THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO PACIFIC CMA, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
SECURED REVOLVING NOTE
FOR VALUE RECEIVED, each of PACIFIC CMA, INC., a Delaware
corporation (the "Parent"), and the other companies listed on Exhibit A attached
hereto (such other companies together with the Parent, each a "Company" and
collectively, the "Companies"), jointly and severally, promises to pay to LAURUS
MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Xxxxxx
House, South Church Street, Xxxxxx Town, Grand Cayman, Cayman Islands, Fax:
000-000-0000 (the "Holder") or its registered assigns or successors in interest,
the sum of Seven Million Five Hundred Thousand Dollars ($7,500,000), without
duplication of any amounts owing by the Companies to the Holder under the
Minimum Borrowing Notes (as defined in the Security Agreement referred to
below), or, if different, the aggregate principal amount of all Loans (as
defined in the Security Agreement referred to below), without duplication of any
amounts owing by the Companies to the Holder under the Minimum Borrowing Notes,
together with any accrued and unpaid interest hereon, on July 29, 2008 (the
"Maturity Date") if not sooner indefeasibly paid in full.
Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Security Agreement among the Companies
and the Holder dated as of the date hereof (as amended, modified and/or
supplemented from time to time, the "Security Agreement").
The following terms shall apply to this Secured Revolving Note (this
"Note"):
ARTICLE I
CONTRACT RATE AND MINIMUM BORROWING NOTE
1.1 Contract Rate. Subject to Sections 3.2 and 4.10, interest
payable on the outstanding principal amount of this Note (the "Principal
Amount") shall accrue at a rate per annum equal to the "prime rate" published in
The Wall Street Journal from time to time (the "Prime Rate"), plus one percent
(1.0%) (the "Contract Rate"). The Contract Rate shall be increased or decreased
as the case may be for each increase or decrease in the Prime Rate in an amount
equal to such increase or decrease in the Prime Rate; each change to be
effective as of the day of the change in the Prime Rate. Subject to Section 1.2,
the Contract Rate shall not at any time be less than six percent (6.0%) per
annum. Interest shall be (i) calculated on the basis of a 360 day year, and (ii)
payable monthly, in arrears, commencing on August 1, 2005 on the first business
day of each consecutive calendar month thereafter through and including the
Maturity Date, and on the Maturity Date, whether by acceleration or otherwise.
1.2 Contract Rate Adjustments and Payments. The Contract Rate shall
be calculated on the last business day of each calendar month hereafter (other
than for increases or decreases in the Prime Rate which shall be calculated and
become effective in accordance with the terms of Section 1.1) until the Maturity
Date (each a "Determination Date") and shall be subject to adjustment as set
forth herein. If (i) the Parent shall have registered the shares of the Common
Stock underlying the conversion of each Minimum Borrowing Note and each Warrant
on a registration statement declared effective by the Securities and Exchange
Commission (the "SEC"), and (ii) the market price (the "Market Price") of the
Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five
(5) trading days immediately preceding a Determination Date exceeds the then
applicable Fixed Conversion Price by at least twenty-five percent (25%), the
Contract Rate for the succeeding calendar month shall automatically be reduced
by 200 basis points (200 b.p.) (2%) for each incremental twenty-five percent
(25%) increase in the Market Price of the Common Stock above the then applicable
Fixed Conversion Price. Notwithstanding the foregoing (and anything to the
contrary contained herein), in no event shall the Contract Rate at any time be
less than zero percent (0%).
