7
Exhibit 10.31
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is dated as of September 4, 1996,
between Tee One Up, Inc., a Nevada corporation ("Borrower"), with an address of
000 Xxxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and Pacific D.N.S., Inc. a
Nevada corporation ("Lender"), with an address at 0000 Xxxxxxxx Xxxxxx, Xxx
Xxxxx, Xxxxxx 00000, with reference to the following facts and circumstances:
WHEREAS, Borrower has requested and Lender has agreed to lend to Borrower
the sum of up to Three Hundred Thousand Dollars ($300,000) (the "Loan"), and
Borrower is executing and delivering a Promissory Note of even date herewith in
the principal amount of up to Three Hundred Thousand Dollars ($300,000) and in
the form of Exhibit "A" attached hereto and incorporated herein by this
reference (the "Note") evidencing the Loan; and
WHEREAS, in order to induce Lender to make the Loan, Borrower is
simultaneously executing and delivering to Lender an Assignment of Contracts and
Security Agreement of even date herewith in the form of Exhibit "B" attached
hereto and incorporated herein by this reference (the "Security Agreement") to
secure the Note (the Note, the Security Agreement and this Agreement,
collectively with any other documents now or hereafter delivered to evidence or
secure the Loan, are hereinafter referred to as the "Loan Documents").
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Lender hereby agree as follows:
1. Loan.
Upon and subject to the terms and conditions hereof, Lender hereby
lends to Borrower and Borrower agrees to borrow from Lender the sum of up to
Three Hundred Thousand Dollars ($300,000) upon and subject to the terms and
conditions contained herein. Funding(s) of the Loan, if any, shall be made by
delivery to Borrower in Las Vegas, Nevada, of Lender's or a bank check, drawn on
Lender's local Nevada bank, in the amount of the sum(s) thereby advanced.
2. Conditions to the Loan.
Lender shall not be obligated to make the Loan, or any portion thereof,
unless and until Borrower, at its sole cost and expense, has provided each of
the following in form and substance satisfactory to Lender.
(1) duly authorized, executed and delivered originals of (i) Note,
(ii) the Security Agreement, and (iii) any and all other Loan
Documents;
(2) an opinion of Borrower's counsel, such counsel to be acceptable to
Lender, and such opinion to be in form and substance customary in
comparable transactions and otherwise acceptable to Lender, all in
Lender's sole and absolute discretion;
(3) certified copies of all documents relating to the existence, good
standing and qualification of Borrower and the authority for, due
execution and validity of the Loan Documents;
(4) true, correct and complete copies of each of the agreements, both
now and hereafter existing, which will be assigned pursuant to
Section 1(i) of the Security Agreement (the "Contracts");
(5) consents, approvals and/or waivers ("Consents"), in
form and substance acceptable to Lender, in its
sole and absolute discretion, by any third parties
from whom such Consents are required, as determined
by Lender, in its sole and absolute discretion, as
a precondition to any element of the transactions
contemplated hereby, including, without limitation,
the assignment and/or pledge of any Contract or
Collateral (as defined in the Security Agreement);
(6) duly executed appropriate UCC-1 forms for filing
with respect to the Security Agreement;
(7) UCC, judgment, tax, lien and bankruptcy searches
with respect to Borrower;
(8) true, complete and correct copies of the most
recent financial statements of Borrower;
(9) payment at initial funding, by holdback from Loan proceeds, of
Lender's counsel's fees (not to exceed $10,000);
1
(10) an executed agreement, in form and substance acceptable to Lender
and Borrower, pursuant to which Borrower will grant to Lender a
right of first refusal to purchase all or any portion, in Lender's
sole and absolute discretion, of any offering of debt, equity,
convertible or other securities offered by Borrower, subject to
the approval of Windsor Financial Group, as Borrower's investment
banker, which approval shall not be unreasonably withheld; and
(11) such other documents or information deemed necessary or desirable
by Lender to better evidence, secure, evaluate or assure the Loan,
including, without limitation, such documentation as Lender may
require evidencing the irrevocable instruction of Borrower to
California Factors & Finance ("CFF") authorizing and instructing
CFF to pay directly to Lender on a monthly basis from funds
otherwise payable to Borrower not less than the amount of the
monthly payments due under the Note.
Until such time as Borrower is able to provide all of the foregoing items,
Lender may, in Lender's sole and absolute discretion, elect not to fund the Loan
or to fund less than the full amount thereof; provided, however, that the
funding of the all or any portion of the Loan prior to receipt of all of the
foregoing items shall not be deemed a waiver of any of the foregoing nor shall
it indicate that all of the foregoing have been satisfied; and provided,
further, that in the event that all of the foregoing, in form and substance as
provided herein, are not delivered to Lender within ten (10) business days of
the date hereof, then Borrower, not later than the 5:00 p.m., Las Vegas, Nevada,
local time, on the next business day following such tenth (10th) business day,
shall immediately repay to Lender any and all amounts advanced hereunder,
together with interest thereon as provided in the Note, the failure timely to so
repay to constitute a material and irremediable breach under the Note and the
other Loan Documents, entitling Lender to exercise all rights available
thereunder or otherwise at law or in equity.
3. Use of Proceeds.
Borrower shall apply the proceeds of the Loan solely for use in
Borrower's business including for costs, expenses and fees in connection with
the Loan.
4. Loan Fee.
As material inducements to Lender to make, and in the absence of which
Lender would not make, the Loan, upon the initial funding of the Loan, unless
and to the extent waived by Lender, Borrower (a) shall pay to Lender a loan fee
in connection with the Loan consisting of three percent (3%) of the authorized
and outstanding capital stock of Borrower as of the date of this Agreement,
subject to customary (i) piggy-back registration rights (subject to commercially
reasonable underwriter approval), and (ii) anti-dilution protections in the
event of any merger, reorganization, recapitalization, reclassification, stock
dividend, and/or similar occurrences (but not the issuance by Borrower of shares
of its capital stock for fair consideration), and (b) hereby grants to Lender a
royalty-free, exclusive, perpetual worldwide license to all broadcast and video
rights from any "Tee One Up" golf course footage captured during the period the
Loan (or any portion thereof) remains outstanding, excepting therefrom (i)
footage from the Marriott locations, the broadcast and video rights to which
shall be shared between Lender and Marriott, and (ii) footage aired on The Golf
Channel, the revenues from which, net of any amounts paid to The Gold Channel,
shall be shared between Lender and Borrower, each and every element of all of
the foregoing provisions of this Section 4 to be agreed upon and memorialized in
appropriate written agreements by and among Borrower, Lender and/or any
necessary third parties prior to full or partial funding of the Loan, as the
case may be, unless and to the extent waived by Lender.
