EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT (hereinafter referred to as the "Agreement"), is
made effective as of the May 2, 2004, by and among SILVERADO FINANCIAL INC., a
Nevada corporation (hereinafter referred to as "Silverado"), having its
principal address at 0000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, and
XXXXXXXXXXX.XXX, INC., and Xxxxxxx and Mike's Calabasas Realty, Inc., DBA
Xxxxxxxxxxx.xxx and DBA Lendingtech, California corporations (hereinafter
referred to as "LENDINGTECH"), having its principal address at 00000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxxxxx 00000, and Xxxxxxx Xxxxxxxx, the sole
shareholder of LENDINGTECH; hereinafter referred to collectively as "THE
PARTIES".
RECITALS
WHEREAS, SILVERADO is desirous of purchasing all of the issued and outstanding
shares of the Common Stock of LENDINGTECH in exchange for FIVE HUNDRED TWENTY
THOUSAND and no/100ths Dollars ($520,000.00) to be paid as follows:
a. Purchase Price Breakdown:
$200,000 15% Promissory Note
$144,000 8% Promissory Note
$176,000 5% Convertible Promissory Note
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$520,000 Purchase Price
NOW, THEREFORE, in consideration of the following mutual promises, payments,
exchanges, credits, covenants, restrictions, agreements and other valuable
considerations, the receipt and sufficiency of which shall be acknowledged by
each party upon execution hereof, the parties, with full intent to be legally
bound, hereby agree as follows:
Conversion of Securities; Exchange of Certificates
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Closing. Subject to the provisions of this Agreement, the closing (the
"Closing") of the transaction contemplated by this Agreement shall take place at
the offices of SILVERADO FINANCIAL INC. located at 0000 X. Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, XX 00000, on or before May 2, 2004, or at such other time or
place and/or date as the parties hereto may mutually agree. Provided, however,
that if a condition to Closing shall not have been fulfilled or waived at such
time, any party hereto entitled to the benefits of such condition may postpone
the Closing by notice to the other parties until such condition or conditions
shall have been met or waived, except that in no event shall the Closing occur
after May 5, 2004 without the written agreement of all parties hereto.
Exchange of Capital Stock. At the Closing, the sole shareholder of
LENDINGTECH, Xxxxxxx Xxxxxxxx shall exchange all of the shares of
LENDINGTECH Common Stock issued and outstanding as of the Closing for,
Two Hundred Thousand Dollars ($200,000.00) by means of two (2) 15%
Promissory Notes, made payable to and in the amounts listed in Section 1.01
(a) (i) (a) and (b), which shall be collateralized by 2,000,000 restricted
shares of Silverado. Silverado can redeem this Promissory Note anytime
without penalty by paying the unpaid principal and accrued interest as of
such prepayment date. Payments will be made monthly and be fully amortized
1
Conversion of Securities; Exchange of Certificates - continued
at 15% interest per annum over a term of 20 months, according to the
schedule in attached Schedule A. In the event of any default in payment
which is not cured within 30 days after receipt of written Notice,
Silverado will agree to release an appropriate number of shares from the
escrow account representing the dollar amount of interest and principal
which is past due. Any such release of such collateral shall be in lieu of
the principal and interest that was past due. Default is defined as
non-payment of the prescribed monthly payments, not cured within 30 days of
Silverado's receipt of the written Notice of Default, which shall be
delivered upon Silverado being greater than 7 days late in any payment.
One Hundred Eighty Thousand and no/100th Dollars ($180,000.00) Promissory
note payable to Xxxxxxx Xxxxxxxx (seller).
Twenty Thousand and no/100th Dollars ($20,000.00) Promissory note payable
to Xxxxxxx Xxxxxxxxx.
One Hundred Forty-Four Thousand Dollars ($144,000.00) by means of an 8%
Promissory Note payable to the Seller, Xxxxxxx Xxxxxxxx, which shall be
collateralized by the same 2,000,000 restricted shares of Silverado as set
forth in (i) above. Silverado can redeem this Promissory Note anytime
without penalty by paying the unpaid principal and accrued interest as of
such prepayment date. This Promissory Note will pay quarterly
non-amortizing interest of 8% per annum, due in full 3 years from the first
interest payment to Seller. Payments will begin on the nearest upcoming
quarterly payment date after the Closing, as per the following schedule
with no pro-rations: 1st Quarter payment date March 26, 2nd Quarter payment
date June 25, 3rd Quarter payment date September 25 and 4th Quarter payment
date December 31. In the event of any default, which is not cured within 30
days after the receipt of written notice, Silverado will agree to release
an appropriate number of shares from the escrow account representing the
dollar amount of interest and principal which is past due. Any such release
of such collateral shall be in lieu of the principal and interest that was
past due. Default is defined as the non-payment of prescribed Quarterly
interest or balloon payment, not cured within 30 days of the written Notice
of Default, which shall be delivered upon Silverado being greater than 7
days late in any payment. This Promissory Note will be retired on or before
the end of the 3-year term, and any remaining principal and interest due at
the end of the 3-year term shall be retired through a balloon payment to
Xxxxxxx Xxxxxxxx.
5% Convertible Promissory Note - One Hundred Seventy-Six Thousand Dollars
($176,000.00) by means of a 5% Convertible Promissory Note in (2) tranches
made payable to the following parties in (a) and (b). This 5% Convertible
Promissory Note shall be collateralized by the same 2,000,000 restricted
shares of Silverado set forth in (i) above. Silverado can redeem this
Promissory Note anytime without penalty by paying the unpaid principal and
accrued interest as of such prepayment date. This Promissory Note will pay
quarterly non-amortizing interest of 5% per annum on the principal amount
of 5% Convertible Promissory Note that has not been converted into
Silverado common stock. Payments will begin on the nearest upcoming
quarterly payment date after the Closing, as per the following schedule:
1st Quarter payment date March 26, 2nd Quarter payment date June 25, 3rd
Quarter payment date September 25 and 4th Quarter payment date December 31.
