BRIDGE LOAN AGREEMENT
THIS
BRIDGE LOAN AGREEMENT ("Loan
Agreement")
is
dated as of March ___, 2008, by and between Brighton Partners, LLC a Utah
Limited Liability Company, having an office at 0000 Xxxx Xxxxxx Xxxx, Xxxx
Xxxx
Xxxx Xxxx 00000, (“Brighton”) and ZAGG, Inc., a Nevada corporation, having an
office at 3855 So. 000 Xxxx, Xxxxx X, Xxxx Xxxx Xxxx, Xxxx 00000
("ZAGG").
WITNESSETH
WHEREAS,
Brighton wishes to induce ZAGG to loan to Brighton, and ZAGG is willing to
loan
to Brighton, subject to the terms and conditions set forth herein, up to Five
Hundred Thousand Dollars, (US$ 500,000) United States Dollars with an initial
amount of $200,000 and $300,000 upon fulfillment of the terms stated herein.
NOW,
THEREFORE, for and in consideration of the premises and the mutual agreement
contained herein and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.
LOAN.
Subject
to the terms and conditions set forth herein, ZAGG shall loan to Brighton an
initial Two Hundred Thousand (US$200,000) United States Dollars in one
installment, by delivery of such amount to Brighton in U.S. funds by wire
transfer to an account designated by Brighton, and an additional Three Hundred
Thousand (US$300,000) United States Dollars (together, the "Loan")
provided that Brighton supplies ZAGG with evidence of rights to be acquired
by
Brighton in connection with American Gladiators Superhero series currently
in
development with Brighton Partners and POW! Entertainment (Xxxx Xxx).
2.
NOTE.
The
terms of the Loan shall be repayment within 90 days from receipt by Brighton
plus 10% interest at term and 3% origination fees, and other terms and
conditions as set forth in the Secured Promissory Note (the "Note"),
in
the form attached hereto as Exhibit “A.”
3.
MUTUAL
DELIVERIES.
(a)
Upon
the delivery by ZAGG of the initial Two Hundred Thousand (US$200,000) United
States Dollars as provided in Section 1 above, Brighton shall deliver to ZAGG
the Note duly executed for Five Hundred Thousand (US$500,000) United States
Dollars. If Brighton is unable to comply with the condition provided in Section
1 above for the additional Three Hundred Thousand (US$300,000) United States
Dollars, the parties agree to amend the Note to account for only the initial
Two
Hundred Thousand (US$200,000) United States Dollars.
(b)
As an
additional condition of this Agreement, Brighton shall also deliver, or cause
to
be delivered, the original or execution copies of the following instruments
and
agreements duly executed by all parties thereto other than ZAGG (together with
the Note - the "Related Agreements"):
|
i.
|
the
Secured Promissory Note in the form attached hereto as Exhibit
“A”
|
|
ii.
|
the
Cross-License Agreement in the form attached hereto as Exhibit “B.”
|
|
iii.
|
the
Security Agreement in the form attached hereto as Exhibit
“C.”
|
|
iv.
|
the
Option Agreement in the form attached hereto as Exhibit
“D.”
|
|
v.
|
Brighton
will also deliver to ZAGG the following:
|
|
a.
|
A
sponsorship for ZAGG to advertise in all publication that Brighton
and
POW! Entertainment are involved in including comic books.
|
|
x.
|
Xxxx
(Xxx Xxxxxxxxx Xxxxxx) as a spokes person for ZAGG to include a photo
shoot of Don with the ZAGG products for use by ZAGG in publications
and
internet use.
|
|
c.
|
Personal
appearances by Xxx Xxxxxx at ZAGG sponsored events such as tradeshows
etc.
|
|
d.
|
500,000
shares of Bio-Path, Inc. as collateral to ZAGG until the repayment
of the
notes in full plus interest and origination fees.
|
4.
REPRESENTATIONS
AND WARRANTIES OF BRIGHTON.