5. Representations.
In addition to any representations and warranties found elsewhere in
the Loan Documents, Borrower hereby represents and warrants to Lender that:
(a) Borrower is duly organized validly existing and in good standing
under the laws of the State of Nevada and has full power and
authority to execute all documents and instruments required to be
executed by it in connection with the Loan;
(b) The execution, delivery and performance by Borrower of the Loan
Documents and all other documents executed by it in connection
therewith do not contravene any law, rule, regulation, order or
judgment applicable to it or any agreement or contractual
restriction binding on or affecting it or any of its properties;
(c) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by
Borrower of the Loan Documents and all other documents executed by
it in connection therewith, except such as have been obtained;
2
(d) The Loan Documents and all other documents executed
in connection therewith are the legal, valid and
binding obligations of Borrower;
(e) There are no actions, suits or proceedings pending,
or to the knowledge of Borrower threatened, against
or affecting Borrower or the Collateral which could
have a material adverse effect on Borrower or the
Collateral or involving the validity or enforce-
ability of the Loan Documents or the priority of
the liens created or perfected thereby, at law or
in equity, or before or by any governmental
authority, and Borrower is not in default with
respect to any order, writ, judgement, decree or
demand of any court or any governmental authority;
(f) There is no contact or arrangement of any kind the
performance of which by another party thereto would
give rise to a lien on the Collateral or any part
thereof or any interest therein or requiring
Borrower to convey the Collateral or any part
thereof or any estate or interest therein to any
party, and no party other than Borrower has any
legal, beneficial or equitable right, title or
interest in the Collateral;
(g) With Respect to the Contracts, (i) Borrower is the
owner and holder of all of the "TEE ONE UP"
interest under the Contracts, (ii) there are no
assignments (other than as previously disclosed to
Lender or pursuant to the Loan Documents) of the
Contracts or any portion of the income, charges,
issues or profits due and payable or to become due
and payable thereunder (the "Contract Income")
which are presently outstanding, (iii) the
Contracts have not been modified or amended, (iv)
all of the Contracts are in full force and effect,
(v) to the best of Borrower's knowledge, no other
party to any Contract is in default under any
material terms, covenants or provisions thereof and
Borrower knows of no event which, but for the
passage of time or the giving of notice or both,
would constitute an event of default under any of
the Contracts, (vi) neither Borrower nor any other
party to any Contract has commenced any action or
given or served any notice for the purpose of
terminating any of the Contracts, (vii) all
Contract Income due and payable to date under the
Contracts has been paid in full and no such
Contract Income has been paid more than one month
in advance of the due dates thereof, and (viii) to
the best of Borrower's knowledge, there are no
offsets or defenses to the payment of any portion
of the Contract Income;
(h) There are no federal tax claims or liens assessed
or filed against Borrower and there are no
judgments against Borrower unsatisfied of record or
docketed in any court located in the United States,
and no petition in bankruptcy has ever been filed
by or against Borrower or any affiliate of Borrower
and none of them have ever made any assignment for
the benefit of creditors or taken advantage of any
insolvency act or any act for the benefit of
debtors;
(i) There is no Default or Event of Default (as defined) under any of
the Loan Documents and no event has occurred and is continuing
which with notice and/or the passage of time would constitute a
Default or Event of Default under any thereof;
(j) Borrower is not in default, nor to Borrower's knowledge is any
third party in default, under or with respect to any material
contract, agreement lease or other instrument to which Borrower is
a party;
(k) Borrower has no defenses, setoffs or counterclaims with respect to
payment of all amounts owed and the performance of all obligations
to be performed under the Loan Documents;
3
(l) The financial statements (including the notes thereto) provided to
Lender by Borrower fully and accurately reflect the financial
condition of Borrower as of the date thereof, and there has been
no material change in the financial condition of Borrower since
the date of such financial statements;
(m) All federal state, local and foreign tax returns,
reports and statements required to be filed by
Borrower will have been filed with the appropriate
governmental agencies, and all charges and other
impositions shown thereon to be due and payable by
Borrower will have been paid prior to the date on
which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof, or any
such fine, penalty, interest late charge or loss
has been paid;
(n) To the best of Borrower's knowledge, the Contracts and the
business operations conducted by Borrower are in full compliance
with all federal, state and local statutes, laws, ordinances,
codes, rules, regulations, orders or decrees regulating or
relating to such Collateral and/or business operations
("Applicable Laws");
(o) No action or proceeding of any kind is pending or, to the best of
Borrower's knowledge, threatened, nor have any settlements been
reached, by or with any persons alleging a violation of any
Applicable Laws;
(p) Borrower has received no notice of, and has no knowledge of, any
occurrence or circumstance that with or without notice or passage
of time or both would give rise to a claim that Borrower or its
business operations violate or have violated any Applicable Laws.
6. Covenants.
In addition to any covenants found elsewhere in the Loan Documents,
Borrower covenants with Lender as follows:
(a) Borrower shall comply with all laws, ordinances,
order, rules and regulations of all federal, state,
county and municipal governments and appropriate
departments, commissions, boards and officers
thereof which now are or at any time in the future
may be applicable to Borrower or Borrower's
business operations, or any part thereof or the
transactions contemplated hereby (including all
Applicable Laws).
(b) Borrower shall keep proper books of record and
account in accordance with sound accounting
practice, which shall reflect and disclose in
reasonable detail all items of income and expense
from the Collateral and the operation of Borrower's
business. Lender shall have the right to examine
and audit the books of account and the records of
Borrower and the statements furnished by Borrower
pursuant hereto (which books, records and
statements, and the data used as a basis for their
preparation, shall be kept and preserved for at
least five years) and to discuss the affairs,
finances and accounts of Borrower and to be
informed as to the same by Borrower's managing
partner or chief executive officer, all at such
reasonable times and intervals as Lender may
desire, and Borrower shall furnish to Lender
convenient facilities for the examination, audit
and copying of such books, records, statements and
data. Within ten (10) days after request therefor,
Borrower shall furnish to Lender such interim
balance sheets and profit and loss statements and
income and expense reports, and such other
financial information, with respect to Borrower or
any other person liable for payment of any part of
the Loan, as may be reasonably requested by Lender.
Borrower shall deliver to Lender such other
information with respect to the Collateral and
Borrower's operations as Lender may request from
time to time.
4
(c) Borrower hereby agrees to defend, indemnify and save Lender
harmless from and against all loss, damage, liability and expense
(including) reasonable attorneys' fees and expenses, whether
within or outside the judicial process) that Lender may sustain
on account of any action taken pursuant to any Applicable Laws or
under common law, pertaining to or in any manner arising out of
or related to the Loan, the Collateral, or Borrower's business
operations. The foregoing indemnity shall survive the repayment
in full of the Loan.