In the event of any default, which is not cured within 30 days after the
receipt of written notice, Silverado will agree to release an appropriate
number of shares from the escrow account representing the dollar amount of
interest and principal which is past due. Any such release of such
2
Conversion of Securities; Exchange of Certificates - continued
collateral shall be in lieu of the principal and interest that was past
due. Default is defined as the non-payment of prescribed Quarterly interest
or balloon payment, not cured within 30 days after receipt of the written
Notice of Default, which shall be delivered upon Silverado being greater
than 7 days late in any payment. This Promissory Note can be converted into
Common Stock at the option of holder at the greater of the average share
closing price during the five trading days prior to conversion or $.35 per
share. This Convertible Note will automatically adjust appropriately to any
forward or reverse stock splits to reflect the same ownership percentage as
previous to the split.
One Hundred Forty-Four Thousand and no/100th Dollars ($144,000.00) 5%
Convertible Promissory Note payable to Xxxxxxx Xxxxxxxx (seller).
Thirty-Two Thousand and no/100th Dollars ($32,000.00) 5% Convertible
Promissory Note payable to Xxxxxxx Xxxxxxxxx.
Assets Buyer Shall Receive - At Closing Buyer shall receive all assets less
the assets mentioned in 1.01 (c) below.
Assets Seller Shall Retain - The Seller(s) shall retain the following
assets as part of the Consideration:
i. 1-Ricoh copy machine Model #7650
ii. 10-Desktop PC's with monitor and keyboard Etc.
iii. 2-HP Printers
iv. 1-Brother all-in-one laser printer/fax/copier
v. 1-Panasonic Telephone System-40 port/16line/24 extension/11
handsets
vi. 9-Workstations with chairs
vii. 1-Conference table with 4 chairs
viii. 1-Executve Desk/file cabinet/credenza/chair
ix. 2-Cubical workstations
x. 1-File storage cabinet
xi. Various computer software relating to real estate sales
business: MS Office, Winforms 2000 Realtors Software,
Crisnet 4.5 MLS, HP Photo Imaging, Adobe Photoshop 7.0, CMA
Pro, Mail Loop.
Representations and Warranties of LENDINGTECH.
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LENDINGTECH and the selling shareholders: Xxxxxxx Xxxxxxxx represent and warrant
to SILVERADO as follows:
Organization, Standing and Power; Qualification.
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LENDINGTECH is a corporation duly organized, validly existing and in good
standing under the laws of the State of California; has all requisite corporate
power to own, lease and operate its properties and to carry on its business as
currently being conducted and as currently proposed to be conducted; is duly
qualified to do business and is in good standing in each jurisdiction in which
the failure to be so qualified and in good standing would have a material
adverse effect on its business, assets (including intangible assets),
properties, liabilities (contingent or otherwise), financial condition,
operations, or results of operation (a "Material Adverse Effect") of
LENDINGTECH.
3
LENDINGTECH Capital Structure.
------------------------------
All outstanding shares of LENDINGTECH Stock have been duly authorized and
validly issued, are fully paid and non-assessable, were issued in compliance
with state and federal securities laws, and are subject to no preemptive rights
or rights of first refusal created by statute, the Articles of Incorporation or
Bylaws of LENDINGTECH or any agreement to which LENDINGTECH and/or Xxxxxxx
Xxxxxxxx is a party or by which it and/or he is bound. The authorized capital
stock of LENDINGTECH as of March 1, 2004 consists of 1,000,000 shares of
LENDINGTECH Common Stock, of which 50,000 are issued and outstanding to the sole
shareholder, Xxxxxxx Xxxxxxxx
XXXXXXX AND MIKE'S CALABASAS REALTY Capital Structure.
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All outstanding shares of XXXXXXX AND MIKE'S CALABASAS REALTY Stock have been
duly authorized and validly issued, are fully paid and non-assessable, were
issued in compliance with state and federal securities laws, and are subject to
no preemptive rights or rights of first refusal created by statute, the Articles
of Incorporation or Bylaws of XXXXXXX AND MIKE'S CALABASAS REALTY or any
agreement to which XXXXXXX AND MIKE'S CALABASAS REALTY and/or Xxxxxxx Xxxxxxxx
is a party or by which it and/or he is bound. The authorized capital stock of
XXXXXXX AND MIKE'S CALABASAS REALTY as of March 1, 2004 consists of 100,000
shares of XXXXXXX AND MIKE'S CALABASAS REALTY Common Stock, of which 1,000 are
issued and outstanding to the sole shareholder, Xxxxxxx Xxxxxxxx.
No Conflicts.
--------------
Neither the execution and delivery of this Agreement by LENDINGTECH and/or
Xxxxxxx Xxxxxxxx, the performance by LENDINGTECH and/or Xxxxxxx Xxxxxxxx of its
obligations hereunder, the execution and delivery by LENDINGTECH and/or Xxxxxxx
Xxxxxxxx of any agreement required to be entered into pursuant to this
Agreement, nor the consummation of the transactions contemplated hereby, will
result in any of the following: (a) a default or an event that, with notice or
lapse of time, or both, would constitute a default, breach or violation of (i)
any provision of the Articles of Incorporation or Bylaws of LENDINGTECH, or (ii)
any of the terms, conditions or provisions of any lease, license, franchise,
promissory note, contract, agreement, commitment, indenture, mortgage, deed of
trust, or other instrument, document or arrangement to which LENDINGTECH and/or
Xxxxxxx Xxxxxxxx is a party or by which it and/or Xxxxxxx Xxxxxxxx or any of its
and/or his respective properties or assets may be bound and which is material to
LENDINGTECH (a "Material Contract"); (b) the creation or imposition of any Lien
on any of the assets or properties of LENDINGTECH; (c) the termination of any
Material Contract or the acceleration of the maturity of any indebtedness or
other material obligation of LENDINGTECH; (d) a violation or breach of any
order, writ, injunction, decree, law, statute or regulation of any court or
governmental authority applicable to LENDINGTECH and/or Xxxxxxx Xxxxxxxx or any
of its and/or his respective properties or assets; or (e) the cessation or
termination of any other business relationship or arrangement between
LENDINGTECH and any third party, the cessation or termination of which would
have a Material Adverse Effect on LENDINGTECH.
