EXHIBIT 10.1
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "AGREEMENT") dated DECEMBER 15, 2004, is made by and
between SIGNATURE EYEWEAR, INC., a California corporation ("BORROWER"), whose
address is 000 X. Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and EAGLE STAR
FINANCE LIMITED ("LENDER"), whose address is P. O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands.
AGREEMENT
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED
HEREIN, AND SUBJECT TO THE TERMS OF THIS AGREEMENT AND THE NOTE, Lender and
Borrower hereby agree as follows:
1. Loan. Lender herby agrees to lend to Borrower, and Borrower hereby agrees to
borrow from Lender, the principle amount of THREE HUNDRED AND FIFTY THOUSAND
DOLLARS ($350,000.00) (the "LOAN") on the terms and conditions set forth below.
2. Note. The Loans shall be evidenced by Borrower's execution and delivery to
Lender of a promissory note (such note, as may be amended, renewed or extended
from time to time, with prior written approval of Lender (the "NOTE") in
substantially the form attached hereto as Exhibit A. The Note shall (i) bear
interest at a rate of three percent (3%) net of any tax deduction per annum,
(ii) be due and payable by 5 installments of FIFTY THOUSAND DOLLARS ($50,000.00)
and 1 installment of $100,000 commencing in May, 2005 and ending in November,
2005 and (iii) provide for the payment of all accrued interest on November 27,
2005.
3. Notices. Any notice required to be given to any party pursuant to any
provision of this Agreement shall be in writing and sufficient if delivered
personally or sent by telecopier, and nationally recognized overnight courier
addressed as follows:
(a) If to Borrower:
Signature Eyewear, Inc.
000 X. Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxxxx Xxxxxx (CEO)
Fax Number. : 000-000-0000
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(b) If to Lender:
Eagle Star Finance Limited
P.O. Box 957
Offshore Incorporations Centre
Road Town, Tortola
British Virgin Islands
Any party may change its address for the giving of notice hereunder by notice so
given.
4. Governing Law. This Agreement and the Note shall be governed by and construed
in accordance with the laws of the State of California (without regard to
conflicts of law principles) and the laws of the United States applicable to
transactions within such state.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as the day and year first set forth above.
LENDER:
EAGLE STAR FINANCE LIMITED
_______________________
BORROWER:
SIGNATURE EYEWEAR, INC.
By:
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Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
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PROMISSORY NOTE
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US $350,000.00 DECEMBER 15, 2004
FOR VALUE RECEIVED, SIGNATURE EYEWEAR INC., a California corporation, located at
000 X. Xxx Xxxxxx, Xxxxxxxxx, XX 00000 ("BORROWER") hereby promises to pay to
the order of EAGLE STAR FINANCE LIMITED, a British Virgin Islands corporation
(together with any and all of its successors and assigns and/or any other holder
of this Note, "LENDER"), without offset, in immediately available funds in
lawful money of the United States of America (at P. O. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands), the
principal sum of Three Hundred and Fifty Thousand DOLLARS ($350,000.00),
together with interest on the unpaid principal balance of this Note from day to
day outstanding as hereinafter provided.
1. Definitions. In addition to other terms defined herein, as used herein the
following terms shall have the meanings indicated, unless the context
otherwise requires:
"Indebtedness" means any and all of the indebtedness to Lender evidenced,
governed or secured by or arising under the Loan Document.
"Laws" means all constitutions, treaties, statutes, laws, ordinances,
regulations, rules, orders, writs, injunctions, or decrees of the United
States of America, any state or commonwealth, any municipality, any
foreign country, any territory or possession, or any Tribunal.
"Loan Agreement" means the loan agreement entered into between the
Borrower and the Lender on December 15, 2004.
"Loan Document" means the Note and/or the Loan Agreement.
"Note" means this promissory note.
"Principal Debt" means the aggregate unpaid principal balance of this Note
at the time in question.
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"Rights" means rights, remedies, powers and privileges.
"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
deductions, withholdings, or other charges of any nature whatsoever from
time to time or at any time imposed by any Laws or Tribunal.
"Tax Deduction" means a deduction or withholding for or on account of
Taxes from a payment under the Loan Document.
"Tribunal" means any state, commonwealth, federal, foreign, territorial or
other court or governmental department, commission, board, bureau,
district, authority, agency, central bank, or instrumentality, or any
arbitration authority.