(d) Borrower shall, within ten (10) days after receipt, provide Lender
with copies of all notices received by Borrower in connection with
any Applicable Laws.
For purposes of this paragraph, the term "notice" shall mean any
summons, citation, directive, order, claim, pleading, letter,
application, filing, report, findings, declarations or other
materials pertinent to compliance with any Applicable Laws.
(e) Borrower shall do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and shall
not permit the dissolution or termination of Borrower.
(f) Borrower shall nor cancel any claim or debt owing to it except for
reasonable consideration and in the ordinary course of business.
7. Events of Default.
The following shall constitute a Default or Event of Default, as the
case may be, hereunder:
(a) The occurrence of a Default or Event of Default (as defined
therein) under the Note or any other Loan Document.
(b) The failure by Borrower to punctually perform or
observe any covenant or agreement contained in this
Agreement or any other Loan Document, which failure
is not cured within five (5) days after written
notice from Lender of such failure, other than the
obligation to repay the Loan (or portion thereof)
in full pursuant to the last paragraph of Section
2 hereof, which failure shall not be curable.
(c) At any time any representation or warranty made by Borrower herein
or in any other Loan Document delivered by Borrower to Lender in
connection with the Loan is or becomes materially misleading in
any material respect
(d) Borrower shall voluntarily or involuntarily, by operation of law
or otherwise, sell, transfer or dispose of all or any part of the
Collateral or any interest therein, without the prior consent of
Lender, which consent may be granted or withheld in Lender's sole
and absolute discretion. A transfer or disposition of the
Collateral or any part thereof or interest therein shall include,
without limitation, the granting of any option to purchase, right
of first refusal or offer or similar right, or any direct or
indirect sale, assignment, pledge, hypothecation, conveyance,
transfer or other alienation of all or any part of the Collateral
or any interest therein. The following shall also constitute a
transfer of the Collateral, whether made directly or indirectly
through one (1) or more intermediaries, and whether made in a
single transaction or in a series of transactions:
(i) if Borrower or a controlling shareholder of Borrower is a
corporation, a transfer or other disposition (whether by
operation of law or otherwise) of more than forty-nine percent
(49%) of the outstanding voting stock of Borrower or such
shareholder or of the direct or remote parent of Borrower or
such shareholder;
(ii)if a controlling shareholder of Borrower is a partnership, a
transfer or other disposition (whether by operation of law or
otherwise) of any interest of a general partner of such
partnership, except as excepted or permitted herein; or
(iii)if a controlling shareholder of Borrower is a trust or other
entity, a transfer or other disposition (whether by operation
of law or otherwise)) of more than 49% of the beneficial
interest in such trust.
5
(e) Borrower (i) applies for or consents to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or
liquidator of Borrower or of all or a substantial part of its
property, (ii) admits in writing its inability, or is generally
unable, to pay its debts as such debts become due, (iii) makes a
general assignment for the benefit of its creditors, (iv)
commences a voluntary case under the federal Bankruptcy Code (as
now or hereafter in effect), (v) files a petition seeking to take
advantage of any other law relating to bankruptcy insolvency,
reorganization, winding up or composition or adjustment of debts,
(vi) fails to controvert in a timely and appropriate manner, or
acquiesces in writing to, any petition filed against it in an
involuntary case under such Bankruptcy Code or (vii) takes any
action for the purpose of effecting any of the foregoing.
(f) A proceeding or case is commenced without the
application or consent of Borrower in any court of
competent jurisdiction seeking (i) the liquidation,
reorganization, dissolution, winding up or
composition or readjustment of debts of Borrower,
(ii) the appointment of & trustee, receiver,
custodian, liquidator or the like of Borrower or of
all or any substantial part of its assets or (in)
similar relief in respect of Borrower under any law
relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts.
(g) A final judgment or judgments for the payment of money in excess
of $50,000 in the aggregate is rendered against Borrower and is
not discharged or execution thereof stayed within thirty (30) days
from the date of entry thereof.
8. Remedies.
If any Event of Default shall have occurred, Lender may, without
notice, take any or all of the following actions:
(a) declare all or any portion of the Loan and any
other indebtedness evidenced and secured by the
Loan Documents to be forthwith due and payable,
whereupon such indebtedness shall become due and
payable without presentment, demand, protest or
further notice of any kind, all of which are
expressly waived by Borrower provided, however,
that, upon the occurrence of an Event of Default
specified in Section 7(e) or (f), all of such
indebtedness shall become due and payable without
declaration, notice or demand by Lender;
(b) enforce any or all of Lender's rights and remedies
under the Loan Documents or as may be otherwise
available at law or in equity.
9. Application of Payment.
Borrower irrevocably waives the right to direct the application of any
and all payments at any time or times hereafter received by Lender from or on
behalf of Borrower and irrevocably agrees that Lender shall have the continuing
exclusive right to apply any and all such payments against the then due and
payable indebtedness and in repayment of the Loan as Lender may deem
advisable.
10. Miscellaneous.
The following conditions shall be applicable throughout the term of
this Agreement:
(a) Borrower may not assign this Agreement or the
proceeds of the Loan.
(b) Any condition of this Agreement that requires the
submission of evidence of the existence or
nonexistence of a specified fact or facts implies
as a condition the existence or nonexistence, as
the case may be, of such fact or facts and the
Lender shall, at all times, be free independently
to establish to its satisfaction and in its
reasonable discretion such existence or
nonexistence.
(c) All notices, demands, waivers, consents, approvals and other
communications hereunder shall be in writing and shall be deemed
to have been sufficiently given or served for all purposes when
sent in the manner provided for in the Note.
6
(d) This Agreement shall be construed and enforced in accordance with
the laws of the State of Nevada applicable to contracts entered
into and performed therein.
(e) Lender and Borrower acknowledge and agree that the
only appropriate forums for any legal dispute
arising under or in connection with this Agreement,
and each party hereby irrevocably submits itself to
the personal jurisdiction of, the United States
District Court for the District of Nevada and the
Eighth Judicial District Court of the State of
Nevada, and the parties consent and agree that such
courts shall have sole jurisdiction over any matter
arising under or in connection with this Agreement.