No Consent.
-----------
No consent, approval, order or authorization of, or registration, declaration or
filing with, any person or entity or any court, administrative agency or
commission or other governmental authority or instrumentality is required by or
with respect to LENDINGTECH and/or Xxxxxxx Xxxxxxxx in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
4
Leases and Rental Agreements.
-----------------------------
Lendingtech is not a party to any leases.
Financial Information.
-----------------------
LENDINGTECH has furnished un-audited year-ending income and balance statements
for years: 2002, 2003 and 2004 year-to-date income and balance statements as
attached, of LENDINGTECH and any subsidiaries (if applicable) through May 1,
2004. All the financial information furnished by LENDINGTECH and/or Xxxxxxx
Xxxxxxxx attached hereto in Schedule K, is complete, accurate and does not omit
any information, which would be required to accurately describe results of
operations and financial condition of LENDINGTECH for the last two fiscal years
and 2004 to year-to-date. If in the event SILVERADO's auditor is unable to
perform a complete audit of LENDINGTECH, this Agreement will have to be extended
until an audit is completed.
Taxes.
------
Any property, real estate, income, payroll or other taxes which have been
assessed against LENDINGTECH or its assets or subsidiaries have been paid in
full through the date of the last required payment, and LENDINGTECH has
disclosed in writing to SILVERADO all of such taxes applicable.
All California Franchise Tax for both Xxxxxxxxxxx.xxx and Xxxxxxx and
Mike's Calabasas Realty are paid. There is no money due as of April
30, 2004, see attached Schedule M for Franchise Tax Board memorandums.
Insurance.
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LENDINGTECH has disclosed in writing to SILVERADO all insurance coverage
covering the business affairs, assets, liabilities or other obligations;
completion of the transaction contemplated by this Agreement shall not adversely
affect the existence or coverage of such insurance.
Licenses and Permits / Compliance with Laws.
--------------------------------------------
Each of the material licenses and permits necessary for the operation of
LENDINGTECH'S business is in full force and effect, and there are no pending or
threatened claims or proceedings challenging the validity of, or seeking to
revoke or discontinue, any of the material licenses and permits. The transaction
contemplated by this Agreement will not affect the validity of, or cause the
revocation or discontinuation of any of, the material licenses and permits.
Litigation.
-----------
Except as set forth below in section (a), there is no pending or threatened,
action, suit, arbitration proceeding, charge, complaint, allegation,
investigation, inquiry or other proceeding or claim before any court or
governmental or administrative body or agency or other entity against, relating
to or affecting LENDINGTECH or any director, shareholder, officer, agent or
employee of LENDINGTECH in its, his or her capacity as such, or the assets,
properties or business of LENDINGTECH or the transaction contemplated by this
Agreement, nor is LENDINGTECH nor Xxxxxxx Xxxxxxxx aware of any facts or
circumstances which could reasonably lead to, or provide the basis for, any such
action, suit, arbitration proceeding, investigation or inquiry that, if brought
or adversely determined against LENDINGTECH could reasonably be expected to have
a Material Adverse Effect upon LENDINGTECH.
Lendingtech has a small claims judgment due in the amount of $2,546.50 to
Xxxx Xxxxxx, which will be paid by Xxxxxxx Xxxxxxxx upon her demand.
5
At the Closing.
---------------
LENDINGTECH Shall be the Sole and Unencumbered Owner of All of Its Assets
Utilized by It in its Mortgage Brokerage Business. Except as set forth in
Section 1.01 (b), Lendingtech shall be the sole and unencumbered owner of all of
its assets utilized by it in its mortgage brokerage business, including, but not
limited to, all of its proprietary and confidential information, such as
customer lists, lender lists, private investor lists, contract personnel lists,
appraiser lists, contracts with employees and independent contractors, website
domain hosting(s) list, website(s) user names and passwords, contact information
for transferring website(s) to Silverado, a complete and functional software and
related applications involved in the running of the various web-based businesses
owned and operated by LENDINGTECH, and additionally, all program coding and
indexing thereof relating to all web-based properties owned and operated by
LENDINGTECH.
Disclosure.
-----------
None of the representations or warranties of LENDINGTECH and/or the selling
shareholder, Xxxxxxx Xxxxxxxx, contained in this Agreement or any documents
delivered in connection with the transaction contemplated hereby, or in any
certificate furnished or to be furnished pursuant hereto, contains any statement
of a material fact that was untrue when made or omits to state any material fact
necessary to make the statements of fact contained herein or therein not
misleading in any material respect.
Survival of Representations and Warranties.
-------------------------------------------
All of the above Representations and Warranties shall survive the closing of the
transaction.
Representations and Warranties of Silverado.
--------------------------------------------
SILVERADO, hereby represents and warrants to LENDINGTECH as follows:
Organization, Standing and Power; Qualification.
------------------------------------------------
Silverado is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada; has all requisite corporate power to own,
lease and operate its properties and to carry on its business as currently being
conducted and as currently proposed to be conducted; is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified and in good standing would have a material adverse effect on its
business, assets (including intangible assets), properties, liabilities
(contingent or otherwise), financial condition, operations, or results of
operation (a "Material Adverse Effect") of Silverado.
SILVERADO Capital Structure.
