify, hold Lender
harmless and defend Lender for, from and against any and all loss, cost,
damage, expense or liability, including reasonable attorneys' fees, arising
out of or resulting from their relationship. The provisions of this Section
shall survive the repayment of the Loan.
8.7 Effectiveness. This Agreement shall continue in full force and effect so
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long as Borrower remains obligated to Lender under this Agreement, the
Note, the Stock Pledge or the other Loan Documents.
8.8 No Waiver. No failure on Lender's part at any time to require the
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performance by Borrower of any term of this Agreement shall in any way
affect Lender's rights to subsequently enforce such term, nor shall any
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omission on Lender's part to notify Borrower of any event which with
notice or the passage of time or both would constitute an Event of Default
be construed as a waiver of such Event of Default or any right or remedy of
Lender, nor shall any waiver by Lender of any term hereof be taken or held
to be a waiver of any other term hereof.
8.9 Governing Law. This Agreement shall be interpreted and enforced under
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the laws of the State of Arizona. Borrower consents to the personal
jurisdiction of the appropriate state or federal court located in Phoenix,
Arizona.
8.10 Waiver of Right to Trial by Jury. To facilitate each party's desire to
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resolve disputes in an efficient and economical manner, each party to this
Agreement hereby expressly waives any right to trial by jury of any claim,
demand, action or cause of action (i) arising under this Agreement or any
other Loan Document, or (ii) in any connected with or related or incidental
to the dealings of the parties hereto or any of them with respect to this
Agreement or any other Loan Document, or the transactions related -hereto
or thereto, in each case whether now existing or hereafter arising, and
whether arising in contract or tort or otherwise. Each party hereby agrees
and consents that any such claim, demand, action or cause of action shall
be decided by court trial without a jury, and that any party to this
Agreement may file an original counterpart or a copy of this Section with
any court as written evidence of the consent of the parties hereto to the
waiver of their right to trial by jury.
8.11 Complete Agreement. The parties hereto hereby represent and acknowledge
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that the Loan Documents are fully integrated and contain the complete
understanding and agreements of the parties with respect to the Loan and
all matters relative thereto and accurately reflect the intentions of the
parties. All prior agreements, negotiations, drafts and other extrinsic
communications relating thereto have been incorporated into or are
superseded by the terms of the Loan Documents and have no further
significance or evidentiary effect.
8.12 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which together shall constitute one and the same
instrument.
8.13 Attorneys' Fees. In the event that an attorney be employed or expense
----------------
be incurred to compel payment of the Loan or any portion thereof or in
connection with any default hereunder or under the Note or Stock Pledge,
whether or not any action or proceeding is commenced by Lender, Borrower
promises to pay all such expenses and attorneys' fees, including but not
limited to, attorneys' fees incurred in any bankruptcy (including, without
limitation, any action for relief from the automatic stay of any bankruptcy
proceeding) or judicial or nonjudicial foreclosure proceedings.
Page -10-
8.14 Interpretation. In this Agreement and the other Loan Documents,
--------------
whenever the context so requires, the masculine gender includes the
feminine and/or neuter and the neuter includes the feminine and/or
masculine and the singular number includes the plural. In this Agreement
and the other Loan Documents, the use of the word "or" is not exclusive and
the use of the word "including" shall not be deemed to limit the generality
of the term or clause to which it has reference, whether or not
non-limiting language (such as "without limitation" or "but not limited to"
or words of similar impact) is used with reference thereto.
IN WITNESS WHEREOF, Borrower and Lender have executed this Loan Agreement
as of the date first above written.
BORROWER:
RIGL CORPORATION, a Nevada
corporation
By: /s/ Xxxxx Xxxxx
---------------------------
Xxxxx Xxxxx
Its: President
LENDER
/s/ Xxxxxx Xxx Xxxxxx
------------------------------
Xxxxxx Xxx Xxxxxx
/s/ Xxxxx Xxx Xxxxxx
------------------------------
Xxxxx Xxx Xxxxxx
Page -11-
STOCK PLEDGE AGREEMENT
This STOCK PLEDGE AGREEMENT (this "Agreement"), dated as of May 25th, 1999,
by and between RIGL CORPORATION, a Nevada corporation having an office at 0000
X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx, Xxxxxxx 00000 (the "Pledgor"), and XXXXXX
and XXXXX XXX XXXXXX whose address is 000 Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000
("Pledgee").