(f) Neither this Agreement nor any provision hereof may be changed,
waived, discharged or terminated orally, but only by a writing
signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
(g) Lender shall have the right to assign the Loan Documents or the
collateral held by Lender hereunder without Borrower's consent,
and allprovisions of this Agreement shall continue to be
applicable and Borrower shall continue to be bound under the
Note, the Security Agreement, this Agreement and any other Loan
Documents. If the Loan is assigned as herein set forth and the
assignee assumes the obligations of Lender under this Agreement,
the assignment and assumption shall be deemed compliance by the
assignor with this Agreement and to have been made pursuant
hereto, and any advances made after the assignment shall continue
to be included in the Note and secured by the lien of the
Security Agreement. The assignor, after delivery of the duplicate
original of the assignee's assumption of Lender's rights and
obligations under this Agreement, shall be relieved of all of its
obligations under this Agreement. Borrower Shall have no
obligation to make any payments to such assignee until Lender or
such assignee gives notice of such assignment to Borrower.
(h) Borrower shall pay to Lender the reasonable fees of
Lender's counsel (at its regular hourly rates for
time spent plus disbursements) and other
consultants incurred by Lender in connection with
making, monitoring, collecting and enforcing the
Loan and the Loan Documents in accordance with the
terms of this Agreement promptly upon receipt of
bills therefor from time to time until the Loan and
all such fees shall have been paid in full; and it
will pay all costs and expenses required to satisfy
the conditions of this Agreement, including,
without limitation, all taxes and recording
expenses, including stamp taxes, if any.
(i) This Agreement sets forth the entire agreement between the parties
hereto with respect to the matter covered hereby. All prior
negotiations, understandings and discussions am merged herein.
(j) Lender shall have the right, in its sole and absolute discretion,
at any time and from time to time to invite participants to
participate in the Loan. Borrower agrees to execute any documents
reasonably requested by Lender in connection with any such
participation.
7
(k) This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same
document, and any of the parties or signatories hereto may execute
this Agreement by signing any of such counterparts.
(l) The Lender shall at all times and at any time have the right to
waive any of the obligations of Borrower hereunder and such waiver
shall not be deemed a modification of this Agreement.
(m) Unenforceability for any reason of any provision of this Agreement
shall not limit or impair the operation or validity of any other
provision of this Agreement or of any other of the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized representatives as of the date
and year first above written.
BORROWER: TEE ONE UP, INC.,
a Nevada corporation
By: /s/ XXXXXXXX XXXXXX
-------------------------
Name: Xxxxxxxx Xxxxxx
Title: Chief Financial Officer
LENDER: Pacific D.N.S., Inc.,
a Nevada corporation
By: /s/ XXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
13
PROMISSORY NOTE
Up to $300,000 Las Vegas, Nevada
September 4, 1996
FOR VALUE RECEIVED, TEE ONE UP, INC., a Nevada corporation ("Borrower"),
promises to pay to Pacific D.N.S., Inc., a Nevada corporation ("Lender"), or
order, at 0000 Xxxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxx 00000, or at such other place
as may be designated in writing by Lender, without setoff or deduction, the
principal sum of Three Hundred Thousand Dollars ($300,000) (or such lesser
amounts as may be advanced hereunder), with interest thereon at the rate, in the
amounts and in the manner set forth herein.
The term of this Note shall commence on the date hereof and shall end on
September 3, 1998 (the "Maturity Date"); provided, however, that if at any time
prior to the Maturity Date the Borrower or any majority-owned subsidiary or
affiliate of Borrower receives the proceeds from any public or private debt
and/or equity financing which provides not less than One Million Dollars
($1,000,000) in proceeds to the Borrower (or such subsidiary or affiliate),
Borrower will apply up to thirty percent (30%) of the first One Million Dollars
($1,000,000) of proceeds therefrom in mandatory prepayment of all amounts of
principal and interest then outstanding hereunder. All payments due under this
Note shall be applied first against accrued interest and then against the
outstanding principal amount due hereunder. Borrower shall pay all amounts due
under this Note directly to Lender in lawful money of the United States of
America.
Interest Rate. This Note shall bear interest from and after the date hereof
at the rate of seventeen percent (17%) per annum (the "Interest Rate") from and
after the date hereof, computed on the basis of a 360-day year of twelve (12)
30-day months.
Monthly Payments; Final Payment. Subject to mandatory prepayment as
provided herein, the interest and principal due under this Note shall be paid in
twenty-four (24) equal monthly installments (each, a "Monthly Payment"), due and
payable in arrears commencing on October 1, 1996, with the final such payment
(the "Final Payment") due on the Maturity Date, each such installment to be in
an amount sufficient to fully-amortize the loan evidenced hereby over the stated
term hereof.
Late Charge; Late Rate. Borrower shall make all Monthly Payments by wire
transfer or other payment of immediately available funds received as directed by
Lender not later than the date such payment is due and payable. If any Monthly
Payment due under this Note is not paid within five (5) days of such date,
Borrower shall pay a late charge ("Late Charge") in an amount equal to five
percent (5%) of such delinquent Monthly Payment. Any such payment upon which a
Late Charge is due shall not be deemed to have been paid until Borrower shall
have also paid the Late Charge. Borrower agrees that the Late Charge is paid to
compensate Lender for the additional cost and expense incurred by Lender as a
result of the late payment, and is not a penalty. Such Late Charge represents a
reasonable sum considering all of the circumstances existing on the date of this
Note and represents a fair and reasonable estimate of the costs that will be
sustained by Lender due to the failure of Borrower to make timely payments. The
parties further agree that the proof of actual damages would be costly or
inconvenient. Such Late Charge shall be paid without prejudice to the rights of
Lender to collect any other amounts provided to be paid or to declare a default
under this Note or from exercising any of the other rights and remedies of
Lender.
If the Final Payment is not paid when due, including upon any acceleration
of this Note due to a Default or Event of Default (as defined in the Loan
Agreement) by Borrower, then the outstanding principal balance of this Note
shall bear interest, from such due date until the date of such payment, at a
rate equal to twenty-five percent (25%) per annum (the "Late Rate"). In addition
to the Late Charge, any Monthly Payment not paid within thirty (30) days of the
date due shall also bear interest at the Late Rate, computed from the date such
payment was due.
Prepayment. Borrower shall have the right to prepay all or any portion of
the outstanding principal balance of this Note at any time and from time to
time, without premium or penalty of any kind.
1
Loan Agreement; Security. This Note is made pursuant to a Loan Agreement of
even date herewith between Borrower and Lender (the "Loan Agreement") and is
entitled to the benefits and security contemplated by that certain Assignment of
Contacts and Security Agreement (the "Security Agreement") of even date herewith
and made by Borrower in favor of Lender pursuant to the Loan Agreement, and
certain other rights and security as described in the Loan Agreement. This Note
evidences, and the Security Agreement secures payment of, the indebtedness of
Borrower incurred for moneys borrowed from Lender as well as all other loans,
advances or cost made or incurred by Lender at any time or times hereafter under
the Loan Agreement, and the amount of any such other loan, advance or cost shall
be added to the principal indebtedness hereunder and shall bear interest at the
Interest Rate, provided that if a Default or Event of Default exists and is
continuing, such interest shall be at the Late Rate (whichever rate is in effect
at the time in question is referred to herein as the "Note Rate"). The Loan
Agreement contains provisions for acceleration of the maturity of this Note upon
the occurrence of certain events described therein.