The authorized capital stock of Silverado consists of 20,000,000 shares of
Silverado Stock, $0.001 par value, of which, Silverado may issue up to
1,000,000 shares as Preferred Stock, in such classes and with such rights
as the board of directors may determine. As of December 31, 2004 there
were:
(1) 14,839,492 shares of SILVERADO Common Stock, issued and outstanding, all of
which are duly authorized, validly issued, fully paid and non-assessable;
6
Organization, Standing and Power; Qualification.- continued
(2) No shares of SILVERADO Common Stock are held in the treasury of SILVERADO
or by Subsidiaries of SILVERADO;
(3) As of the date of this Agreement, none of the shares of SILVERADO Preferred
Stock are issued and outstanding, and;
(4) As of the date of this Agreement there are outstanding notes in the amount
of $36,000.00 due on, or about, October 31, 2004. These notes may be
converted into the Common Stock of SILVERADO at the option of the holders
or of SILVERADO at a conversion factor of one share for each Forty Cents
($0.40) of debt and unpaid interest outstanding at the time of conversion
together with one warrant to purchase one share of SILVERADO Common Stock
per share of SILVERADO Common Stock issued in conversion of unpaid debt and
interest with an exercise price of Forty Cents ($0.40) per share. These
warrants expire no later than October 31, 2005.
Except as set forth in Section 3.02(a), there are
(5) No equity securities of any class of SILVERADO, or any security
exchangeable into or exercisable for such equity securities, issued,
reserved for issuance or outstanding and;
(6) No options, warrants, equity securities, calls, rights, commitments or
agreements of any character to which SILVERADO is a party or by which it is
bound obligating SILVERADO to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock of SILVERADO
or obligating SILVERADO to grant, extend, accelerate the vesting of or
enter into any such option, warrant, equity security, call, right,
commitment or agreement.
No Conflicts.
-------------
Neither the execution and delivery of this Agreement by SILVERADO, the
performance by SILVERADO of its obligations hereunder, the execution and
delivery by SILVERADO of any agreement required to be entered into pursuant to
this Agreement, nor the consummation of the transactions contemplated hereby,
will result in any of the following: (a) a default or an event that, with notice
or lapse of time, or both, would constitute a default, breach or violation of
(i) any provision of the Articles of Incorporation or Bylaws of SILVERADO, or
(ii) any of the terms, conditions or provisions of any lease, license,
franchise, promissory note, contract, agreement, commitment, indenture,
mortgage, deed of trust, or other instrument, document or arrangement to which
SILVERADO is a party or by which it or any of its respective properties or
assets may be bound and which is material to SILVERADO (a "Material Contract");
(b) the creation or imposition of any Lien on any of the assets or properties of
SILVERADO; (c) the termination of any Material Contract or the acceleration of
the maturity of any indebtedness or other material obligation of SILVERADO; (d)
a violation or breach of any order, writ, injunction, decree, law, statute or
regulation of any court or governmental authority applicable to SILVERADO or any
of its respective properties or assets; or (e) the cessation or termination of
any other business relationship or arrangement between SILVERADO and any third
party, the cessation or termination of which would have a Material Adverse
Effect upon SILVERADO.
7
No Consent.
----------
No consent, approval, order or authorization of, or registration, declaration or
filing with, any person or entity or any court, administrative agency or
commission or other governmental authority or instrumentality is required by or
with respect to SILVERADO in connection with the execution and delivery of this
Agreement or the consummation of the transaction contemplated hereby.
Public Reporting Entity.
-------------------------
SILVERADO is, and has been since 2000, a public reporting corporation, which
files annual reports an Form 10-KSB, quarterly reports on Form 10-QSB and
current reports on Form 8-K under the Securities and Exchange Act of 1934, as
amended. SILVERADO has delivered or made available its most recent Quarterly
Report on Form 10-QSB for the quarter ended September 31, 2003. The information
in the financial statements, including the capitalization of SILVERADO, included
in such reports is complete, accurate and in compliance with applicable
regulations.
Authorization of Shares.
------------------------
SILVERADO is authorized to issue the Shares, upon conversion of the Promissory
Note, as described in Section 1.01 (a) (iii). The Shares shall be "restricted
securities" as such term is defined in Rule 144 adopted under the Securities Act
of 1933, as amended, and may not be sold, conveyed, transferred or hypothecated
by any of the shareholders of LENDINGTECH until and unless the Shares are
registered under the Act or the sale or transfer would be exempt from
registration requirements of the Act in the reasonable determination of
SILVERADO.
Licenses and Permits; Compliance with Laws.
--------------------------------------------
Each of the material licenses and permits necessary for the operation of
SILVERADO'S business is in full force and effect, and there are no pending or
threatened claims or proceedings challenging the validity of, or seeking to
revoke or discontinue, any of the material licenses and permits. The transaction
contemplated by this Agreement will not affect the validity of, or cause the
revocation or discontinuation of any of, the material licenses and permits.
Litigation.
-----------
Except as set forth below in section (a), there is no pending or threatened,
action, suit, arbitration proceeding, charge, complaint, allegation,
investigation, inquiry or other proceeding or claim before any court or
governmental or administrative body or agency or other entity against, relating
to or affecting SILVERADO or any director, shareholder, officer, agent or
employee of SILVERADO in its, his or her capacity as such, or the assets,
properties or business of SILVERADO or the transaction contemplated by this
Agreement, nor is SILVERADO aware of any facts or circumstances which could
reasonably lead to or provide the basis for any such action, suit, arbitration
proceeding, investigation or inquiry that, if brought or adversely determined
against SILVERADO could reasonably be expected to have a Material Adverse Effect
upon SILVERADO.
None
8
Disclosure.
-----------
None of the representations or warranties of SILVERADO contained in this
Agreement or any documents delivered in connection with the transaction
contemplated hereby, or in any certificate furnished or to be furnished pursuant
hereto, contains any statement of a material fact that was untrue when made or
omits to state any material fact necessary to make the statements of fact
contained herein or therein not misleading in any material respect.
Survival of Representations and Warranties.
---------------------------------------------
All of the above Representations and Warranties shall survive the closing of the
transaction.