2. Interest Rate.
(a) The Principal Debt shall bear interest at the rate of three percent (3%)
per annum.
(b) Computations and Determinations. All interest shall be computed on the
basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day). The books and
records of Lender shall be prima facie evidence of all sums owing to
Lender from time to time under this Note, but the failure to record any
such information shall not limit or affect the obligations of Borrower
under the Loan Document.
(c) Default Rate. Any principal of, and to the extent permitted by allocable
law, any Interest on this Note, and any other sum payable hereunder, which
is not paid when due shall bear interest, from the date due and payable
until paid, payable on demand, at a rate per annum equal to fourteen
percent (14%).
3. Payment Schedule. The principal balance of this Note shall be due and
payable according to the following payment schedule:
Payment Due Date Principal Payment
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May 27, 2005 $ 50,000.00
June 27, 2005 $ 50,000.00
July 27, 2005 $ 50,000.00
August 26, 2005 $ 50,000.00
September 27, 2005 $ 50,000.00
November 29, 2005 $ 100,000.00
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The accrued interest owing on this Note shall be due and fully payable on
November 29, 2005.
Payment of principal balance and interest shall be made by the Borrower to
the Lender by wire transfer in United States Dollars to the bank account
designated by the Lender from time to time.
4. Tax gross-up.
(a) The Borrower must make all payments to be made by it under the Loan
Document without any Tax Deduction, unless a Tax Deduction is required by
law.
(b) If Borrower is aware that the Borrower it must make a Tax Deduction (or
that there is a change in the rate or the basis of a Tax Deduction), it
must notify the Lender promptly.
(c) If a Tax Deduction is required by law to be made by the Borrower, the
amount of the interest payment due from the Borrower will be increased to
an amount which (after making the Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been
required.
(d) If the Borrower is required to make a Tax Deduction, it must make the
minimum Tax Deduction allowed by law and must make any payment required in
connection with that Tax Deduction within the time allowed by law.
(e) Within 30 days of making either a Tax Deduction or a payment required in
connection with a Tax Deduction, the Borrower must deliver to the Lender
evidence satisfactory to the Lender (acting reasonably) that the Tax
Deduction has been made or (as applicable) the appropriate payment has
been paid to the relevant taxing authority.
(f) The Borrower must indemnify the Lender against any loss or liability which
the Lender (in its absolute discretion) determines will or has been
suffered (directly or indirectly) by it for or on account of Taxes in
relation to a payment received or receivable (or any payment deemed to be
received or receivable) under the Loan Document.
5. Prepayment. Borrower may prepay the principal balance of this Note, in
full at any time or in part from time to time, without penalty.
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6. Late Charges. If Borrower shall fail to make any payment under the terms
of this Note within ten (10) days after the date such payment is due,
Borrower shall pay to Lender on demand a late charge equal to four percent
(4%) of such payment. Such ten (10) day period shall not be construed as
in any way extending the due date of any payment. The "late charge" is not
be construed as in any way extending the due date of any payment. The
"late charge" is imposed for the purpose of defraying the expenses of
Lender incident to handling such delinquent payment. This charge shall be
in addition to, and not in lieu of, any other remedy Lender may have and
is in addition to any fees and charges of any agents or attorneys which
Lender may employ upon the occurrence of a Default (hereinafter defined)
hereunder, whether authorized herein or by law.
7. Certain Provisions Regarding Payments. All payments made as scheduled on
this Note shall be applied, to the extent thereof, to late charges, to
accrued but unpaid interest, unpaid principal, and any other sums due and
unpaid to Lender under the Loan Document. All permitted prepayments on
this Note shall be applied, to the extent thereof, to accrued but unpaid
interest on the amount prepaid, to the remaining principal installments,
and any other sums due and unpaid to Lender under the Loan Document.
Acceptance by the Lender of any payment in an amount less than the amount
then due on any Indebtedness shall be deemed an acceptance on account
only, notwithstanding any notation on or accompanying such partial payment
to the contrary, and shall not in any way excuse the existence of an
Default.