Default. If Borrower fails to pay any amount due under this Note in the
manner and at the time specified herein and Lender shall not have received such
payment within five (5) days after written notice from Lender of such failure is
received by Borrower, or there is a Default or Event of Default under the Loan
Agreement and/or the Security Agreement, then, in any such event, the entire
outstanding principal balance of this Note, additional loans or advances secured
by the Security Agreement and all other sums owed by Borrower to Lender pursuant
to the terms of this Note, the Loan Agreement and/or the Security Agreement,
together with unpaid interest accrued thereon, shall at the option of Lender
become immediately due and payable without further notice or demand, and Lender
may forthwith exercise the remedies available to Lender at law and in equity as
well as those remedies provided for herein and in the Security Agreement and/or
in the Loan Agreement.
Miscellaneous. Except for any notices which are expressly required by the
terms of this Note, Borrower and any endorser of this Note hereby waive
diligence, demand, presentment for payment, notice of nonpayment, protest,
notice of dishonor and notice of protest and specifically consent to and waive
notice of any renewals, modifications or extensions of this Note, whether in
favor of Borrower or any other person or persons, and hereby waive any defense
by reason of extension of time for payment or other indulgence granted by
Leader.
No delay or failure of Lender in exercising any right, remedy or privilege
under this Note or under the Loan Agreement shall affect such right, remedy or
privilege, nor shall any single or partial exercise thereof or any abandonment
or discontinuance of steps to enforce such a right, remedy or privilege preclude
any further exercise thereof or the exercise of any other right, remedy or
privilege. The rights, remedies and privileges of Lender hereunder are
cumulative and not exclusive of any rights, remedies or privileges which Lender
would otherwise have. Any waiver, permit, consent or approval of any kind or
character on the part of Lender of any breach or default under this Note, or of
any provision or condition of this Note, must be in writing and shall be
effective only to the extent specifically set forth in such writing. No notice
to or demand on Borrower shall entitle Borrower to any other or further notice
or demand in other similar circumstances. A waiver on any one occasion shall not
be construed as a waiver or bar to any right, remedy or privilege on any other
occasion.
All notices, demands, requests consents, approvals or other instruments
required or permitted to be given pursuant hereto shall be in writing and shall
be deemed to have been given upon (i) actual receipt, if hand delivered, (ii)
confirmed transmission, if delivered by facsimile transmission, except if such
facsimile is transmitted other then between 8:00 a.m. and 5:00 p.m. on a
business day in the location of the recipient, such facsimile transmission shall
be deemed to have been received the next business day, (iii) the next business
day, if delivered by express delivery service or overnight courier service and
such delivery is confirmed by such service. or (iv) the third business day
following the day of deposit of such notice in registered or certified mail,
postage prepaid, return receipt requested. Notices shall be provided to the
addresses (or facsimile numbers, as applicable) specified below:
If to Borrower: TEE ONE UP, INC.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Lender: Pacific D.N.S., Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses as are designated by notice pursuant to
this paragraph.
2
Borrower shall pay all costs of collection on demand by Lender, including
without limitation, reasonable attorneys' fees and disbursements, which costs
may be added to the indebtedness hereunder, together with interest thereon at
the Note Rate.
This Note may not be amended or modified except by a written agreement duly
executed by Borrower and Lender, and Lender shall have no obligation to extend
or renew the Loan.
This Note is to be construed and enforced in all inspects in accordance
with the laws of the State of Nevada applicable to contracts made and performed
therein. If any provision hereof is held to be invalid or unenforceable by a
court of competent jurisdiction, the other provisions of his Note shall remain
in full force and effect and shall be liberally construed in favor of Lender.
Borrower acknowledges and agrees that the only appropriate forums for any
legal dispute arising under or in connection with making, enforcing and/or
interpreting of this Note, and such party hereby irrevocably submits itself to
the personal jurisdiction of, the United States District Court for the District
of Nevada and the Eighth Judicial District Court of the State of Nevada, and
such party consents and agrees that such courts shall have sole jurisdiction
over any matter arising under or in connection herewith.
Notwithstanding anything to the contrary contained herein, the obligations
of Borrower to Lender under this Note are subject to the limitation that
payments of interest to Lender shall not be required to the extent that receipt
of any such payment by Lender would be contrary to provisions of applicable law
limiting the maximum rate of interest that may be charged or collected by
Lender. The portion of any such payment received by Lender that is in excess of
the maximum interest permitted by such provisions of law shall be credited to
the principal balance hereof.
Borrower represents and warrants to Lender that the proceeds of the Loan
evidenced by this Note shall be used solely for commercial investment or
business purposes, and not for family, household or personal purposes.
Whenever used herein the words "Borrower" and "Lender" shall be deemed to
include, to the extent applicable, the respective heirs, personal
representatives, successors and assigns of Borrower and of Lender including,
with respect to Lender, any subsequent holder of this Note. If "Borrower" is
made up of more than one person and/or entity, each such person and/or entity
shall be jointly and severally liable on this Note.
This obligation shall bind Borrower and, to the extent applicable, its
heirs, personal representatives, successors and assigns, and the benefits hereof
shall inure to Lender and its successors and assigns.
This Note is and shall be a fully recourse obligation of Borrower, and
Borrower shall be and remain personally liable beyond its interest in any
security given by Borrower pursuant to the Loan Agreement.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the
date first written above.
BORROWER: TEE ONE UP, INC.,
a Nevada corporation
By: \s\Xxxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxxx Xxxxxx
Title: Chief Financial Officer
3
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made as of September 4, 1996
between Tee One Up, Inc., a Nevada corporation ("Debtor"), and Pacific D.N.S.