Obligations Pending and Following the Closing.
---------------------------------------------
Delivery of Promissory Notes and Restrictive Legend on Convertible Promissory
Note.
--------------------------------------------------------------------------------
Following the Closing and in accordance with the terms of Section 1.01 (a) (iii)
above, any Shares that the Convertible Promissory Note may be converted into
shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER, THE
TRANSFER QUALIFIES FOR AN EXEMPTION FROM OR EXEMPTION TO THE REGISTRATION
PROVISIONS THEREOF.
Conditions to LENDINGTECH'S Obligations.
-------------------------------------------
The obligations of LENDINGTECH and Xxxxxxx Xxxxxxxx to consummate the
transaction contemplated herein shall be subject to the satisfaction or waiver,
on or before the Closing Date, of each of the following conditions:
Accuracy of Representations and Warranties.
---------------------------------------------
All of the representations and warranties of Silverado contained herein shall be
true and correct as of the date when made and shall be true and correct as of
the Closing Date with the same force and effect as though such representations
and warranties were made at and as of the Closing Date.
Due Diligence.
---------------
LENDINGTECH, its officers, board of directors as a group, employees,
accountants, attorneys, representatives, advisors and/or agents shall have
completed to their satisfaction, a due diligence review, prior to closing, of
Silverado's business and financial condition.
Performance.
------------
SILVERADO shall have performed and complied with all agreements, obligations and
conditions required by this Agreement to be performed or complied with on or
prior to the Closing Date.
9
Conditions to SILVERADO'S Obligations.
----------------------------------------
The obligations of SILVERADO to consummate the transaction contemplated herein
shall be subject to the satisfaction or waiver, on or before the Closing Date,
of each of the following conditions:
Affirmative Vote of the Board of Directors of SILVERADO.
-----------------------------------------------------------
An affirmative vote of the Board of Directors of SILVERADO was held on April 2,
2004, affirming the issuance of the Promissory Notes agreed to in Section 1.01,
as well as the issuance of shares agreed to in Section 1.01 (a) (iii) that may
be issued upon conversion of the Promissory Note pursuant to such Section.
Accuracy of Representations and Warranties.
----------------------------------------------
All of the representations and warranties of LENDINGTECH and Xxxxxxx Xxxxxxxx
contained herein shall be true and correct as of the date when made and shall be
true and correct as of the Closing Date with the same force and effect as though
such representations and warranties were made at and as of the Closing.
Due Diligence.
---------------
SILVERADO, its officers, board of directors as a group, employees, accountants,
attorneys, representatives, advisors and/or agents shall have completed to their
satisfaction, a due diligence review, prior to closing, of LENDINGTECH's
business and financial condition.
Performance.
------------
LENDINGTECH shall have performed and complied with all agreements, obligations
and conditions required by this Agreement to be performed by or complied with on
or prior to the Closing Date.
Indemnification and Damages.
---------------------------
Indemnification.
----------------
Following the Closing Date, each of THE PARTIES shall indemnify, hold harmless
and defend the other parties to this Agreement from and against any and all
"Damages" (as hereinafter defined) that arise from or are in connection with:
Any material breach of, or inaccuracy in, any of the representations or
warranties of such indemnifying party contained in this Agreement or any
certificates delivered hereunder;
Any material breach or default by such indemnifying party of such party's
covenants, agreements or obligations contained in this Agreement;
Any claim, lawsuit, action or other proceeding that (i) is pending against such
indemnifying party on the Closing Date, or (ii) is brought against such
indemnifying party as a result of, or arising from, any acts or omissions
of such party that have occurred on or before the Closing Date;
10
Damages. "Damages", as used in this Section 7 shall mean: (i) demands, claims,
actions, suits, investigations and legal or other proceedings brought against
any indemnified party or parties, and any judgments or assessments, fines or
penalties rendered therein or any settlements thereof, and (ii) all liabilities,
damages, losses, taxes, assessments, costs and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and expenses) incurred
by any indemnified party or parties, to the extent not reimbursed or paid for by
insurance, whether or not they have arisen from, or were incurred in or as a
result of, any such demand, claim, action, suit, assessment or other proceeding
or any settlement or judgment.
Termination and Amendment.
-------------------------
Termination.
------------
In addition to each party's rights under applicable law, this Agreement may also
be terminated at any time prior to, or after, the Closing by written notice by
the terminating party to the other party as follows:
By mutual written consent duly authorized by the Board of Directors of
SILVERADO and LENDINGTECH and Xxxxxxx Xxxxxxxx individually;
By LENDINGTECH, if there has been a material breach of any representation,
warranty, covenant or agreement on the part of SILVERADO, which breach
shall not have been cured within ten (10) business days following receipt
by SILVERADO of written notice of such breach from LENDINGTECH and/or
Xxxxxxx Xxxxxxxx;
By SILVERADO, if there has been a material breach of any representation,
warranty, covenant or agreement on the part of LENDINGTECH and/or Xxxxxxx
Xxxxxxxx, which breach shall not have been cured within ten (10) business
days following receipt by the breaching parties of written notice of such
breach from SILVERADO.
Effect of Termination. Only in the event of termination of this Agreement as
provided in Section 8.01 (a), shall there be no liability or obligation on the
part of SILVERADO and LENDINGTECH and their respective officers, directors,
shareholders or affiliates.
Amendment.
-----------
This Agreement may not be modified or amended except by an instrument in writing
signed on behalf of each of the parties hereto.
Extension/Waiver.
----------------
At any time prior to the Closing, the parties hereto, by written action taken or
authorized by their respective Boards of Directors and Xxxxxxx Xxxxxxxx
individually may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, and/or (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
11
Miscellaneous.