Brighton represents and warrants to ZAGG that:
(a)
Brighton has the corporate power and authority to enter into this Loan Agreement
and the Related Agreements and to perform its obligations hereunder and
thereunder. The execution and delivery by Brighton of this Loan Agreement and
the Related Agreements and the consummation by Brighton of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of Brighton. This Loan Agreement and the Related
Agreements have been duly executed and delivered by Brighton and constitute
valid and binding obligations of Brighton enforceable against it in accordance
with their respective terms, subject to the effects of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and to the application of equitable principles
in
any proceeding (legal or equitable).
(b)
The
execution, delivery and performance by Brighton of this Loan Agreement and
the
Related Agreements and the consummation of the transactions contemplated hereby
and thereby do not and will not breach or constitute a default under any
applicable law or regulation or of any agreement, judgment, order, decree or
other instrument binding on Brighton which breach or default could reasonably
be
expected to have a material adverse effect on Brighton.
(c)
Brighton is in material compliance with all applicable laws, regulations,
judgments, decrees and orders material to the conduct of its
business.
(d)
There
is no pending, or to the knowledge of Brighton, threatened, judicial,
administrative or arbitral action, claim, suit, proceeding or investigation
which might affect the validity or enforceability of this Loan Agreement or
the
Related Agreements or which involves Brighton and which if adversely determined,
could reasonably be expected to have a material adverse effect on
Brighton.
(e)
No
consent or approval of, or exemption by, or filing with, any party or
governmental or public body or authority is required in connection with the
execution, delivery and performance under this Loan Agreement or the Related
Agreements or the taking of any action contemplated hereunder or
thereunder.
(f)
Brighton has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its formation. Brighton
is
duly qualified and licensed and in good standing as a corporation in each
jurisdiction in which its current ownership or leasing of any properties or
its
ownership or leasing of any properties or the character of its operations as
currently conducted requires such qualification or licensing, except where
the
failure to be so qualified would not have a material adverse effect on Brighton.
Brighton has all power and authority, and has obtained all necessary
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental or regulatory officials and bodies
necessary to own or lease its properties and conduct its business other than
those authorizations, approvals and such other documents the lack of which
could
not reasonably be expected to have a material adverse effect on
Brighton.
(g)
The
execution, delivery and performance of this Agreement by Brighton and the
Related Agreements to be delivered hereunder and the consummation of the
transactions contemplated hereby and thereby will not: (i) violate any provision
of Brighton's corporate formation documents, (ii) violate, conflict with or
result in the material breach of any of the terms of, result in a material
modification of the effect of, or otherwise give any other contracting party
the
right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any contract or other agreement to which Brighton
is a party or by or to which Brighton or any of Brighton's assets or properties
may be bound or subject, (iii) violate any order, judgment, injunction, award
or
decree of any court, arbitrator or governmental or regulatory body by which
Brighton, or the assets or properties of Brighton are bound, (iv) to Brighton's
knowledge, violate any statute, law or regulation.
(h)
There
has been no material change in the capitalization, assets, or liabilities of
Brighton since the issuance of the financial statements, for the period ending
September 30, 2006, delivered to ZAGG.
5.
REPRESENTATIONS
AND WARRANTIES OF ZAGG.
ZAGG
hereby represents and warrants to Brighton that:
(a)
ZAGG
has the corporate power and authority to enter into this Loan Agreement and
the
Related Agreements and to perform its obligations hereunder and thereunder.
The
execution and delivery by ZAGG of this Loan Agreement and the Related Agreements
and the consummation by ZAGG of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
ZAGG.
This Loan Agreement and the Related Agreements have been duly executed and
delivered by ZAGG and constitute valid and binding obligations of ZAGG,
enforceable against it in accordance with their respective terms, subject to
the
effects of any applicable bankruptcy, insolvency, reorganization, moratorium
or
similar laws affecting creditors' rights generally and to the application of
equitable principles in any proceeding (legal or equitable).
(b)
The
execution, delivery and performance by ZAGG of this Loan Agreement and the
Related Agreements and the consummation of the transactions contemplated hereby
and thereby do not and will not breach or constitute a default under any
applicable law or regulation or of any agreement, judgment, order, decree or
other instrument binding on ZAGG.
(c)
There
is no pending, or to the knowledge of ZAGG, threatened, judicial, administrative
or arbitral action, claim, suit, proceeding or investigation which might affect
the validity or enforceability of this Loan Agreement or the Related
Agreements.