1.3 Allocation of Principal to Minimum Borrowing Note.
Notwithstanding anything herein to the contrary, whenever during the Term the
outstanding balance on the Minimum Borrowing Note shall be less than the Minimum
Borrowing Amount (such amount being referred to herein as the "Transferable
Amount") to the extent that the outstanding balance on the Revolving Note should
equal or exceed $500,000, that portion of the balance of the Revolving Note that
exceeds $500,000, but does not exceed the Transferable Amount, shall be
segregated from the outstanding balance under the Revolving Note and allocated
to and aggregated with the then existing balance of the next unissued serialized
Minimum Borrowing Note (the "Next Unissued Serialized Note"); provided that such
segregated balance shall remain subject to the terms and conditions of such
Revolving Note until a new serialized Minimum Borrowing Note is issued as set
forth below. The Next Unissued Serialized Note shall remain in book entry form
until the balance thereunder shall equal the Minimum Borrowing Amount, at which
time a new serialized Minimum Borrowing Note in the face amount equal to the
Minimum Borrowing Amount will be issued and registered as set forth in the
Registration Rights Agreement (and the outstanding balance under the Revolving
Note shall at such time be correspondingly reduced in the amount equal to the
Minimum Borrowing Amount as a result of the issuance of such new serialized
Minimum Borrowing Note).
1.4 Prepayment. The Companies shall have the right to prepay in
cash, at any time and from time to time, the entire outstanding principal amount
of this Note and all accrued interest thereon without any premium or penalty.
ARTICLE II
2.1 Optional Conversion. Subject to the terms of this Article II,
the Holder shall have the right, but not the obligation, at any time until the
Maturity Date, or during an Event of Default (as defined in Article III), and,
2
subject to the limitations set forth in Section 2.2 hereof, to convert all or
any portion of the outstanding Principal Amount and/or accrued interest due and
payable into fully paid and nonassessable restricted shares of the Common Stock
at the Fixed Conversion Price (defined below). For purposes hereof, subject to
Section 3.6 hereof, the initial "Fixed Conversion Price" means (i) with respect
to the first $3,750,000 of the aggregate principal amount converted pursuant to
the terms of this Note or any Minimum Borrowing Note (and all interest related
thereto), $.88 and (ii) with respect to the remaining principal amount converted
pursuant to the terms of this Note or any Minimum Borrowing Note (and all
interest related thereto), $1.05. The shares of Common Stock to be issued upon
such conversion are herein referred to as the "Conversion Shares."
2.2 Conversion Limitation.
Notwithstanding anything contained herein to the contrary, the Holder
shall not be entitled to convert pursuant to the terms of this Note an amount
that would be convertible into that number of Conversion Shares which would
exceed the difference between (i) 4.99% of the issued and outstanding shares of
Common Stock and (ii) the number of shares of Common Stock beneficially owned by
the Holder and issuable to the Holder upon exercise of the Warrants. For
purposes of the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and Regulation
13d-3 thereunder. The Conversion Shares limitation described in this Section 2.2
shall automatically become null and void following written notice to any Company
upon the occurrence and during the continuance of an Event of Default, or upon
75 days prior notice to the Parent, except that at no time shall the number of
shares of Common Stock beneficially owned by the Holder exceed 19.99% of the
outstanding shares of Common Stock, or such lesser amount as required by the
applicable Principal Market on which the Parent's Common Stock is listed, unless
such shall first be approved by the Parent's stockholders. Notwithstanding
anything contained herein to the contrary, the number of shares of Common Stock
issuable by the Parent and acquirable by the Holder at a price below $.81 per
share pursuant to the terms of this Note, the Security Agreement or any other
Ancillary Agreement, shall not exceed an aggregate of 5,095,933 shares of Common
Stock (subject to appropriate adjustment for stock splits, stock dividends, or
other similar recapitalizations affecting the Common Stock) (the "Maximum Common
Stock Issuance"), unless the issuance of Common Stock hereunder in excess of the
Maximum Common Stock Issuance shall first be approved by the Parent's
shareholders. If at any point in time and from time to time the number of shares
of Common Stock issued pursuant to the terms of this Note, the Security
Agreement or any other Ancillary Agreement, together with the number of shares
of Common Stock that would then be issuable by the Parent to the Holder in the
event of a conversion or exercise pursuant to the terms of this Note, the
Security Agreement or any other Ancillary Agreement, would exceed the Maximum
Common Stock Issuance but for this Section 2.2, the Parent shall promptly call a
shareholders meeting to solicit shareholder approval for the issuance of the
shares of Common Stock hereunder in excess of the Maximum Common Stock Issuance.
Notwithstanding anything contained herein to the contrary, the provisions of
this Section 2.2 are irrevocable and may not be waived by the Holder or any
Company.