-------------
Any notice, receipt, offer or other communication required or permitted
hereunder shall be sufficiently given if delivered in person, or sent by telex,
facsimile transmission or registered or certified United States Mail (postage
prepaid, return receipt requested) addressed to SILVERADO FINANCIAL INC. at its
principal office located at 0000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX
00000, or addressed to LENDINGTECH at its principal office located at 000
Xxxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, and such notice, receipt, offer
or other communication shall be deemed to have been given as of the date so
delivered, sent by telex, transmittal by facsimile, or mailed.
All section numbers and/or headings used herein are intended for convenience of
reference, and do not mean, nor should they be construed to imply, a degree of
relative importance between and among the sections hereof; each of which is
equally as important as any other. Nor should such numbers or headings affect
the interpretation or enforcement of this Agreement in any way.
In the event that any provision hereof shall be determined to be invalid, void,
unenforceable or illegal as a matter of law by a court of competent
jurisdiction, then such provision(s) shall be deemed severed from this Agreement
and treated as if never a part hereof, with all remaining sections to continue
in full force and effect. Any and all male or female pronouns, and the use of
the singular or plural form of any word shall be read as if correctly used in
the event of any particular circumstance.
This Agreement shall be interpreted and construed in accordance with the laws of
the State of California, without regard to its conflict of law rules if any.
In the event of any dispute or claim relating to or arising out of this
Agreement, and acquisition, LENDINGTECH, SILVERADO and Xxxxxxx Xxxxxxxx
individually (i) each agree that all such disputes shall be fully and finally
resolved by binding arbitration conducted by the American Arbitration
Association in Los Angeles County, California, and (ii) each waives its rights
to have such disputes tried by a court or jury. However, LENDINGTECH, SILVERADO
and Xxxxxxx Xxxxxxxx individually agree that this arbitration provision shall
not apply to any disputes or claims relating to, or arising out of, the misuse
or misappropriation of either party's: trade secrets, proprietary information,
or other proprietary rights or property.
No rules of construction are intended by the parties hereto, nor shall be
employed in the interpretation hereof. For all purposes, all parties hereto
shall be deemed joint authors hereof.
This Agreement may be executed in any number of separate counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
Any party to this Agreement may waive any right it may have hereunder or any
breach or default hereunder by any other party hereto; provided that no such
waiver will be effective against the waiving party unless it is in writing and
specifically refers to this Agreement. No waiver will be deemed to be a waiver
of any other right or any subsequent breach or default of the same or similar
nature.
This Agreement, including schedules and other documents referred to herein which
form a part hereof, embodies the entire agreement and understanding of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior or contemporaneous agreements or understandings (whether written or oral)
among the parties, in respect to the subject matter contained herein.
12
Miscellaneous.- continued
This agreement may not be modified, amended or terminated, except by written
agreement specifically referring to this Agreement signed by the parties hereto.
Xxxxxxx Xxxxxxxx may not assign this Agreement, or assign his rights or delegate
his duties hereunder, without the prior written consent of SILVERADO. Prior to
the Closing, SILVERADO may not assign this Agreement, or assign its rights or
delegate its duties hereunder, without the prior written consent of Xxxxxxx
Xxxxxxxx.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against THE PARTIES, their heirs, executors, personal
representative, successors and assigns. Each party hereto, his personal
representatives and the fiduciary of the estate of any deceased Party hereto,
should the event occur prior to the closing of this Agreement shall do all acts
and will execute, acknowledge and deliver all instruments necessary and/or
proper to make this Agreement effective.
An item shall be deemed "material" for the purposes of this Agreement if it
constitutes more than Ten Thousand Dollars ($10,000.00).
Notwithstanding anything to the contrary in this Agreement, there are no third
party beneficiaries of Silverado's obligations pursuant to this Agreement,
including, but not limited to, any current or future creditors of LENDINGTECH
and/or Xxxxxxx Xxxxxxxx; and SILVERADO does not assume any of the debts or
obligations of LENDINTECH and/or Xxxxxxx Xxxxxxxx
All parties, their representatives, appointees, employees, consultants,
representatives et..hereby agree to keep completely confidential and to not
contact for any purpose, the names of any banks, lending institutions,
corporations, organizations, individuals, entities, borrowers, buyers or
sellers, customers, contractors which would be considered Confidential and
Proprietary Information of LENDINTECH and/or any of the aforementioned entities,
but not limited to, introduced by Silverado or their associates. Such identities
and information shall remain confidential during the applicable transaction(s)
and during the duration of this Agreement and after the closing of this
transaction, such information is considered the property of Silverado and all
parties hereby agree, individually and separately, not to divulge or use, or
benefit from said information for as long as legally enforceable under
applicable law. All parties agree they will be causing damages to Silverado in
the event of a violation of this confidentiality section and hereby agree not to
circumvent each other in their dealings pertaining to this or any other
transactions with parties introduced hereto. The obligations under this Section
9.14 shall survive the Closing of this transaction.
All parties agree that the escrow for the 2,000,000 restricted shares of
Silverado common stock will be handled by Xxxxx Xxxx, Esq., who is also Buyer's
attorney.
13
Miscellaneous.- continued
Xxxxxxx Xxxxxxxx hereby agrees not to directly or indirectly compete with the
business of LENDINGTECH and its successors and assigns for a period of three (3)
years following the Closing of this transaction.
The term "not compete" as used herein shall mean Xxxxxxx Xxxxxxxx shall not
own, manage, operate, consult or to be employed in a business substantially
similar to, or competitive with, the present business of Silverado, the
past business of Xxxxxxxxxxx.xxx, Inc., or such other business activity in
which Silverado may substantially engage in over the following three (3)
years.
The parties agree that because damages for a breach of Section 9.16 may be too
difficult to determine, Buyer will be entitled to enforce any or all of
such Section by means of an Injunction.
In the event that any court should find that any portions or provisions of
Section 9.16 are too broad to be enforceable as written, the parties hereto
herby agree that such Section is hereby by deemed to be rewritten to the
maximum restrictive extent permitted by law to be enforceable.
This Agreement supercedes all other previous agreements.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year, and place, first above written.