WITNESSETH:
WHEREAS, the Pledgor is the record and beneficial owner of the shares of
common stock (the "Pledged Shares") of RIGL Corporation, a Nevada corporation
publicly traded on the OTC Bulletin Board under the Trading Symbol "RIGN",
described in Schedule 1 hereto; and
WHEREAS, the Pledgor and Pledgee have entered into a Loan Agreement, dated
as of even date herewith, (as at any time amended, modified or supplemented, the
"Loan Agreement"), pursuant to which Pledgee has made or agreed to make a loan
to Pledgor in the amount of $2,000,000; and
WHEREAS, as a condition precedent to the making of the loan under the Loan
Agreement and as security for all of the obligations of the Pledgor under the
Loan Agreement, Pledgee has required that the Pledgor shall have executed and
delivered this Stock Pledge Agreement and granted the security interest
contemplated hereby; and
NOW, THEREFORE, in consideration of the premises and in order to induce
Pledgee to make the loan under the Loan Agreement, it is agreed as follows:
1. Definitions. Capitalized terms used in this Stock Pledge Agreement shall
-----------
have (unless otherwise provided elsewhere in this Stock Pledge Agreement)
the following respective meanings when used herein.
"Agreement" shall mean this Stock Pledge Agreement, including all
amendments, modifications and supplements and any exhibits or schedules to
any of the foregoing, as the same may be in effect at the time such
reference becomes operative.
"Bankruptcy Code" shall mean Xxxxx 00, Xxxxxx Xxxxxx Code, as amended from
time to time, and any successor statute thereto.
"Event of Default" shall have the meaning assigned to such term in the Loan
Agreement.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2 hereof.
Page 1
"Secured Indebtedness" shall mean all liabilities and obligations under,
and as defined in' the Loan Agreement, of Pledgor to Pledgee or any
assignees, indorsee or transferee of Pledgee.
Capitalized terms used herein which are defined in the Loan Agreement shall
have the meanings assigned to such terms therein, unless the context otherwise
requires or unless otherwise defined herein.
2. Pledge. The Pledgor hereby pledges to Pledgee and grants to Pledgee a
------
first priority security interest in the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Shares (the "Pledged Collateral").
3. Security for Obligations. This Agreement secures, and the Pledged
--------------------------
Collateral is security for the prompt payment in full when due, whether at
stated maturity, by acceleration or otherwise, and performance of the
Secured Indebtedness.
4. Delivery of Pledged Collateral. All certificates representing or
---------------------------------
evidencing the Pledged Shares shall be delivered to and held by or on
behalf of Pledgee pursuant hereto and shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Pledgee. From and after the occurrence of an Event of
Default, Pledgee shall have the right, at any time in its discretion and
without notice to the Pledgor, to transfer to or to register in the name of
Pledgee or any of its nominees any or all of the Pledged Shares. In
addition, Pledgee shall have the right at any time to exchange certificates
or instruments representing or evidencing Pledged Shares for certificates
or instruments of smaller or larger denominations.
5. Representations and Warranties. The Pledgor represents and warrants to
--------------------------------
Pledgee that:
a. As of the date hereof, the Pledgor is, and at the time of delivery of
the Pledged Shares to Pledgee pursuant to Section 4 hereof will be,
the sole holder of record and the sole beneficial owner of the Pledged
Collateral free and clear of any lien thereon or affecting the title
thereto except for the lien created by this Agreement;
b. All of the Pledged Shares have been duly authorized, validly issued
and are fully paid and non-assessable;
c. The Pledgor has the right and requisite corporate authority to pledge,
assign, transfer, deliver, deposit and set over the Pledged Collateral
to Pledgee as provided herein;
Page 2
d. None of the Pledged Shares has been issued or transferred in violation
of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject
(except that no representation is made hereunder as to transfers made
by Pledgor);
e. No consent, approval, authorization or other order of any person or
entity is required for the execution and delivery of this Agreement or
the delivery of the Pledged Collateral to Pledgee as provided herein
which has not been obtained;
f. The pledge, assignment and delivery of the Pledged Collateral pursuant
to this Agreement will create a valid first priority lien on and a
first priority perfected security interest in the Pledged Collateral,
and the proceeds thereof, securing the payment of the Secured
Indebtedness;
g. This Agreement has been duly authorized, executed and delivered by the
Pledgor and constitutes a legal, valid and binding obligation 6f the
Pledgor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other
similar laws affecting the rights of creditors generally or by the
application of general equity principles; and
The representations and warranties set forth in this Section 5 shall
survive the execution and delivery of this Agreement.
6. Covenants. The Pledgor covenants and agrees that until the Termination
---------
Date:
a. Without the prior written consent of Pledgee, it will not sell,
assign, transfer, pledge, or otherwise encumber any of its rights in
or to the Pledged Collateral or any unpaid dividends or other
distributions or payments with respect thereto or xxxxx x xxxx in any
therein except as otherwise permitted by the Loan Agreement;
b. The Pledgor will, at its expense, promptly execute, acknowledge and
deliver all such instruments and take all such action as Pledgee from
time to time may request in order to ensure to Pledgee the benefits of
the liens in and to the Pledged Collateral intended to be created by
this Agreement; and
c. The Pledgor has and will defend the title to the Pledged Collateral
and the liens of Pledgee thereon against the claim of any person or
entity and will maintain and preserve such liens until the Termination
Date.