8. Defaults
(a) It shall be a default ("Default") under the Loan Document if (i) any
principal, interest or other amount of money due under this Note is not
paid in full when due, in accordance with the terms and conditions of the
Loan Agreement, regardless of how such amount may have become due; (ii)
any covenant, agreement, condition, representation or warranty herein is
not fully and timely performed, observed or kept; or (iii) there shall
occur any default or event of default under the Loan Document, which is
not cured pursuant to the terms and provisions therein. Upon the
occurrence of a Default, Lender shall have any and all rights and remedies
set forth in the Loan Agreement, including without limitation the right
(A) to declare in accordance with the Loan Agreement the unpaid principal
balance and accrued but unpaid interest on this Note, and all other
amounts due hereunder and under the Loan Document, at once due and payable
(upon such declaration, the same shall be at once due and payable), (B) to
foreclose any liens and security interests securing payment thereof and
(C) to exercise any of its other rights, powers and remedies under the
Loan Document, or at law or in equity.
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(b) All of Rights of Lender provided for in the Loan Document are cumulative
of each other and of any and all other Rights at law or in equity. The
resort to any Right shall not prevent the concurrent or subsequent
employment of any other appropriate Right. No single or partial exercise
of any Right shall exhaust it, or preclude any other or further exercise
thereof, and every Right may be exercised, subject to the terms of the
Subordination Agreement, at any time and from time to time. No failure by
Lender to exercise, nor delay in exercising any Right, including but not
limited to the right to accelerate the maturity of this Note, shall be
construed as a waiver of any Default or as a waiver of any Right. Without
limiting the generality of the foregoing provisions, the acceptance by
Lender from time to time of any payment under this Note which is past due
or which is less than the payment in full of all amounts due and payable
at the time of such payment, shall not (i) constitute a waiver of or
impair or extinguish the right of Lender to accelerate the maturity of
this Note or, to exercise any other Right at the time or at any subsequent
time, or nullify any prior exercise of any such Right, or (ii) constitute
a waiver of the requirement of punctual payment and performance or a
novation in any respect.
(c) If any holder of this Note retains an attorney in connection with any
Default or at maturity of this Note or to collect, enforce or defend the
Loan Document in any lawsuit or in any probate, reorganization,
bankruptcy, arbitration or other proceeding, or if Borrower sues any
holder in connection with the Loan Document and does not prevail, then
Borrower agrees to pay to each such holder, in addition to principal,
interest and any other sums owing to Lender hereunder and under the Loan
Document, all costs and expenses incurred by such holder in trying to
collect this Note or in any such suit or proceeding, including, without
limitation, attorneys' fees and expenses, investigation cost and all court
costs, whether or not suit is filed hereon, whether before or after the
payment due dates as provided in Section 1, or whether in connection with
bankruptcy, insolvency or appeal, or whether collection is made against
Borrower or any guarantor or endorser or any other person primarily or
secondarily liable hereunder.
9. Commercial Purpose. Borrower warrants that the Loan is being made solely
to acquire or carry on a business or commercial enterprise, and/or
Borrower is a business or commercial organization. Borrower further
warrants that all of the proceeds of this Note shall be used for
commercial purposes and stipulates that the Loan shall be construed for
all purposes as a commercial loan, and is made for other than personal,
family, household or agricultural purposes.
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10. WAIVER OF JURY TRIAL. BORROWER WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES, ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY PERTAINING TO LOAN DOCUMENT. IT IS AGREED
AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF
ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING
CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE. THIS WAIVER IS
KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER, AND BORROWER HEREBY
REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY
ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY
MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS AND WARRANTS
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO
BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL,
AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
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11. Reservations of Rights. Nothing in this Note shall be deemed to (a) limit
the applicability of any otherwise applicable statutes of limitation or
repose and any waivers contained in this Note; or (b) be a waiver by
Lender of the protection afforded to it by 12 U.S.C. Sec. 91 or any
substantially equivalent state law; or (c) limit the right of Lender, (i)
to exercise self help remedies such as (but not limited to) setoff, or
(ii) to foreclose against any real or personal property collateral, or
(iii) to obtain from a court provisional or ancillary remedies such as
(but not limited to) injunctive relief or the appointment of a receiver.