(d)
No
consent or approval of, or exemption by, or filing with, any party of
governmental or public body or authority is required in connection with the
execution, delivery and performance under this Loan Agreement or the Related
Agreements or the taking of any action contemplated hereunder or
thereunder.
6.
COVENANTS
OF BRIGHTON.
Brighton covenants and agrees that, so long as the Note shall be outstanding,
except as otherwise required under the Related Agreements, Brighton
shall:
(a)
Promptly pay and discharge all lawful taxes, assessments and governmental
charges or levies imposed upon it or upon its income and profits, or upon any
of
its property, before the same shall become in default as well as all lawful
material claims for labor, materials and supplies which, if unpaid, might become
a lien or charge upon such properties or any part thereof; provided, however,
that it shall not be required to pay and discharge any such tax, assessment,
charge, levy or claim so long as the validity thereof shall be contested in
good
faith by appropriate proceedings, and Brighton shall set aside on its books
adequate reserves with respect to any such tax, assessment, charge, levy or
claim so contested.
(b)
Pay,
or cause to be paid, all material debts and perform, or cause to be performed,
all material obligations promptly and in accordance with the respective terms
thereof.
(c)
Implement and maintain a standard system of accounting in accordance with
generally accepted accounting principles ("GAAP").
(d)
Do,
or cause to be done, all things that may be necessary to:
|
i.
|
maintain
its due organization, valid existence and good standing under the
laws of
its state of formation;
|
|
ii.
|
preserve
and keep in full force and effect all qualifications, registrations
and
licenses in those jurisdictions in which the failure to do so could
or
would have a material adverse effect;
|
|
iii.
|
maintain
its power or authority to carry on its business as now conducted;
and
|
|
iv.
|
use
its best efforts to keep available the services of its key present
employees and agents and maintain its current relations with suppliers,
customers, distributors and joint venture partners (subject to the
business judgment of executive management).
|
(f)
At
all times maintain, preserve, protect and keep material property used and useful
in the conduct of its business in good repair, working order and condition
(subject to normal wear and tear), and from time to time make all needful and
proper repairs, renewals, replacements, betterment and improvements thereto,
so
that the business carried on in connection therewith may be properly conducted
at all times.
(g)
Keep
adequately insured all property of a character usually insured by similar
corporations and carry such other insurance as is usually carried by similar
corporations.
(h)
At
all reasonable times upon ZAGG's request and upon advance notice to Brighton
and
for good reason, permit representatives designated by ZAGG to have access to
the
books and records relating to the operations and procedures of Brighton (subject
to execution of confidentiality undertakings).
(i)
Not
assume, guaranty or otherwise, directly or indirectly, become liable or
responsible for the obligations of any other person or entity, except for 75%
or
greater owned subsidiaries, for the purpose of paying or discharging the
obligations of such person or entity unless such guarantees relate to the
business of Brighton, are incurred in the ordinary course of its business and
do
not exceed in the aggregate $100,000.
(j)
Not
consolidate with or merge with or into any entity or sell, lease, transfer,
exchange or otherwise dispose of any material part of its properties and assets
except in the ordinary course of business, however, Brighton may engage in
any
of the foregoing transactions with a parent or subsidiary of Brighton so long
as
such parent or subsidiary is no less creditworthy than Brighton and such parent
or subsidiary assumes the obligations of Brighton hereunder.
(k)
To
use the Loan for general corporate purposes subject to approval by ZAGG, which
approval shall not be unreasonably withheld.
7.
ASSIGNMENT.
This
Loan Agreement and the Related Agreements may be assigned by ZAGG to transferees
or assignees of the Note, provided that Brighton consents to the assignment,
which consent will not be unreasonably withheld, and that Brighton is, prior
to
or simultaneously with such transfer, furnished with written notice of the
name
and address of such transferee or assignee, and such assignee agrees in writing
to be bound by the terms hereof and provided further that, if the Note is only
assigned or transferred in part, then such assignment shall only be made in
part
on an appropriate proportionate basis. If there is a conflict between this
provision and any provision of the Related Agreements, this provision shall
govern.