7. Pledgor's Rights. As long as no Default or Event of Default shall have
-----------------
occurred and be continuing and until written notice shall be given to the
Pledgor in accordance with Section 8(a) hereof,
Page 3
a. The Pledgor shall have the right, from time to time, to vote and give
consents with respect to the Pledged Collateral or any part thereof
for all purposes not inconsistent with the provisions of this
Agreement and the Loan Agreement; provided, however, that no vote
shall be cast, and no consent shall be given or action taken, which
would have the effect of impairing the position or interest of Pledgee
in respect of the Pledged Collateral or which would authorize or
effect (except as and to the extent permitted by the Loan Agreement),
i. The dissolution or liquidation, in whole or in part, of Pledgor;
ii. The consolidation or merger of Pledgor with any other person or
entity;
iii. The sale, disposition or encumbrance of all or substantially all
of the assets of the Pledgor;
iv. Any change in the authorized number of shares, the stated capital
or the authorized share capital of Pledgor, or
v. The alteration of the voting rights with respect to the stock of
Pledgor;
b.
i. The Pledgor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends paid in respect of the
Pledged Shares to the extent not in violation of the Loan
Agreement, other than any and all (A) dividends paid or payable
other than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in respect
of, or in exchange for, any Pledged Collateral, (B) dividends and
other distributions paid or payable in cash in respect of any
Pledged Collateral in connection with a partial (except as
permitted in the Loan Agreement) or total liquidation or
dissolution, and (C) cash paid, payable or otherwise distributed
in redemption of, or in exchange for, any Pledged Collateral;
provided, however, that until actually paid all rights to such
dividends shall remain subject to the lien created by this
Agreement; and
ii. All dividends (other than such cash dividends as are permitted to
be paid to the Pledgor in accordance with clause (i) above) and
all other distributions in respect of any of the Pledged Shares,
whenever paid or made, shall be delivered to Pledgee to hold as
Pledged Collateral and shall, if recovered by Pledgor, be
received in trust for the benefit of Pledgee, be segregated from
the other property or funds of Pledgor, and be forthwith
delivered to Pledgee as Pledged Collateral in the same form as so
received (with any necessary endorsement).
Page 4
8. Defaults and Remedies.
-----------------------
a. Upon the occurrence of an Event ~f Default and during the continuation
of such Event of Default, then or at any time after such declaration
(provided that such declaration is not rescinded by Pledgee) and
following written notice to the Pledgor, Pledgee (personally or
through an agent) is hereby authorized and empowered at its election,
to transfer and register in its name or in the name of its nominee the
whole or any part of the Pledged Collateral, to exercise the voting
rights with respect thereto, to collect and receive all cash dividends
and other distributions made thereon, to sell in one or more sales
after seven days' notice of the time and place of any public sale or
of the time after which a private sale is to take place (which notice
the Pledgor agrees is commercially reasonable), but without any
previous notice or advertisement, the whole or any part of the Pledged
Collateral and to otherwise act with respect to the Pledged Collateral
as though Pledgee were the outright owner thereof, the Pledgor hereby
irrevocably constituting and appointing Pledgee as the proxy and
attorney-in-fact of the Pledgor, with full power of substitution to do
so; provided, however, Pledgee shall not have any duty to exercise any
such right or to preserve the same and shall not be liable for any
failure to do so or for any delay in doing so. Any sale shall be made
at a public or private sale at Pledgee's place of business, or at any
public building in the City of Vero Beach to be named in the notice of
sale, either for cash or upon credit or for future delivery at such
price as Pledgee may deem fair, and Pledgee may be the purchaser of
the whole or any part of the Pledged Collateral so sold and hold the
same thereafter in its own right free from any claim of the Pledgor or
any right of redemption. Each sale shall be made to the highest
bidder, but Pledgee reserves the right to reject any and all bids at
such sale which, in its discretion, it shall deem inadequate. Demands
of performance, except as otherwise herein specifically provided for,
notices of sale, advertisements and the presence of property at sale
are hereby waived and any sale hereunder may be conducted by an
auctioneer or any officer or agent of Pledgee.
b. If, at the original time or times appointed for the sale of the whole
or any part of the Pledged Collateral, the highest bid, if there be
but one sale, shall be inadequate to. discharge in full all the
Secured Indebtedness, or if the Pledged Collateral be offered for sale
in lots, if at any of such sales, the highest bid for the lot offered
for sale would indicate to Pledgee, in its discretion, the
unlikelihood of the proceeds of the sales of the whole of the Pledged
Collateral being sufficient to discharge all the Secured Indebtedness,
Pledgee may, on one or more occasions and in its discretion, postpone
any of said sales by public announcement at the time of sale or the
time or previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice
being hereby waived; provided, however, that any sale or sales made
after such postponement shall be after seven days' notice to the
Pledgor.