SILVERADO FINANCIAL, INC.
A Nevada corporation
_________________________________ Date ___________________
Xxxx X. Xxxxxxx, Chairman/CEO
XXXXXXXXXXX.XXX, INC.
A California corporation
______________________________ Date ___________________
Xxxxxxx Xxxxxxxx, President
Xxxxxxx and Mike's Calabasas Realty, Inc.
A California corporation
______________________________ Date ___________________
Xxxxxxx Xxxxxxxx, President
________________________________ Date ____________________
Xxxxxxx Xxxxxxxx, Individually
14
SCHEDULE A
SILVERADO FINANCIAL, INC.
15% FIXED RATE PROMISSORY NOTE
DATE: May 2, 2004
Interest Rate: 15%
Principal Amount: $180,000.00
Silverado Financial, Inc., a Nevada corporation (the "Company"), for value
received, promises to pay to XXXXXXX XXXXXXXX (the "Holder"), the Principal
Amount set forth above together with interest thereon, at the rate of 15% per
annum, payable monthly, in accordance with Schedule B following, with the
Principal Amount hereof due in full over twenty (20) months in equal monthly
installments, subject to earlier acceleration or prepayment, on/or before
January 1, 2006. (The "Maturity Date").
If the Maturity Date, or at any other payment due date, is not a Business
Day, then payment of interest or principal may be made on the next succeeding
Business Day, with the same force and effect as if such payment were made on
such Maturity Date, or at any other payment due date, and interest shall accrue
for the period after such date. The term "Business Day" as used herein means any
day, other than a Saturday or Sunday, on which commercial banks located in
California, are not required to be or authorized to be closed.
All installments of principal and/or interest on this Note shall be paid to
the Holder, at his or her address at 000 Xxxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxx
00000, or such other location as the Holder hereof may from time to time specify
in writing or to such other place as may be designated in writing by the Holder.
Upon the election of the Company, the Note is subject to prepayment by the
Company, in whole or in part, without penalty, along with any interest on the
date of such prepayment. Notice of prepayment shall be given to Holder by the
Company by certified mail to Holder's last known address not less then 30 days
nor more than 60 days prior to prepayment.
Interest and principal, if applicable, is payable on the Maturity Date, or
at any other payment due date, by check or draft mailed on the Maturity Date, or
at any other payment due date. The principal and interest on this Note are
payable in lawful money of the United States of America.
Notwithstanding the foregoing, this Note shall be come due and payable,
including all accrued interest, upon the occurrence of any of the following
defaults ("Default"): (a) there is a failure to pay any installment of principal
and/or interest due under this Note, and the same is not cured within thirty
(30) days of Silverado's receipt of the written Notice of Default, which shall
be delivered upon Silverado being greater than 7 days late in any payment; or is
not otherwise excused by the Holder; or (b) the Company becomes insolvent, a
receiver is appointed for any part of the Company's property, or the Company
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by or against any of them under any bankruptcy or insolvency laws, and
any such action continues for a period of sixty (60) days. In the event of any
such default in payment which is not cured within 30 days after Silverado's
receipt of written Notice, Silverado will agree to release an appropriate number
of shares from the escrow account representing the dollar amount of interest and
principal which is past due. Any such release of such collateral shall be in
lieu of the principal and interest that was past due.
15
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON THE REPRESENTATION OF THE
RECIPIENT THAT THE RECIPIENT IS AN ACCREDITED INVESTOR WHO IS PURCHASING FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION. THE NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED HYPOTHECATED, DONATED, TRANSFERRED WHETHER OR NOT FOR
CONSIDERATION, UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION IS
THEN AVAILABLE, OR THERE IS PRESENTED TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
NECESSARY.
Except as otherwise provided herein, the Company waives presentment,
demand, notice of dishonor, protest and nonpayment, and further waives all
exemptions to which the Company may now or hereafter be entitled under the laws
of this or any other state of the United States, and further agrees that the
Holder shall have the right, without notice, to deal in any way, at any time,
with the Company, and to grant to the Company any extension of time for payment
of this Note and any other indulgence or forbearance whatsoever, in every
instance without the consent of the Company and without in any way affecting the
liability of the Company and the rights the Holder may have hereunder or by
virtue of the laws of this or any other state of the United States.
This Note shall be governed by and construed in accordance
with the laws of the State of California.
IN WITNESS OF THE ABOVE, the Company has caused this Note to be executed in
the name of the Company by the signature of its duly authorized officer, as of
the date shown above.
SILVERADO FINANCIAL, INC.
__________________________
Xxxx X. Xxxxxxx
Chief Executive Officer
16
SCHEDULE B
Payout Schedule for 15% per annum Promissory Note made payable to Xxxxxxx
Xxxxxxxx
Date Principal Interest Payment
-----------------------------------------------------
6/1/2004 $9,000.00 $2,250.00 $11,250.00
7/1/2004 $9,000.00 $2,137.50 $11,137.50
8/1/2004 $9,000.00 $2,025.00 $11,025.00
9/1/2004 $9,000.00 $1,912.50 $10,912.50
10/1/2004 $9,000.00 $1,800.00 $10,800.00
11/1/2004 $9,000.00 $1,687.50 $10,687.50
12/1/2004 $9,000.00 $1,575.00 $10,575.00
1/1/2005 $9,000.00 $1,462.50 $10,462.50
2/1/2005 $9,000.00 $1,350.00 $10,350.00
3/1/2005 $9,000.00 $1,237.50 $10,237.50
4/1/2005 $9,000.00 $1,125.00 $10,125.00
5/1/2005 $9,000.00 $1,012.50 $10,012.50
6/1/2005 $9,000.00 $900.00 $9,900.00
7/1/2005 $9,000.00 $787.50 $9,787.50
8/1/2005 $9,000.00 $675.00 $9,675.00
9/1/2005 $9,000.00 $562.50 $9,562.50
10/1/2005 $9,000.00 $450.00 $9,450.00
11/1/2005 $9,000.00 $337.50 $9,337.50
12/1/2005 $9,000.00 $225.00 $9,225.00
1/1/2006 $9,000.00 $112.50 $10,040.90
-----------------------------------------------------
TOTAL $204,553.40
SILVERADO FINANCIAL, INC.