Inc., a Nevada corporation ("Secured Party"). with reference to the following
facts and circumstances:
WHEREAS, in connection with a loan (the "Loan") being made concurrently by
Secured Party to Debtor, Debtor has executed and delivered to Secured Party its
promissory note dated September 4, 1996 (the "Note") in the original principal
amount of Three Hundred Thousand Dollars ($300,000);
WHEREAS, the loan is to be made pursuant to a Loan Agreement dated as of
September 4, 1996 (the "Loan Agreement"), between Debtor and Secured Party;
WHEREAS, Debtor intends to use the proceeds of the Loan in connection with
Debtor's hole-in-one verification system and related activities business, which
business includes, without limitation, the activities described in the
"Contracts" as described in the Loan Agreement ("Debtor's Business"); and
WHEREAS, Debtor wishes to provide collateral for the obligations evidenced
by the Note by entering into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor and Secured Party hereby agree as follows:
ARTICLE I
GRANT AND SECURED OBLIGATIONS
Section 1.01. Grant. Debtor hereby grants a security interest to Secured
Party, under and subject to the terms and conditions hereinafter set forth, in
all estate, property, right, title and interest of Debtor, whether now owned or
hereafter acquired, in, to and under the following described property, all of
which may be referred to herein collectively as the "Collateral":
(a) all equipment, machinery, appliances, fixtures, goods, merchandise, and
other personal property, including without limitation computer hardware
and software and all rights thereto, now or hereafter owned or used by
Debtor in Debtor's Business or any part thereof;
(b) all contracts and agreements now or hereafter entered
into by Debtor or any successor, assign or affiliate of
Debtor;
(c) all fees, income, receipts, payments, revenues or compensation, however
denominated, and all deposits and deposit agreements, escrow funds,
insurance proceeds and other funds or receipts earned in, derived from
or otherwise relating to or arising from Debtor's Business or any part
thereof;
(d) all contract rights and benefits, documents, insurance policies,
agreements, contracts and other instruments and general intangibles
relating to the Debtor's Business or any part thereof and all other
contractual arrangements creating a right in Debtor as a result of its
ownership or operation of all or any part of the Debtor's Business,
whether written or verbal;
(e) all permits, plans and specifications, governmental approvals,
certificates, licenses, authorizations, and other rights used or useful
in Debtor's Business or any part thereof and any other consents and
approvals which Debtor may now or hereafter own with respect to or in
connection with the Debtor's Business or any part thereof;
(f) all of Debtor's accounts receivable, rights to payment, accounts,
notes, drafts, acceptances, instruments, documents of title, policies
and certificates of insurance, insurance claims or payments in
connection with any loss or damage to the above-described collateral
whether from insurance or otherwise, general intangibles and chattel
paper, which shall include, without limitation, such thereof as arise
out of the operation of Debtor's Business;
(g) All rights, remedies, powers and privileges of Debtor
with respect to any of the foregoing or following; and
(h) All proceeds, products, revenues, profits and rents of and from any and
all of the foregoing property, in any form whether cash or non-cash in
nature and whether represented by checks, drafts, notes, or other
instruments for the payment of money, invoices, accounts, chattel paper
and other forms of obligations and receivables, or otherwise, and
including without limitation any of same which are received, due or to
become due with respect to any sale, exchange or other disposition of
any or all of the foregoing property.
1
Section 1.02. Secured Obligations. This Agreement shall
secure the following indebtedness and obligations:
(a) Payment of the indebtedness evidenced by the Note,
including any and all replacements, renewals, amendments,
extensions, substitutions and modifications thereof;
(b) Payment of all other indebtedness and performance of all other
obligations and covenants of Debtor contained in any Loan Document (as
defined in the Loan Agreement) or otherwise owing from Debtor to
Secured Party at any time.
The indebtedness and the obligations secured by this Agreement as described
above may be referred to herein as the "Secured Obligations." This Agreement and
the security interest in the Collateral as provided herein shall continue until
delivery to Debtor of a termination statement.
ARTICLE II
DEBTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01. Representations and Warranties. Debtor
represents and warrants as follows:
(a) Debtor is and as to Collateral acquired after the date hereof will be
the owner of the Collateral free from any adverse liens, security
interest or encumbrance. Debtor is in exclusive possession of the
Collateral. Debtor shall defend the Collateral against all claims and
demands of all persons.
(b) There is no financing statement now on file covering any of the
Collateral or in which Debtor is named as or signs as a debtor. Without
the prior written consent of secured Party, Debtor will not execute nor
permit the filing of any such financing statement or statements.
Section 2.02. Covenants. Debtor covenants and agrees as
follows:
(a) Debtor will promptly notify Secured Party of any other change of
location of the Collateral or any change of its place of business. All
books and records of Debtor pertaining to Debtor's business shall also
be kept at such location.
(b) Debtor will not sell or dispose of the Collateral or any interest
therein, except in the ordinary course of Debtor's business operations
and in a manner consistent with the covenants and terms of this
Agreement and the other Loan Documents. Upon written notice from
Secured Party, Debtor shall not sell any of the Collateral except on
and under such terms and under such terms andconditions as may
thereafter be authorized in writing by Secured Party.
(c) Debtor will not misuse or conceal Collateral nor use it contrary to the
provisions of any insurance coverage and will at its own expense
properly keep and maintain the Collateral and promptly pay when due all
costs and expenses incurred or accruing in connection with the custody,
care and possession thereof.
(d) Debtor will keep the Collateral in good condition and repair, free from
any liens, security interests or encumbrances (other than those in
favor of Secured Party), and Debtor will not waste or destroy the
Collateral or any part thereof and will not use the Collateral in
violation of any law, statute or ordinance.
(e) To the extent appropriate, Debtor shall keep the Collateral insured
with an insurance company or companies acceptable to Secured Party, at
all times against casualty, loss or damage with "all risk" coverage and
against such other risks as Secured Party may require. Debtor shall
also maintain liability, casualty and other appropriate insurance with
respect to Debtor's Business and the assets and property used therein
in customary and prudent amounts for such a business or as Secured
Party may otherwise from time to time require.
(f) Debtor agrees to pay all expenses, including attorneys' fees, incurred
by Secured Party in the preservation, realization, enforcement and
exercise of the rights, powers and remedies of Secured Party or the
obligations of Debtor hereunder, including without limitation any
expenses of Secured Party pursuant to Section 3.01 hereof; and to
indemnify Secured Party against all losses, claims, demands and
liabilities of every kind caused by the Collateral or the operation of
Debtor's Business.
2
(g) Debtor agrees to conduct its business efficiently and without voluntary
interruption; to preserve its rights, privileges and franchises held
and used in its business; to keep its business properties in good
repair; to give Secured Party notice of any litigation which may
adversely affect its business; and to promptly pay when due all taxes,
liens, fees, charges and assessments upon the Collateral and its other
properties.
ARTICLE III
INSPECTION/PROTECTION OF COLLATERAL
Section 3.01. Right to Inspect and Protect Collateral. Secured Party or its
agents may at anytime enter on any lands or premises where any of the Collateral
is located to inspect the same. Secured Party at its option may take possession
of the Collateral or any part thereof in order to care for, maintain, protect or
market the same or any part thereof or to carry out or enforce any of the
provisions of this Agreement if Debtor has failed to do so or if Secured Party
deems that Debtor has failed to do so properly or at the proper time or in the
proper manner. Secured Party make take such means and proceedings and do all
acts and things and advance or pay such amounts as Secured Party deems necessary
or advisable to insure, protect, care for, maintain, transport or market the
Collateral or any part thereof.
