LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is made as of the 22nd day of
October 1998 by and among SENESCO, LLC, a New Jersey limited liability company
(the "Company"), Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇, the managing member of the Company
(the "Guarantor"), and South Edge International Limited (the "Lender").
The parties hereby agree as follows:
SECTION 1. AMOUNT AND TERMS OF THE LOAN
1.1 THE LOAN. Subject to the terms of this Agreement, the Company shall
borrow from the Lender and the Lender shall lend to the Company up to five
hundred thousand dollars ($500,000) (the "Loan") pursuant to a promissory note
in the form attached hereto as Exhibit A (the "Note").
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1.2 DRAW DOWN SCHEDULE. The Company agrees to receive $75,000 of the Loan
and the Lender agrees to pay the Company $75,000 of the Loan upon the execution
of the Note. The Company agrees to receive the remainder of the Loan and the
Lender agrees to pay the Company upon and pursuant to the schedule attached
hereto as Exhibit B (the "Drawdown Schedule").
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1.3 INTEREST. The Loan shall bear interest on the unpaid principal balance
thereof from the date of disbursement until the Loan is repaid in full at a per
annum rate equal to two percent (2%) above the Prime Rate as reported in the
Wall Street Journal on the date of execution of the Note. Interest shall be
payable at such time as the principal is due hereunder.
1.4. METHOD OF PAYMENT TO LENDER. All payments of principal and interest on
the Note shall be paid directly to the Lender at its office at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, 37 ▇▇▇▇ Street, P.O. Box HM 279, ▇▇▇▇▇▇▇▇, ▇▇ AX Bermuda, Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or to such other place as the Lender shall designate.
SECTION 2. THE CLOSING
2.1 CLOSING DATE. The closing of the purchase and sale of the Note (the
"Closing") shall be held on October 22, 1998 or at such other time as the
Company and the Lender shall agree (the "Closing Date").
2.2 DELIVERY. At the Closing (i) the Lender will deliver to the Company a
check or wire transfer funds in the amount of $75,000, and (ii) the Company
shall deliver to the Lender, a Note representing the Loan. The Lender shall pay
the Company the remainder of the Loan pursuant to Section 1.2.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Lender as follows:
3.1 CORPORATE POWER. The Company will have at the Closing Date all
requisite corporate power to execute and deliver this Agreement and to carry out
and perform its obligations under the terms of this Agreement.
3.2 AUTHORIZATION. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of this
Agreement by the Company and the performance of the Company's obligations
hereunder, including the issuance and delivery of the Note, has been taken or
will be taken prior to the Closing. This Agreement and the Note, when executed
and delivered by the Company, shall constitute valid and binding obligations of
the Company enforceable in accordance with their terms, subject to laws of
general application relating to bankruptcy, insolvency, the relief of debtors
and, with respect to rights to indemnity, subject to federal and state
securities laws.
3.3 GOVERNMENTAL CONSENTS. All consents, approvals, orders or
authorizations of, or registrations, qualifications, designations, declarations
or filings with, any governmental authority, required on the part of the Company
in connection with the valid execution and delivery of this Agreement, the
offer, sale or issuance of the Note or the consummation of any other transaction
contemplated hereby shall have been obtained and will be effective at the
Closing.
3.4 OFFERING. Assuming the accuracy of the representations and warranties
of the Lender contained in Section 4 hereof, the offer, issue and sale of the
Note is and will be exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and has
been registered or qualified (or are exempt from resignation and qualification)
under the registration, permit or qualification requirements of all applicable
state securities laws.
SECTION 4. REPRESENTATION AND WARRANTIES OF THE LENDER
4.1 PURCHASE FOR OWN ACCOUNT. The Lender represents that it is acquiring
the Note solely for its own account and beneficial interest for investment and
not for sale or with a view to distribution of the Note or any part thereof, has
no present intention of selling (in connection with a distribution or
otherwise), granting any participation in, or otherwise distributing the same,
and does not presently have reason to anticipate a change in such intention.