As
a
condition to any such assignment, the assignee shall warrant, represent and
acknowledge to Brighton and to ZAGG that: (i) such assignee has adequate means
of providing for its current needs and possible contingencies; (ii) such
assignee has had an opportunity to ask questions of and receive answers from
Brighton concerning its investment as evidenced by the Loan to Brighton, and
all
such questions have been answered to its full satisfaction; and (iii) such
assignee has received no representations and warranties from Brighton other
than
those otherwise set forth herein;
8.
NOTICES.
Notices
and other communications provided for herein shall be in writing (which shall
include notice by facsimile transmission) and shall be delivered or mailed
(or
if by graphic scanning or other facsimile communications equipment of the
sending party hereto, delivered by such equipment), addressed as follows:
If
to
Brighton: 0000 Xxxx Xxxxxx Xxxx. Xxxx Xxxx Xxxx, Xxxx 00000
If
to
ZAGG:
3855 So.
000 Xxxx Xxxxx X Xxxx Xxxx Xxxx, Xxxx 00000
or
to
such other address as a party may from time to time designate in writing in
accordance with this section. All notices and other communications given to
any
party hereto in accordance with the provisions of this Loan Agreement shall
be
deemed to have been given, when delivered if delivered by hand, when
transmission confirmation is received if telecopied, three (3) week days after
mailing if mailed, and two (2) business days after deposit with an overnight
courier service if delivered by overnight courier. Notwithstanding the
foregoing, if a notice or other communication is actually received after 5:00
p.m. at the recipient's designated address, such notice or other communication
shall be deemed to have been given the later of (i) the next business day
or (ii) the business day on which such notice or other communication is
deemed to have been given pursuant to the immediately preceding sentence.
9.
SEVERABILITY.
If a
court of competent jurisdiction determines that any provision of this Loan
Agreement is invalid, unenforceable or illegal for any reason, such
determination shall not affect or impair the validity, legality and
enforceability of the other provisions of this Loan Agreement. If any such
invalidity, unenforceability or illegality of a provision of this Loan Agreement
becomes known or apparent to any of the parties hereto, the parties shall
negotiate promptly and in good faith in an attempt to make appropriate changes
and adjustments to such provision specifically and this Loan Agreement generally
to achieve as closely as possible, consistent with applicable law, the intent
and spirit of such provision specifically and this Loan Agreement
generally.
10.
EXECUTION
IN COUNTERPARTS.
This
Loan Agreement may be executed in counterparts, each of which shall be deemed
an
original, but all of which together shall constitute the same Loan
Agreement.
11.
COSTS.
Brighton shall pay all fees and disbursements (including reasonable attorneys’
fees) of ZAGG with respect to the enforcement of this Agreement and the Related
Agreements.
12.
GOVERNING
LAW.
THIS
LOAN AGREEMENT AND THE VALIDITY AND ENFORCEABILITY HEREOF SHALL BE GOVERNED
BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH
WITHOUT GIVING EFFECT TO CONFLICT OF LAWS RULES OR CHOICE OF LAWS RULES THEREOF.
EACH PARTY AGREES THAT ALL LEGAL PROCEEDINGS CONCERNING THE INTERPRETATIONS,
ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
(WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS,
OFFICERS, SHAREHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED IN THE STATE
AND
FEDERAL COURTS SITTING IN THE CITY OF SALT LAKE CITY UTAH (THE "UTAH COURTS").
EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION
OF
THE NEW YORK COURTS FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY TERM THE LOAN
AGREEMENT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, OR SUCH NEW YORK COURTS ARE IMPROPER OR
INCONVENIENT VENUE FOR SUCH PROCEEDING.
[The
balance of this page intentionally left blank.]
IN
WITNESS WHEREOF, the parties have executed this Bridge Loan Agreement as of
the
date first written above.
|
By:
|
|
||
|
Name:
Cord Xxxxxx
|
|||
|
Title:
Managing Member
|
|||
|
|
|||
|
ZAGG,
INC.
|
|||
|
By:
|
|
||
|
Name:
Xxxxxx X. Xxxxxxxx XX
|
|||
|
Title:
President & CEO
|
|||
Exhibit
A
Exhibit
B
Exhibit
C
Exhibit
D