Section 3.02. Inspection of Records. Secured Party may at any time inspect,
during reasonable business hours, any of the business locations or premises of
Debtor and the books and records of Debtor relating to the Collateral, as well
as those relating to its general business and financial condition. Debtor agrees
to keep accurate and complete books and records. Debtor further agrees to
furnish from time to time such reports, data and financial statements, in
respect to Debtor's business and financial condition as Secured Party may
reasonably require. Debtor agrees to furnish upon Secured Party's request a
complete list of all Accounts of Debtor showing the name and address of the
person indebted to Debtor and the amount of the indebtedness so that Secured
Party can ascertain the Accounts of Debtor subject to this Agreement.
Section 3.03. Protection of Collateral. Should Debtor fail to do so,
Secured Party may, but shall not be obligated to: obtain insurance required
hereunder; pay taxes, assessments, liens, fees, charges or encumbrances; order
and pay for repairs; or otherwise spend any amounts or do any acts Secured Party
deems necessary to maintain the Collateral in Debtor's exclusive possession and
in good condition. All amounts expended by Secured Party, with interest thereon
at the rate provided by the Note, shall constitute an indebtedness of Debtor to
Secured Party secured by the Collateral and shall be immediately due and
payable. No such act or expenditure by Secured Party shall relieve Debtor from
the consequences of such default. The making of any such payment or the
performance of any such act or obligation by Secured Party shall constitute
prima facie evidence of the necessity therefore and the reasonableness thereof.
Section 3.04. Risk of Loss and Care of Collateral. The risk of loss or
damage to the Collateral at all times is assumed by Debtor who agrees to hold
Secured Party harmless from any loss resulting therefrom.
ARTICLE IV
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 4.01. Events of Default. Anyone or more of the
following events shall be deemed an Event of Default hereunder:
(a) failure by Debtor to punctually perform or observe any covenant or
agreement contained in this Agreement, which failure is not cured
within five (5) days after written notice from Secured Party of such
failure;
(b) the occurrence of any default or Event of Default (as
defined therein) under any of the other Loan Documents;
or
(c) if a significant portion (determined in the sole discretion of the
Secured Party) of the Collateral is lost, stolen or suffers substantial
damage or destruction.
Section 4.02. Rights and Remedies. Secured Party shall have the rights,
options, duties and remedies of a secured party, and Debtor shall have the
rights and duties of a debtor under the applicable provisions of the uniform
Commercial Code. Upon the occurrence of an Event of Default, Secured Party may,
at Secured Party's sole option exercised in Secured Party's sole discretion,
pursuant to any one or more of the following remedies:
3
(a) Declare all or any portion of the Secured Obligations to be due and
payable, and the same shall thereupon become due and payable without
any presentment, demand, protest or notice of any kind except as
otherwise provided herein, and Debtor hereby waives notice of intent to
accelerate or demand payment of the Secured Obligations;
(b) Take immediate possession of all or any portion of the Collateral
without notice or resort to legal process and for such purpose to enter
upon any premises on which the Collateral or any part thereof may be
situated and remove the same therefrom or at its option render the
Collateral immovable. Whether or not any non-judicial proceedings are
brought or commenced by Secured Party, Secured Party shall be entitled
to the appointment of a Receiver to take charge of the Collateral,
collect the rents, issues and profits therefrom care for and repair the
same, improve the same when necessary or desirable, sell, lease or rent
the Collateral or portions thereof (including leases extending beyond
the term of receivership), market
Collateral and otherwise use, utilize and realize upon the Collateral,
and to have such other rights and duties as may be fixed by the Court.
If Secured Party elects not to obtain a receiver and/or pending the
appointment of a receiver, Secured Party may exercise such rights
itself. Debtor specifically agrees that a Receiver may be appointed
without any notice to Debtor whatsoever, and the Court may appoint a
Receiver without reference to the adequacy of the security, the
solvency of the Debtor, or such other matters as might otherwise be
taken into account by Courts in the discretionary appointment of
Receivers, it being the intention of Debtor thereby authorize the
appointment of a Receiver whenever Debtor is in default and Secured
Party has requested the appointment of a Receiver. Debtor hereby agrees
and consents to the appointment of the particular person or firm
designated by Secured Party and hereby waives any right to suggest or
nominate any person or firm as Receiver in opposition to that
designated by Secured Party;
(c) Require Debtor to assemble the Collateral and make it available to
Secured Party at a place, to then be designated by Secured Party, which
is reasonably convenient to both parties;
(d) Retain the Collateral or any portion thereof in satisfaction of the
Secured Obligations or any portion thereof by sending written notice of
such election to Debtor; but unless such written notice is sent by
Secured Party as aforesaid, retention of such Collateral shall not be
in satisfaction of any obligations hereunder;
(e) At any sale or disposition of the Collateral, accept a trade of
property for all or a portion of the sale price and/or credit bid all
or any portion of the Secured Obligations upon the sale price of the
Collateral;
(f) Apply the proceeds realized from the disposition of the Collateral to
payment of collection costs and expenses (including attorneys' fees)
incurred by Secured Party;
(g) Collect from Debtor, and Debtor shall forthwith pay, any deficiency
balance to the Secured Party if the proceeds realized from disposition
of the Collateral shall fail to satisfy all of the obligations of
Debtor to Secured Party; and/or
(h) Exercise any other rights or remedies which may not or hereafter be
available to Secured Party under this Agreement, the other Loan
Documents, and/or pursuant to applicable law or in equity.
Any written notice required to be given Debtor, if given by any means set
forth in Section 5.03 below, shall be deemed reasonable notification to Debtor
for all purposes.
Section 4.03. Remedies Not Exclusive; Delay. No remedy herein conferred
upon or reserved to Secured Party is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or ow or hereafter
existing at law or in equity or by statute. Every power or remedy given by any
of the Loan Documents to Secured Party, or to which it may be otherwise
entitled, may be exercised concurrently or independently, from time to time and
as often as may be deemed expedient by Secured Party, and Secured Party may
pursue inconsistent remedies. No delay by Secured Party in the exercise of any
right or remedy under the Loan Documents shall operate as a waiver thereof or
preclude the exercise thereof during the continuance of any default hereunder.