Page 5
c. In the event of any sale hereunder Pledgee shall, after deducting all
costs or expenses of every kind (including reasonable attorneys' fees
and disbursements) for care, safekeeping, collection, sale, delivery
or otherwise, apply the residue of the proceeds of such sale to the
payment or reduction, either in whole or in part, of the Secured
Indebtedness in accordance with the Loan Agreement, returning the
surplus, if any, to the Pledgor.
d. If, at any time when Pledgee in its sole discretion determines,
following the occurrence and during the continuance of an Event of
Default, that, in connection with any actual or contemplated exercise
of its rights (when permitted under this Section 8) to sell the whole
or any part of the Pledged Collateral hereunder, it is necessary or
advisable to effect a public registration of all or part of the
Pledged Collateral pursuant to the Securities Act of 1933, as amended
(or any similar statute then in effect) (the "Act"), the Pledgor
shall, in an expeditious manner, cause Pledgor to:
i. Prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to the
Pledged Collateral and use its best efforts to cause such
registration statement to become and remain effective.
ii. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the
provisions of the Act with respect to the sale or other
disposition of the Pledged Collateral covered by such
registration statement whenever Pledgee shall desire to sell or
otherwise dispose of the Pledged Collateral.
iii. Furnish to Pledgee such numbers of copies of a prospectus and a
preliminary prospectus, in conformity with the requirements of
the Act, and such other documents as Pledgee may request in order
to facilitate the public sale or other disposition of the Pledged
Collateral by Pledgee.
iv. Use its best efforts to register or qualify the Pledged
Collateral covered by such registration statement under such
other securities or blue sky laws of such jurisdictions within
the United States as Pledgee shall request, and do such other
reasonable acts and things as may be required of it to enable
Pledgee to consummate the public sale or other disposition in
such jurisdictions of the Pledged Collateral by Pledgee.
Page 6
v. Furnish, at the request of Pledgee, on the date that shares of
the Pledged Collateral are delivered to the underwriters for sale
pursuant to such registration or, if the security is not being
sold through underwriters, on the date that the registration
statement with respect to such shares of the Pledged Collateral
becomes effective, (A) an opinion, dated such date, of the
independent counsel representing such registrant for the purposes
of such registration, addressed to the underwriters, if any, and
in the event the Pledged Collateral is not being sold through
underwriters, then to Pledgee, stating that such registration
statement has become effective under the Act and that (1) to the
best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under
the Act, (2) the registration statement, the related prospectus,
and each amendment or supplement there, comply as to form in all
material respects with the requirements of the act and the
applicable rules and regulations of the Commission thereunder
(except that such counsel need express no opinion as to financial
statements or other financial or statistical data contained
therein), (3) such counsel has no reason to believe that either
the registration statement or the prospectus, or any amendment or
supplement thereto, contains any untrue statement of a material
fact or omits a material fact required to be stated therein or
necessary to make the statements therein not misleading, (4) the
descriptions in the registration statement or the prospectus, or
any amendment or supplement thereto, of all legal matters and
contracts and other legal documents or instruments are accurate
and fairly present the information required to be shown, and (5)
such counsel does not know of any legal or governmental
proceedings, pending or threatened, required to be described in
the registration statement or prospectus, or any amendment or
supplement thereto, which are not described as required, nor of
any contracts or documents or instruments of a character required
to be described in the registration statement or prospectus, or
any amendment or supplement thereto, or to be filed as exhibits
to the registration statement which are not described and filed
or incorporated by reference as required; and (B) a letter, dated
such date, from the independent certified public accountants of
such registrant, addressed to the underwriters, if any, and in
the event the Pledged Collateral is not being sold through
underwriters, then to Pledgee, stating that they are independent
certified public accountants within the meaning of the Act and
that, in the opinion of such accountants, the financial
statements and other financial data of such registrant included
in the registration statement or the prospectus, or any amendment
or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Act. The
opinion of counsel referred to above shall additionally cover
such other legal matters with respect to the registration in
respect of which such opinion is being given as Pledgee may
reasonably request. The letter referred to above from the
independent certified public accountants shall additionally cover
Page 7
such other financial matters (including information as to the
period ending not more than five (5) Business Days prior to the
date of such letter) with respect to the registration in respect
of which such letter is being given as Pledgee may reasonably
request.