4.2 NO COMMISSIONS. The Lender represents that it has no knowledge that any
commission or other remuneration is due or payable, directly or indirectly, to
any party arising from the transaction contemplated hereby.
4.3. ACCREDITED INVESTOR. The Lender is an "accredited investor" as such
term is defined in Rule 501 under the Securities Act.
SECTION 5. MISCELLANEOUS
5.1 GUARANTY. In the event the merger between the Company and ▇▇▇▇ Leisure
Acquisition, Inc., a wholly-owned subsidiary of ▇▇▇▇ Leisure USA, Inc., an Idaho
corporation, to create Senesco Technologies, Inc., a Delaware corporation, is
not consummated, the performance of all obligations of the Company hereunder and
the payment of all amounts payable by the Company hereunder shall be guaranteed
by the Guarantor.
5.2 PROHIBITION ON TRANSFER OR ASSIGNMENT. The Lender agrees that it shall
not sell, transfer, assign, or otherwise convey the Note without the prior
written approval of the Company, which approval shall not be unreasonably
withheld.
5.3 BINDING AGREEMENT. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any third party any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
5.4 GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of New Jersey as applied to agreements among New Jersey
residents, made and to be performed entirely within the State of New Jersey.
5.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.6 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
5.7 NOTICES. Any notice required or permitted under this Agreement shall be
given in writing and shall be deemed effectively given upon personal delivery or
upon deposit with the United States Post Office, by registered or certified
mail, postage prepaid, addressed to the Company at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or to the Lender at ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, 37
▇▇▇▇ Street, P.O. Box HM 279, ▇▇▇▇▇▇▇▇, ▇▇ AX Bermuda, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
or at such other address as such party may designate by ten (10) days advance
written notice to the other party.
5.8 MODIFICATION; WAIVER. No modification or waiver of any provision of
this Agreement or consent or departure therefrom shall be effective unless in
writing and approved by the Company and the Lender.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
COMPANY: LENDER:
SENESCO, LLC SOUTH EDGE INTERNATIONAL LIMITED
By:/s/ Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ W. A. Manual, Jr.
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Name: Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇ Name: W. A. Manual, Jr.
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Title: Managing Member Title: Director
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GUARANTOR:
/s/ Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇
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Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇
EXHIBIT A
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THIS NOTE HAS BEEN ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH SUCH REQUIREMENTS OR A WRITTEN OPINION OF
COUNSEL ACCEPTABLE TO THE OBLIGOR THAT SUCH TRANSFER WILL NOT RESULT IN ANY
VIOLATION OF SUCH LAWS OR AFFECT THE LEGALITY OF ITS ISSUANCE.
PROMISSORY NOTE
$500,000 October 22, 1998
FOR VALUE RECEIVED, the undersigned, Senesco, LLC, a limited liability
company organized and existing under the laws of the State of New Jersey (the
"Obligor"), hereby promises to pay to the order of South Edge International
Limited (the "Holder"), the principal sum of Five Hundred Thousand Dollars
($500,000) payable as set forth below. The Obligor also promises to pay to the
order of the Holder interest on the principal amount hereof at a rate per annum
equal to two percent (2%) above the Prime Rate as reported in the Wall Street
Journal on the date of this Note, which interest shall be payable at such time
as the principal is due hereunder. Interest shall be calculated on the basis of
a year of 365 days and for the number of days actually elapsed. Any amounts of
interest and principal not paid when due shall bear interest at the maximum rate
of interest allowed by applicable law. The payments of principal and interest
hereunder shall be made in coin or currency of the United States of America
which at the time of payment shall be legal tender therein for the payment of
public and private debts.
This Note shall be subject to the following additional terms and
conditions:
1. Payments. Subject to Section 2 hereof, all principal and interest
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due hereunder shall be payable in one (1) installment on October 22,
1999 (the "Maturity Date"); provided, however, that the parties may
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mutually agree to extend the term of this Note beyond the Maturity
Date. In the event that any payment to be made hereunder shall be or
become due on a Saturday, Sunday or any other day which is a legal
bank holiday under the laws of the State of New Jersey, such payment
shall be or become due on the next succeeding business day.