2.3 Mechanics of Xxxxxx's Conversion. In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion in
3
substantially the form of Exhibit B hereto (appropriately completed) ("Notice of
Conversion") to the Parent and such Notice of Conversion shall provide a
breakdown in reasonable detail of the Principal Amount, accrued interest and
fees that are being converted. On each Conversion Date (as hereinafter defined)
and in accordance with its Notice of Conversion, the Holder shall make the
appropriate reduction to the Principal Amount, accrued interest and fees as
entered in its records and shall provide written notice thereof to the Parent
within two (2) Business Days after the Conversion Date. Each date on which a
Notice of Conversion is delivered or telecopied to the Parent in accordance with
the provisions hereof shall be deemed a Conversion Date (the "Conversion Date").
Pursuant to the terms of the Notice of Conversion, the Parent will issue
instructions to the transfer agent accompanied by an opinion of counsel within
one (1) Business Day of the date of the delivery to the Parent of the Notice of
Conversion and shall cause the transfer agent to transmit the certificates
representing the Conversion Shares to the Holder by crediting the account of the
Holder's designated broker with the Depository Trust Corporation ("DTC") through
its Deposit Withdrawal Agent Commission ("DWAC") system within three (3)
Business Days after receipt by the Parent of the Notice of Conversion (the
"Delivery Date"). In the case of the exercise of the conversion rights set forth
herein the conversion privilege shall be deemed to have been exercised and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Parent of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of the Conversion
Shares, unless the Holder provides the Parent written instructions to the
contrary.
2.4 Late Payments. Each Company understands that a delay in the
delivery of the Conversion Shares in the form required pursuant to this Article
beyond the Delivery Date could result in economic loss to the Holder. As
compensation to the Holder for such loss, in addition to all other rights and
remedies which the Holder may have under this Note, applicable law or otherwise,
the Companies shall, jointly and severally, pay late payments to the Holder for
any late issuance of Conversion Shares in the form required pursuant to this
Article II upon conversion of this Note, in the amount equal to $200 per
Business Day after the Delivery Date. The Companies shall, jointly and
severally, make any payments incurred under this Section in immediately
available funds upon demand.
2.5 Conversion Mechanics. The number of shares of Common Stock to be
issued upon each conversion of this Note shall be determined by dividing that
portion of the principal and interest and fees to be converted, if any, by the
then applicable Fixed Conversion Price.
2.6 Adjustment Provisions. The Fixed Conversion Price and number and
kind of shares or other securities to be issued upon conversion determined
pursuant to Section 2.1 shall be subject to adjustment from time to time upon
the occurrence of certain events during the period that this conversion right
remains outstanding, as follows:
(a) Reclassification. If the Parent at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
4
of securities as would have been issuable as the result of such change with
respect to the Common Stock (i) immediately prior to or (ii) immediately after,
such reclassification or other change at the sole election of the Holder.
(b) Stock Splits, Combinations and Dividends. If the shares of
Common Stock are subdivided or combined into a greater or smaller number of
shares of Common Stock, or if a dividend is paid on the Common Stock or any
preferred stock issued by the Parent in shares of Common Stock, the Fixed
Conversion Price shall be proportionately reduced in case of subdivision of
shares or stock dividend or proportionately increased in the case of combination
of shares, in each such case by the ratio which the total number of shares of
Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.
Share Issuances. Subject to the provisions of this Section
2.6, if the Parent shall at any time prior to the conversion or repayment in
full of the Principal Amount issue any shares of Common Stock or securities
convertible into Common Stock to a Person other than the Holder (except (i)
pursuant to Sections 2.6(a) or (b) above; (ii) pursuant to options, warrants, or
other obligations to issue shares outstanding on the date hereof as disclosed to
the Holder in writing (either in a Schedule to the Security Agreement or in ay
of the Parent's SEC Reports or Exchange Act Filings); or (iii) pursuant to
options that may be issued under any employee incentive stock option and/or any
qualified stock option plan adopted by the Parent) for a consideration per share
(the "Offer Price") less than the Fixed Conversion Price in effect at the time
of such issuance, then the Fixed Conversion Price shall be immediately reset
pursuant to the formula below. For purposes hereof, the issuance of any security
of the Parent convertible into or exercisable or exchangeable for Common Stock
shall result in an adjustment to the Fixed Conversion Price upon the issuance of
such securities pursuant to the formula below.