Neither the exercise of self help remedies nor the institution or
maintenance of an action for foreclosure or provisional or ancillary
remedies shall constitute a waiver of the right of any party, including
the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
12. Heirs, Successors and Assigns. The terms of the Loan Document shall bind
and inure to the benefit of the heirs, devisees, representatives,
successors and assigns of the parties. The foregoing sentence shall not be
construed to permit Borrower to assign the Loan. As further provided in
the Loan Agreement, Lender may, at any time, sell, transfer, or assign the
Loan Document, and any or all servicing rights with respect thereto, or
grant participations therein.
13. General Provisions. Time is of the essence with respect to Borrower's
obligations under this Note. If more than one person or entity executes
this Note as Borrower, all of said parties shall be jointly and severally
liable for payment of the indebtedness evidenced hereby. Borrower, its
successors, assigns and any other party now or hereafter liable for the
payment of this Note in whole or in part, hereby severally (a) waive
demand, presentment for payment, notice of dishonor and of nonpayment,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration and all other notices (except any notices which are
specifically required by the Loan Document), filling of suit and diligence
in collecting this Note or enforcing any of the security herefor; (b)
agree to any substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily liable
hereon; (c) agree that Lender shall not be required first to institute
suit or exhaust its remedies hereon against Borrower or others liable or
to become liable hereon or to perfect or enforce its rights against them
or any security herefor; (d) consent to any extensions or postponements of
time of payment of this Note for any period or periods of time and to any
partial payments, before or after maturity, and to any other indulgences
with respect hereto, without notice thereof to any of them; and (e) submit
(and waive all rights to object) to non-exclusive personal jurisdiction of
any state or federal court sitting in the State of California, and venue
in the city or county in which
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payment is to be made as specified in Section 1 of this Note, for the
enforcement of any and all obligations under this Note and the Loan
Documents; (f) waive the benefit of all homestead and similar exemptions
as to this Note; (g) agree that their liability under this Note shall not
be affected or impaired by any determination that any security interest or
lien taken by Lender to secure this Note is invalid or unperfected; and
(h) hereby subordinate any and all rights against Borrower and any of the
security for the payment of this Note, whether by subrogation, agreement
or otherwise, until this Note is paid in full. A determination that any
provision of this Note is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination
that the application of any provision of this Note to any person or
circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to other
persons or circumstances. This Note may not be amended except in a writing
specifically intended for such purpose and executed by the Lender and, if
other than Lender, the party against whom enforcement of the amendment is
sought. The Lender is hereby authorized to disseminate any information it
now has or hereafter obtains pertaining to the Loan Document, including,
without limitation, any security for this Note and credit or other
information on Borrower, any of its principals and any guarantor of this
Note, to any actual or prospective assignee or participant with respect to
the Loan. Captions and headings in this Note are for convenience only and
shall be disregarded in construing it. THIS NOTE, AND ITS VALIDITY,
ENFORCEMENT AND INTERPRETAION, SHALL BE GOVERNED BY CALIFORNIA LAW
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED
STATES FEDERAL LAW.
14. Notices. Any notice, request, or demand to or upon Borrower or Lender
shall be deemed to have been properly given or made when delivered in
accordance with Section 3 of the Loan Agreement.
15. No Usury. It is expressly stipulated and agreed to be the intent of
Borrower and Lender at all times to comply with applicable state law or
applicable United States federal law (to the extent that it permits Lender
to contract for, charge, take, reserve, or receive a greater amount of
interest than under state law) and that this Section shall control every
other covenant and agreement in the Loan Document. If applicable state or
federal law should at any time be judicially interpreted so as to render
usurious any amount called for under this Note or under the Loan Document,
or contracted for, charged, taken, reserved, or received with respect to
the Loan, or if Lender's exercise of the option to accelerate the payment
due dates provided in Section 1, or if any prepayment by Borrower results
in Borrower having paid any interesting in excess of that permitted by
applicable law, then it
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is Lender's express intent that all excess amounts theretofore collected
by Lender shall be credited on the principal balance of this Note and all
other indebtedness and the provisions of the Loan Document shall
immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution
of any new documents, so as to comply with the applicable law, but so as
to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid or agreed to be paid to Lender for
the use, forbearance, or detention of the Loan shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
maximum lawful rate from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its duly authorized representatives as of the date set
first forth above.
BORROWER
SIGNATURE EYEWEAR, INC.
a California corporation
By
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Name : Xxxxxxx Xxxxxx
Title : Chief Executive Officer
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