4
Section 4.04. Automatic Relief From Stay. In the event that Debtor
commences a case under the Code or is the subject of an involuntary case that
results in an order for relief under the Code subject to court approval, Secured
party shall thereupon be entitled and Debtor irrevocably consents to relief from
any stay imposed by Section 362 of the Code or against the exercise of the
rights and remedies otherwise available to Secured Party as provided in this
Assignment and Debtor hereby irrevocably waives its rights to object to such
relief. In t he event Debtor shall commence a case under the Code or is the
subject of an involuntary case that results in an order for relief under the
Code, Debtor hereby agrees that no injunctive relief against Secured Party shall
be sought under Section 105 or other provisions of the Code by Debtor or other
person or entity, nor shall any expansion be sought of the stay provided by
Section 362 of the Code.
ARTICLE V
MISCELLANEOUS
Section 5.01. Further Assurances. Debtor agrees to execute and deliver such
financing statements, amendments and supplements thereto, or other instruments
as Secured Party may from time to time require in order to comply with the
Uniform Commercial Code and to preserve, protect and enforce the security
interest of Secured Party herein granted. Debtor agrees to pay all cost of
preparing and placing such statements or instruments of recorded, and further
agrees that any true and correct carbon, photographic or other reproductive copy
of this Agreement or the financing statement relating hereto may be filed or
recorded as a financing statement.
Section 5.02. Successors and Assigns; Assignment of Secured Party's
Interest. This Agreement applies to and binds Debtor and inures to the benefit
of Secured Party, it heirs, legatees, devisees, administrators, executors,
successors and assigns. The covenants and agreements of Debtor contained herein
shall apply to and be binding upon any successor owner of the Collateral or any
part thereof (other than a bona fide buyer for value in the normal course of
Debtor's business). the term "Secured Party" shall also mean and include any
successor or successors and any assign or assigns of Secured Party. Debtor
hereby specifically grants unto Secured Party the right and privilege, at
Secured Party's option, to transfer and assign to any one or more third person
all or any part of Secured Party's rights with respect to the Secured
Obligations and/or this Agreement.
Section 5.03. Notices. All notices, demands, requests, consents, approvals
or other instruments required or permitted to be given pursuant hereto shall be
in writing and shall be deemed to have been given upon (i) actual receipt, if
hand delivered, (ii) confirmed transmission if delivered by facsimile
transmission, except if such facsimile is transmitted other than between 8:00
a.m. and 5:00 p.m. on a business day in the location of the recipient, such
facsimile transmission shall be deemed to have been received the next business
day, (iii) the next business day, if delivered by express delivery service or
overnight courier service and such delivery is confirmed by such service, or
(iv) the third business day following the day of deposit of such notice in
registered or certified mail, postage prepaid, return receipt requested. Notices
shall be provided to the addresses (or facsimile numbers, as applicable)
specified below:
If to Debtor: TEE ONE UP, INC.
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx,
President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Secured
Party: Pacific DNS, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other addresses as are designated by notice pursuant to
this paragraph.
5
Section 5.04. General Provisions.
(a) Time of the Essence. Time is of the essence of this
Agreement, and each and all of its terms and conditions.
(b) No Waiver. No delay or omission on the part of Secured Party in
exercising any power, right or remedy hereunder shall operate as a
waiver of any such power or right nor shall any single or partial
exercise of any other power, right or remedy of Secured Party under
this Agreement, or which may be provided by law, it being understood
that any extension or indulgence at any time allowed by Secured Party
to Debtor shall be in reliance upon the understanding that such shall
not affect or prejudice the rights, powers and remedies of Secured
Party.
(c) Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of
Nevada applicable to contracts entered into and performed
therein.
(d) Jurisdiction and Venue. Debtor and Secured Party acknowledge and agree
that the only appropriate forums for any legal dispute arising under or
in connection with this Agreement, and each party hereby irrevocably
submits itself to the personal jurisdiction of, the United States
District Court for the District of Nevada and the Eighth Judicial
District Court of the State of Nevada, and the parties consent and
agree that such courts shall have sole jurisdiction over any matter
arising under or in connection with this Agreement.
(e)Costs. Debtor agrees to pay all costs and expenses incurred by Secured
Party in the enforcement of this Agreement, including but not limited
to reasonable attorneys' fees and costs.
(f) Construction. The terms and provisions of this Agreement represent the
results of negotiations between the parties, each of which are
financially sophisticated parties and each of which has been
represented by counsel of its own choosing, and none of which have
acted under any duress or compulsion, whether legal, economic or
otherwise. consequently, the terms and provisions of this Agreement
shall be interpreted and construed in accordance with their usual and
customary meanings, and each party hereto waives the application of
any rule of law which would otherwise be applicable in connection with
the interpretation and construction of this Agreement that ambiguous
or conflicting terms or provisions contained in this Agreement shall
be interpreted or construed against the party whose attorney prepared
the executed Agreement or any earlier draft of the same.
(g) Headings. Any headings preceding the text of the several paragraphs
hereof are inserted solely for convenience of reference and shall n to
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
(h) Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute but one and the same instrument.
(i) Amendment; Waiver; Entire Agreement. No change or modification of this
Agreement shall be valid unless the same is in writing and signed by
the parties hereto. No waiver of any of the provisions of this
Agreement shall be valid unless in writing and signed by the party
against whom it is sought to be enforced. This Agreement contains the
entire agreement between the parties relating to the subject matter
hereof, and there are no promises, agreements, conditions,
undertakings, warranties or representations, oral or written, express
or implied, between the parties relating to the subject matter hereof
other than as herein set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized representatives as of the date
and year first above written.
DEBTOR: TEE ONE UP, INC.,
a Nevada corporation
By: \s\ Xxxxxxx Xxxxxx
-----------------------
Name:_Herminio Llevat
Title: Chief Financial Officer
SECURED PARTY: Pacific D.N.S. Inc.,
a Nevada corporation
By: \s\ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
Title:Chairman
11
SCHEDULE I
LIST OF EXISTING CONTRACTS
Existing agreements between Tee One Up, Inc. and the following:
1. MARRIOTT INTERNATIONAL, INC. as agent for Marriott Hotel
Properties Limited Partnership, d/b/a Marriott's Orlando
World Center.
2. MARRIOTT INTERNATIONAL INC. as agent for Hotel Properties
Limited Partnership, d/b/a Xxx-Xxx-X Xxxxxx, Xxxxx Xxxx XX, Xxxxx
Xxxxx, Xxxxxxxx 00000.
3. Marriott Golf d/b/a Chardonnay Golf Club, 0000 Xxxxxxx
Xxxxxx Xxxx, X.X. Xxx 0000, Xxxx Xxxxxxxxxx 00000.
4. MARRIOTT INTERNATIONAL, INC., as agent for Marriott Hotel Properties
Limited Partnership, d/b/a Xxxxxxx Gate Resort, 0000 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000.
5. Golf Club at Wind Watch, 0000 Xxxxxxxxxx Xxxxx Xxxxxxx,
Xxxxxxxxx, XX 00000.