vi. Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, but not
later than 18 months after the effective date of the registration
statement, an earnings statement covering the period of at least
12 months beginning with the first full month after the effective
date of such registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
e. All expenses incurred in complying with Section 8(d) hereof,
including, without limitation, all registration and filing fees
(including all expenses incident to filing with the National
Association of Securities Dealers, Inc.), printing expenses, fees and
disbursements of counsel for the registrant, the fees and expenses of
counsel for Pledgee, expenses of the independent certified public
accountants (including any special audits incident to or required by
any such registration) and expenses of complying with the securities
or blue sky laws of any jurisdictions, shall be paid by the Pledgor,
except that the Pledgor shall not be liable for any discounts or
commissions to any underwriter or any fees of disbursements of counsel
for any underwriter in respect of the securities sold by Pledgee.
f. If, at any time when Pledgee shall determine to exercise its right to
sell the whole or any part of the Pledged Collateral hereunder, such
Pledged Collateral or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Act, Pledgee
may, in its discretion (subject only to applicable requirements of
law), sell such Pledged Collateral or part thereof by private sale in
such manner and under such circumstances as Pledgee may deem necessary
or advisable, but subject to the other requirements of this Section 8,
and shall not be required to effect such registration or to cause the
same to be effected. Without limiting the generality of the foregoing,
in any such event Pledgee in its discretion (a) may, in accordance
with applicable securities laws, proceed to make such private sale
notwithstanding that a registration statement for the purpose of
registering such Pledged Collateral or part thereof could be or shall
have been filed under said Act (or similar statute), (B) may approach
and negotiate with a single possible purchaser to effect such sale,
and (c) may restrict such sale to a purchaser who will represent and
agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such
Pledged Collateral or part thereof. In addition to a private sale as
provided above in this Section 8, if any of the Pledged Collateral
shall not be freely distributable to the public without registration
under the Act (or similar statute) at the time of any proposed sale
pursuant to this Section 8, then Pledgee shall not be required to
Page 8
effect such registration or cause the same to be effected but, in its
discretion (subject only to applicable requirements of law), may
require that any sale hereunder (including a sale at auction) be
conducted subject to restrictions (i) as to the financial
sophistication and ability of any person or entity permitted to bid or
purchase at any such sale, (ii) as to the content of legends to be
placed upon any certificates representing the Pledged Collateral sold
in such sale, including restrictions on future transfer thereof, (iii)
as to the representations required to be made by each Person bidding
or purchasing at such sale relating to that person's or entity's
access to financial information about the Pledgor and such person's or
entity's intentions as to the holding of the Pledged Collateral so
sold for investment, for its own account, and not with a view to the
distribution thereof, and (iv) as to such other matters as Pledgee
may, in its discretion, deem necessary or appropriate in order that
such sale (notwithstanding any failure so to register) may be effected
in compliance with the Code and other laws affecting the enforcement
of creditors' tights and the Act and all applicable state securities
laws.
g. The Pledgor acknowledges that notwithstanding the legal availability
of a private sale or a sale subject to the restrictions described
above in paragraph (f), Pledgee may, in its discretion, elect to
register any or all the Pledged Collateral under the Act (or any
applicable state securities law) in accordance with its rights
hereunder. The Pledgor, however, recognizes that Pledgee may be unable
to effect a public sale of any or all the Pledged Collateral and may
be compelled to resort to one or more private sales thereof. The
Pledgor also acknowledges that any such private sale may result in
prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a
commercially reasonable manner. Pledgee shall be under no obligation
to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the registrant to register such securities
for public sale under the Act, or under applicable state securities
laws, even if the Pledgor would agree to do so.
h. The Pledgor agrees that following the occurrence and during the
continuance of an Event of Default it will not at any time plead,
claim or take the benefit of any appraisal, valuation, stay,
extension, moratorium or redemption law now or hereafter in force in
order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or
the possession thereof by any purchaser at any sale hereunder, and the
Pledgor waives the benefit of all such laws to the extent it lawfully
may do so. The Pledgor agrees that it will not interfere with any
right, power and remedy of Pledgee provided for in this Agreement or
now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by Pledgee of
any one or more of such rights, powers or remedies. No failure or
delay on the part of Pledgee to exercise any such right, power or
Page 9
remedy and no notice or demand which may be given to or made upon the
Pledgor by Pledgee with respect to any such remedies shall operate as
a waiver thereof, or limit or impair Pledgee's right to take any
action or to exercise any power or remedy hereunder, without notice
or demand, or prejudice its tights as against the Pledgor in any
respect.
i. The Pledgor further agrees that a breach of any of the covenants
contained in this Section 8 will cause irreparable injury to Pledgee,
that Pledgee has no adequate remedy at law in respect of such breach
and, as a consequence, agrees that each and every covenant contained
in this Section 8 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that the Secured Indebtedness is not then due and
payable in accordance with the agreements and instruments governing
and evidencing such obligations. The Pledgor further acknowledges the
impossibility of ascertaining the amount of damages which would be
suffered by Pledgee by reason of a breach of any of such covenants
and, consequently, agrees that, if Pledgee shall xxx for damages for
breach, it shall pay, as liquidated damages and not as a penalty, an
amount equal to the lesser of (i) the value of the Pledged Collateral
on the date Pledgee shall demand compliance with this Section 8. and
(ii) the amount required to pay in full the obligations described in
paragraphs (a) and (b) of Section 9 below on such date.