2. Prepayments.
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a) The Obligor and the Holder understand and agree that the
principal amount of this Note is intended as a loan to the
Obligor in anticipation of a merger (the "Merger") between the
Obligor and ▇▇▇▇ Leisure Acquisition, Inc., a wholly-owned
subsidiary of ▇▇▇▇ Leisure USA, Inc., an Idaho corporation, to
create Senesco Technologies, Inc., a Delaware corporation
("STI"). Subsequent to the consummation of the Merger, in the
event STI consummates an equity financing through the issuance
of preferred stock
or other equity securities or securities convertible into
equity that results in proceeds to STI in excess of $1,500,000
(an "Equity Financing"), the entire unpaid principal amount of
this Note (together with accrued interest hereon) shall become
due and immediately payable to the Holder upon consummation of
such Equity Financing.
b) In the event the Merger is not consummated within four (4)
months from the date hereof, the entire unpaid principal
amount of this Note (together with accrued interest hereon)
shall, at the option of the Holder, exercised by written
notice to the Obligor as provided herein, become immediately
due and payable; provided, however, that the parties may
mutually agree to renegotiate the terms of this Note at such
time.
3. No Waiver. No failure or delay by the Holder in exercising any
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right, power or privilege under this Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies
provided by law. No course of dealing between the Obligor and the
Holder shall operate as a waiver of any rights by the Holder.
4. Waiver of Presentment and Notice of Dishonor. The Obligor and all
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endorsers, guarantors and other parties that may be liable under
this Note hereby waive presentment, notice of dishonor, protest and
all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
5. Place of Payment. All payments of principal of this Note and the
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interest due thereon shall be made at such place as the Holder may
from time to time designate in writing.
6. Events of Default. The entire unpaid principal amount of this Note
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and the interest due hereon shall, at the option of the Holder
exercised by written notice to the Obligor, forthwith become and be
due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, if any
one or more of the following events (herein called "Events of
Default") shall have occurred (for any reason whatsoever and whether
such happening shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) and be
continuing at the time of such notice, that is to say:
a) if default shall be made in the due and punctual payment of
the principal of this Note and the interest due thereon when
and as the same shall become due and payable, whether at
maturity, or by acceleration or otherwise, and such default
shall have continued for a period of five days;
b) if the Obligor shall:
(i) admit in writing its inability to pay its debts
generally as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors;
(iv) consent to the appointment of a receiver of the whole or
any substantial part of his property;
(v) on a petition in bankruptcy filed against him, be
adjudicated a bankrupt;
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States of
America or any State, district or territory thereof; or
c) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the
Obligor, a receiver of the whole or any substantial part of
Obligor's property, and such order, judgment or decree shall
not be vacated or set aside or stayed within 90 days from the
date of entry thereof; and
d) if, under the provisions of any other law for the relief or
aid of debtors, any court of competent jurisdiction shall
assume custody or control of the whole or any substantial part
of Obligor's property and such custody or control shall not be
terminated or stayed within 90 days from the date of
assumption of such custody or control.
7. Remedies. In case any one or more of the Events of Default specified
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in Section 6 hereof shall have occurred and be continuing, the
Holder may proceed to protect and enforce its rights either by suit
in equity and/or by action at law, whether for the specific
performance of any covenant or agreement contained in this Note or
in aid of the exercise of any power granted in this Note, or the
Holder may proceed to enforce the payment of all sums due upon this
Note or to enforce any other legal or equitable right of the Holder.
8. Severability. In the event that one or more of the provisions of
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this Note shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Note,
but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
9. Governing Law. This Note and the rights and obligations of the
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Obligor and the Holder shall be governed by and construed in
accordance with the laws of the State of New Jersey.
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IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
and delivered on the date first written above.
SENESCO, LLC
By:/s/ Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇
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Phillippe ▇. ▇▇▇▇▇▇▇▇▇▇
Managing Member
EXHIBIT B
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See Drawdown schedule attached hereto.