If the Parent issues any additional shares of Common Stock for
a consideration per share less than the then-applicable Fixed Conversion Price
pursuant to this Section 2.6 then, and thereafter successively upon each such
issue, the Fixed Conversion Price shall be adjusted by multiplying the then
applicable Fixed Conversion Price by the following fraction:
--------------------------
A + B
--------------------------
(A + B) + [((C - D) x B)
/ C]
--------------------------
A = Total amount of shares convertible pursuant to the
Notes
B = Actual shares sold in the offering
C = Fixed Conversion Price
(c) D = Offer Price.
(d) Computation of Consideration. For purposes of any computation
respecting consideration received pursuant to Section 2.6(c) above, the
following shall apply:
5
(i) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided that in no
case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Parent for any underwriting of the issue or
otherwise in connection therewith;
(ii) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Parent
(irrespective of the accounting treatment thereof); and
(iii) upon any such exercise, the aggregate consideration received
for such securities shall be deemed to be the consideration received by
the Parent for the issuance of such securities plus the additional minimum
consideration, if any, to be received by the Parent upon the conversion or
exchange thereof (the consideration in each case to be determined in the
same manner as provided in subsections (i) and (ii) of this Section
2.6(d)).
2.7 Reservation of Shares. During the period the conversion right
exists, the Parent will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Conversion Shares
upon the full conversion of this Note and the Warrant. The Parent represents
that upon issuance, the Conversion Shares will be duly and validly issued, fully
paid and non-assessable. The Parent agrees that its issuance of this Note shall
constitute full authority to its officers, agents, and transfer agents who are
charged with the duty of executing and issuing stock certificates to execute and
issue the necessary certificates for the Conversion Shares upon the conversion
of this Note.
ARTICLE III
EVENTS OF DEFAULT AND DEFAULT RELATED PROVISIONS
3.1 Events of Default. The occurrence of an Event of Default under
the Security Agreement shall constitute an event of default ("Event of Default")
hereunder.
3.2 Default Interest. Following the occurrence and during the
continuance of an Event of Default, the Companies shall, jointly and severally,
pay additional interest on the outstanding principal balance of this Note in an
amount equal to one percent (1%) per month, and all outstanding Obligations,
including unpaid interest, shall continue to accrue interest at such additional
interest rate from the date of such Event of Default until the date such Event
of Default is cured or waived.
3.3 Default Payment. Following the occurrence and during the
continuance of an Event of Default, the Holder, at its option, may elect., in
addition to all rights and remedies of the Holder under the Security Agreement
and the Ancillary Agreements and all obligations of each Company under the
Security Agreement and the Ancillary Agreements, to terminate the Security
Agreement pursuant to Section 17 thereof and require the Companies, jointly and
severally, to make a Default Payment ("Default Payment"). The Default Payment
shall be one hundred twenty percent (120%) of the outstanding principal amount
of the Note, plus accrued but unpaid interest, all other fees then remaining
6
unpaid, and all other amounts payable hereunder. The Default Payment shall be
applied first to any fees due and payable to the Holder pursuant to the Notes
and/or the Ancillary Agreements, then to accrued and unpaid interest due on the
Notes, the Security Agreement and then to the outstanding principal balance of
the Notes. The Default Payment shall be due and payable immediately on the date
that the Holder has exercised its rights pursuant to this Section 4.3.
ARTICLE IV
MISCELLANEOUS
4.1 Conversion Privileges. The conversion privileges set forth in
Article II shall remain in full force and effect immediately from the date
hereof until the date this Note is indefeasibly paid in full and irrevocably
terminated.
4.2 Cumulative Remedies. The remedies under this Note shall be
cumulative.
4.3 Failure or Indulgence Not Waiver. No failure or delay on the
part of the Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.