9. Application of Proceeds. Any cash held by Pledgee as Pledged Collateral
-------------------------
and all cash proceeds received by Pledgee in respect of any sale of,
liquidation of, or other realization upon all or any part of the Pledged
Collateral shall be applied by Pledgee as follows:
a. First, to the payment of the costs and expenses of such sale,
including reasonable compensation to Pledgee and its agent and
counsel, and all expenses, liabilities and advances made or incurred
by Pledgee in connection therewith; and
b. Next, to the payment of the Secured Indebtedness, all in accordance
with the terms and provisions of the Loan Agreement, and
c. Finally, after payment in full of all Secured Indebtedness, to the
payment to the Pledgor, or its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
10. Waiver. No delay on the part of Pledgee in exercising any power of sale,
------
lien, option or other right hereunder, and no notice or demand which may be
given to or made upon the Pledgor by Pledgee with respect to any power of
sale, lien, option or other right hereunder, shall constitute a waiver
thereof~ or limit or impair Pledgee's right to take any action or to
exercise any power of sale, lien, option, or any other right hereunder,
without notice or demand, or prejudice Pledgee's rights as against the
Pledgor in any respect.
Page 10
11. Assignment. Pledgee may assign, indorse or transfer any instrument
----------
evidencing all or any part of the Secured Indebtedness as provided in, and
in accordance with, the Loan Agreement and the holder of such instrument
shall be entitled to the benefits of this Agreement.
12. Termination. Immediately following the payment of all Secured
-----------
Indebtedness, Pledgee shall deliver to the Pledgor the Pledged Collateral
at the time subject to this Agreement and all instruments of assignment
executed in connection therewith, free and clear of the liens hereof and,
except as otherwise provided herein, all of the Pledgor's obligations
hereunder shall at such time terminate.
13. Lien Absolute. All rights of Pledgee hereunder, and all obligations of
--------------
the Pledgor hereunder, shall be absolute and unconditional irrespective of:
a. Any lack of validity or enforceability of the Loan Agreement or any
other agreement or instrument governing or evidencing any other
Secured Indebtedness;
b. Any change in the time, manner or place of payment of, or in any other
term of, all or any part of the Secured Indebtedness, or any other
amendment or waiver of or any consent to any departure from the Loan
Agreement or any other agreement or instrument governing or evidencing
any other Secured Indebtedness;
c. Any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Secured Indebtedness; or
d. Any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Pledgor.
14. Release. The Pledgor consents and agrees that Pledgee may at any time,
--------
or from time to time, in its discretion (a) renew, extend or change the
time or payment, and/or the manner, place or terms of payment of all or any
part of the Secured Indebtedness and (b) exchange, release and/or surrender
all or any of the Pledged Collateral, or any part(s) thereof, by whomsoever
deposited, which is now or may hereafter be held by Pledgee in connection
with all or any of the Secured Indebtedness; all in such manner and upon
such terms as Pledgee may deem proper, and without notice to or further
assent from the Pledgor, it being hereby agreed that the Pledgor shall be
and remain bound upon this Agreement, irrespective of the existence, value
or condition of any of the Pledged Collateral, and notwithstanding any such
change, exchange, settlement, compromise, surrender, release, renewal or
extension, and notwithstanding also that the Secured Indebtedness may, at
any time(s) exceed the aggregate principal amount thereof set forth in the
Loan Agreement. The Pledgor hereby waives notice of acceptance of this
Agreement, and also presentment, demand, protest and notice of dishonor of
any and all of the Secured Indebtedness, and promptness in commencing suit
against any party hereto or liable hereon, and in giving any notice to or
of making any claim or demand hereunder upon the Pledgor. Not act or
omission of any kind on Pledgee's part shall in any event affect or impair
this Agreement.
Page 11
15. Indemnification. The Pledgor agrees to indemnify and hold Pledgee
---------------
harmless from and against any taxes, liabilities, claims and damages,
including reasonable attorney's fees and disbursements, and other expenses
incurred or arising by reason of the taking or the failure to take action
by Pledgee, in good faith, in respect of any transaction effected under
this Agreement or in connection with the lien provided for herein,
including, without limitation, any taxes payable in connection with the
delivery or registration of any of the Pledged Collateral as provided
herein. Whether or not the transactions contemplated by this Agreement
shall be consummated, the Pledgor agrees to pay to Pledgee all
out-of-pocket costs and expenses incurred in connection with this Agreement
and all reasonable fees expenses and disbursements, including registration
costs under the Act (or similar statute) and the reasonable fees of
Pledgee's agents or representatives, incurred in connection with the
execution and delivery of this Agreement and the performance by Pledgee of
the provisions of this Agreement and of any transactions effected in
connection with this Agreement. The obligations of the Pledgor under this
Section 15 shall survive until payment and discharge in full of the Loan.