4.4 Notices. Any notice herein required or permitted to be given
shall be in writing and shall be deemed effective given (a) upon personal
delivery to the party notified, (b) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient, if not, then on the next
business day, (c) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
respective Company at the address provided for such Company in the Security
Agreement executed in connection herewith, and to the Holder at the address
provided in the Security Agreement for the Holder, with a copy to Xxxx X.
Xxxxxx, Esq., 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, xxxxxxxxx
number (000) 000-0000, or at such other address as the respective Company or the
Holder may designate by ten days advance written notice to the other parties
hereto. A Notice of Conversion shall be deemed given when made to the Parent
pursuant to the Purchase Agreement.
4.5 Amendment Provision. The term "Note" and all references thereto,
as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument as such successor instrument may be
amended or supplemented.
4.6 Assignability. This Note shall be binding upon each Company and
its successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Security Agreement. No Company may not assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void.
7
4.7 Cost of Collection. In case of any Event of Default under this
Note, the Companies shall, jointly and severally, pay the Holder the Holder's
reasonable costs of collection, including reasonable attorneys' fees.
4.8 Governing Law, Jurisdiction and Waiver of Jury Trial.
(a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
(b) EACH COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY
COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS
NOTE, THE SECURITY AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF
THE OTHER ANCILLARY AGREEMENTSPROVIDED, THAT EACH COMPANY ACKNOWLEDGES THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE
COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN
THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT
OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
HOLDER. EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH COMPANY
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH COMPANY HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT
THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL
BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S ACTUAL RECEIPT THEREOF OR
THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID
(c) EACH COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE
APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE
BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH COMPANY HERETO WAIVES
ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER, AND/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL
8
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, THE
SECURITY AGREEMENT, ANY OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED
HERETO OR THERETO.
4.9 Severability. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of this
Note.
4.10 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum rate
permitted by such law, any payments in excess of such maximum rate shall be
credited against amounts owed by the Companies to the Holder and thus refunded
to the Companies.
4.11 Security Interest. The Holder has been granted a security
interest (i) in certain assets of the Companies as more fully described in the
Security Agreement and (ii) pursuant to the Stock Pledge Agreement dated as of
the date hereof.
4.12 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.
[Balance of page intentionally left blank; signature page follows]
9
IN WITNESS WHEREOF, each Company has caused this Secured Revolving
Note to be signed in its name effective as of this 29th day of July 2005.
PACIFIC CMA, INC., a Delaware corporation
By:__________________________________
Name:
Title:
WITNESS:
----------------------------------
PACIFIC CMA INTERNATIONAL, LLC, a
Colorado limited liability company
By:__________________________________
Name:
Title:
WITNESS:
----------------------------------
AIRGATE INTERNATIONAL CORPORATION, a New
York corporation
By:__________________________________
Name:
Title:
WITNESS:
----------------------------------
AIRGATE INTERNATIONAL CORPORATION
(CHICAGO), an Illinois corporation
By:__________________________________
Name:
Title:
10
WITNESS:
----------------------------------
PARADIGM INTERNATIONAL INC., a Florida
corporation
By:__________________________________
Name:
Title:
WITNESS:
----------------------------------
11
EXHIBIT A
OTHER COMPANIES
PACIFIC CMA INTERNATIONAL, LLC, a Colorado limited liability company
AIRGATE INTERNATIONAL CORPORATION, a New York corporation
AIRGATE INTERNATIONAL CORPORATION (CHICAGO), an Illinois corporation
PARADIGM INTERNATIONAL INC., a Florida corporation
EXHIBIT B
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert the Secured Revolving Note)
The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Secured Revolving Note dated as of July
__, 2005 (the "Note") issued by Pacific CMA, Inc. (the "Parent") and the other
Companies named and as defined therein into shares of Common Stock of
the Parent ("Shares) in accordance with the terms and conditions set forth in
the Note, as of the date written below.
Date of Conversion:
Conversion Price:
Shares To Be Delivered:
Signature:
Print Name:
Address:
Holder DWAC instructions