16. Reinstatement. This Agreement shall remain in full force and effect and
-------------
continue to be effective should any petition be filed by or against the
Pledgor for liquidation or reorganization, should the Pledgor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Pledgor's assets, and shall continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Secured
Indebtedness, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Secured Indebtedness, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Secured
Indebtedness shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
17. Miscellaneous.
-------------
a. The Pledgor agrees to promptly reimburse Pledgee for actual
out-of-pocket expenses, including, without limitation, reasonable
counsel fees, incurred by Pledgee in connection with the
administration and enforcement of this Agreement.
b. Neither Pledgee nor any of its officers, directors, employees, agents
or counsel shall be liable for any action lawfully taken or omitted to
be taken by it or them hereunder or in connection herewith, except for
its or their own gross negligence or willful misconduct.
Page 12
c. This Agreement shall be binding upon the Pledgor and its successors
and assigns, and shall inure to the benefit of, and be enforceable by,
Pledgee and its successors, and assigns, and shall be governed by, and
construed and enforced in accordance with, the internal laws in effect
in the State of Arizona without giving effect to principles of choice
of law, and none of the terms or provisions of this Agreement may be
waived, altered, modified or amended except in writing duly signed for
and on behalf of Pledgee and the Pledgor.
18. Severability. If for any reason any provision or provisions hereof are
------------
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid.
19. Notices. Except as otherwise provided herein, whenever it is provided
-------
herein that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon either of the
parties by the other, or whenever either of the parties desires to give or
serve upon the other communication with 1~espect to this Agreement, each
such notice, demand request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person
with receipt acknowledged or sent by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
a. If to Pledgee, at:
Xxxxxx and Xxxxx Xxx Xxxxxx
000 Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
With copies to:
Xxxxxxx, Brown, Caldwell, Xxxxxxx & Xxxxxxxxxx
000 Xxxxxxxxx Xxxx.
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
Fax: (000) 000-0000
b. If to Pledgor, at:
RIGL Corporation
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. X'Xxxx, Esq.
Fax: (000) 000-0000
Or at such other address as may be substituted by notice given as
herein provided.
Page 13
The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration or other communication
hereunder shall be deemed to have been duly given or served on the
date on which personally delivered, with receipt acknowledged, or
three (3) Business Days after the same shall have been deposited in
the United States mail. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall
in no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication.
20. Section Titles. The Section titles contained in this Agreement are and
---------------
shall be without substantive meaning or content, of any kind whatsoever and
are not a part of the agreement between the parties hereto.
21. Counterparts. This Agreement may be executed in any number of
------------
counterparts, which shall, collectively and separately, constitute one
agreement.
IN WITNESS WHEREOF, the patties hereto have caused this Stock Pledge
Agreement to be duly executed as of the date first written above.
PLEDGOR:
RIGL CORPORATION, a Nevada
corporation
PLEDGEE:
/s/ Xxxxxx Xxx Xxxxxx
-----------------------------
Xxxxxx Xxx Xxxxxx
/s/ Xxxxx Xxx Xxxxxx
-----------------------------
Xxxxx Xxx Xxxxxx
Page 14
SCHEDULE 1
TO STOCK PLEDGE AGREEMENT
Attached to and forming a part of that certain Stock Pledge Agreement dated as
of May 25 1999, by and between RIGL CORPORATION as Pledgor and XXXXXX and XXXXX
--
VAN SICKLE as Pledgee.
Stock Issuer: RIGL Corporation
Common Stock Class of Stock:
Stock Certificate No.: 2481
No. of Shares: 2.5 Million
Page 15
PROMISSORY NOTE
PRINCIPAL SUM: $2,000,000 DATE: May 25, 1999
INTEREST: 8%
DUE AND PAYABLE: November 22, 1999 (180 days)
FOR VALUE RECEIVED, the undersigned RIGL CORPORATION, a Nevada corporation
("Make?'), promises to pay to the order of XXXXXX and XXXXX XXX XXXXXX
("Holder") whose address is 000 Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000, or at
such other place as the Holder hereof may from time to time designate in
writing, the principal sum of TWO MILLION DOLLARS ($2,000,000) plus interest
calculated at a rate of Eight Percent (8%) annually from the date hereof on the
principal balance from time to time outstanding as hereinafter provided:
principal, interest and other sums payable hereunder to be paid in lawful money
of the United States of America in monthly installments equal to that amount
charged to Holders' account at Xxxxxxx Xxxxx Barney commencing July 1, 1999 and
upon the first day of each month thereafter for the following four (4) months
with the remaining outstanding balance plus accrued interest to be paid no later
than 180 days from date of this Note. As additional consideration, upon the
execution of this Note, Maker shall deliver to Holder 1,000,000 restricted
common shares of RIGL Corporation validly issued, fully paid and non-accessible,
evidenced by a certificate(s) in the name of Holder or their designee.
The term Holder shall refer to the original Holder and upon transfer, to
any and all subsequent holders of this Note.
Maker agrees to an effective date of interest that is the rate stated above
plus and additional rate of interest resulting from any other charges in the
nature of interest paid or to be paid in connection with this Note. All fees,
charges, goods and things in action or any other sums or things of value other
that the interest resulting from the Stated Interest Rate and the Default
Interest rate, as applicable, paid or payable by Maker (collectively, the
"Additional Sums"), whether pursuant to this Note, or any other document or
instrument in any way pertaining to this lending transaction, or otherwise with
respect to this lending transaction, shall, for the purpose of any laws of the
State of Arizona that may limit the maximum amount of interest to be charged
with respect to this lending transaction, be payable by Maker as, and shall be
deemed to be, additional interest, and for such purposes only, the agreed upon
and "contracted for rate of interest" of this lending transaction shall be
deemed to be increased by the rate of interest resulting from Additional Sums.
Maker understands and believes that this lending transaction complies with the
usury laws of the State of Arizona; however, if any interest or other charges in
connection with this lending transaction are ever determined to exceed the
maximum amount permitted by law, then Maker agrees that (a) the amount of
interest or charges payable pursuant to this lending transaction shall be
reduced to the maximum amount permitted by law and (b) any excess amount
previously collected from Maker in connection with this lending transaction that
exceeded the maximum amount permitted by law, will be credited against the
principal balance then outstanding hereunder. If the outstanding principal
balance hereunder has been paid in full, the excess amount paid will be refunded
to Maker.
Page l of 3
All payments on this Note shall be applied first to the payment of any
costs, fees or other charges incurred in connection with the indebtedness
evidenced hereby, next to the payment of accrued interest and then to the
reduction of the principal balance.
Time is of the essence of this Note. At the option of Holder, (i) Holder
may declare the entire unpaid principal balance, all accrued and unpaid interest
and all other amounts payable hereunder immediately due and payable without
notice upon the failure to pay any sum due and owing hereunder as provided
herein if such failure continues for five (5) days after the due date; or (ii)
Holder may require Maker to pay interest on the late payment at the Default
Interest rate (as defined below) from the date the payment becomes due until
Maker pays in full all accrued and unpaid interest due under this Note.
Maker shall bear all costs and expenses resulting from any check made by
Maker for payment hereunder which is returned "NSF", wherein the late payment
provisions set forth above shall apply until all charges, accrued and unpaid
interest due and owing under this Note are paid in full, plus an additional
TWENTY AND NO/100THS DOLLARS ($20.00).
After maturity, including maturity upon acceleration, the unpaid principal
balance, all accrued and unpaid interest and all other amounts payable hereunder
shall bear interest the rate of TWENTY PERCENT (20%) (the "Default Interest
Rate"). Maker shall pay all costs and expenses, including reasonable attorney's
fees and court costs, incurred in the collection or enforcement of all or any
part of this Note. Such court costs and attorney's fees shall be set by the
court and not by jury, shall be included in any judgment obtained by Holder.
Maker shall have the option to prepay this Note, in full or in part, at any
time without penalty.
Failure of Holder to exercise any option hereunder shall not constitute a
waiver of the right to exercise the same in the event of any subsequent default
or in the event of continuance of any existing default after demand for strict
performance.
Maker, sureties, guarantors and endorsers hereof: (a) agree to be jointly
and severally bound, (b) severally waive any homestead or exemption right
against said debt, (c) severally waive demand, diligence, presentment for
payment, protest and demand, and notice of extension, dishonor, protest, demand
and nonpayment of Note, (d) consent that Holder may extend the time of payment
or otherwise modify the terms of payment of any part or the whole of the debt
evidence by this Note, at the request of any other person primarily liable
hereon, and such consent shall not alter nor diminish the liability of any
person, and (e) agree that Holder may setoff at any time any sums or property
owed to any of them by Maker.
Page 2 of 3
All notices required or permitted in connection with this Note shall be
given at the address set forth above.
The Note is secured by a Security Agreement of even date herewith.
This Note shall be construed according to the laws of the State of Arizona.
IN WITNESS WHEREOF, this Note has been executed as of the date first
written above.
MAKER:
RIGL CORPORATION
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxxx 00000
By: /s/ Xxxxx Xxxxx
------------------------------------
Xxxxx Xxxxx, President
Page 3 of 3