15% FIXED RATE PROMISSORY NOTE
DATE: May 2, 2004
Interest Rate: 15%
Principal Amount: $20,000.00
Silverado Financial, Inc., a Nevada corporation (the "Company"), for value
received, promises to pay to XXXXXXX XXXXXXXXX (the "Holder"), the Principal
Amount set forth above together with interest thereon, at the rate of 15% per
annum, payable monthly, in accordance with Schedule D following, with the
Principal Amount hereof due in full over twenty (20) months in equal
installments, subject to earlier acceleration or prepayment, on/or before
January 1, 2006. (The "Maturity Date").
If the Maturity Date, or at any other payment due date, or at any other
payment due date, is not a Business Day, then payment of interest or principal
may be made on the next succeeding Business Day, with the same force and effect
as if such payment were made on such Maturity Date, or at any other payment due
date, or at any other payment due date, and interest shall accrue for the period
after such date. The term "Business Day" as used herein means any day, other
than a Saturday or Sunday, on which commercial banks located in California, are
not required to be or authorized to be closed.
17
All installments of principal and/or interest on this Note shall be paid to
the Holder, at his or her address at 0000 Xxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, or such other location as the Holder hereof may from time to
time specify in writing or to such other place as may be designated in writing
by the Holder.
Upon the election of the Company, the Note is subject to prepayment by the
Company, in whole or in part, without penalty, along with any interest on the
date of such prepayment. Notice of prepayment shall be given to Holder by the
Company by certified mail to Holder's last known address not less then 30 days
nor more than 60 days prior to prepayment.
Interest and principal, if applicable, is payable on the Maturity Date, or
at any other payment due date, by check or draft mailed on the Maturity Date, or
at any other payment due date. The principal and interest on this Note are
payable in lawful money of the United States of America.
Notwithstanding the foregoing, this Note shall be come due and payable,
including all accrued interest, upon the occurrence of any of the following
defaults ("Default"): (a) there is a failure to pay any installment of principal
and/or interest due under this Note, and the same is not cured within thirty
(30) days of Silverado's receipt of the written Notice of Default, which shall
be delivered upon Silverado being greater than 7 days late in any payment; or is
not otherwise excused by the Holder; or (b) the Company becomes insolvent, a
receiver is appointed for any part of the Company's property, or the Company
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by or against any of them under any bankruptcy or insolvency laws, and
any such action continues for a period of sixty (60) days. In the event of any
such default in payment which is not cured within 30 days after Silverado's
receipt of written Notice, Silverado will agree to release an appropriate number
of shares from the escrow account representing the dollar amount of interest and
principal which is past due. Any such release of such collateral shall be in
lieu of the principal and interest that was past due.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON THE REPRESENTATION OF THE
RECIPIENT THAT THE RECIPIENT IS AN ACCREDITED INVESTOR WHO IS PURCHASING FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION. THE NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED HYPOTHECATED, DONATED, TRANSFERRED WHETHER OR NOT FOR
CONSIDERATION, UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION IS
THEN AVAILABLE, OR THERE IS PRESENTED TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
NECESSARY.
Except as otherwise provided herein, the Company waives presentment,
demand, notice of dishonor, protest and nonpayment, and further waives all
exemptions to which the Company may now or hereafter be entitled under the laws
of this or any other state of the United States, and further agrees that the
Holder shall have the right, without notice, to deal in any way, at any time,
with the Company, and to grant to the Company any extension of time for payment
of this Note and any other indulgence or forbearance whatsoever, in every
instance without the consent of the Company and without in any way affecting the
liability of the Company and the rights the Holder may have hereunder or by
virtue of the laws of this or any other state of the United States.
This Note shall be governed by and construed in accordance with the laws of the
State of California.
IN WITNESS OF THE ABOVE, the Company has caused this Note to be executed in
the name of the Company by the signature of its duly authorized officer, as of
the date shown above.
18
SILVERADO FINANCIAL, INC.
__________________________
Xxxx X. Xxxxxxx
Chief Executive Officer
SCHEDULE D
Payout Schedule for 15% per annum Promissory Note made payable to Xxxxxxx
Xxxxxxxxx
Date Principal Interest Payment
----------------------------------------------------
6/1/2004 $1,000.00 $250.00 $1,250.00
7/1/2004 $1,000.00 $237.50 $1,237.50
8/1/2004 $1,000.00 $225.00 $1,225.00
9/1/2004 $1,000.00 $212.50 $1,212.50
10/1/2004 $1,000.00 $200.00 $1,200.00
11/1/2004 $1,000.00 $187.50 $1,187.50
12/1/2004 $1,000.00 $175.00 $1,175.00
1/1/2005 $1,000.00 $162.50 $1,162.50
2/1/2005 $1,000.00 $150.00 $1,150.00
3/1/2005 $1,000.00 $137.50 $1,137.50
4/1/2005 $1,000.00 $125.00 $1,125.00
5/1/2005 $1,000.00 $112.50 $1,112.50
6/1/2005 $1,000.00 $100.00 $1,100.00
7/1/2005 $1,000.00 $87.50 $1,087.50
8/1/2005 $1,000.00 $75.00 $1,075.00
9/1/2005 $1,000.00 $62.50 $1,062.50
10/1/2005 $1,000.00 $50.00 $1,050.00
11/1/2005 $1,000.00 $37.50 $1,037.50
12/1/2005 $1,000.00 $25.00 $1,025.00
1/1/2006 $1,000.00 $12.50 $1,115.66
----------------------------------------------------
TOTAL $22,728.16
SCHEDULE E
SILVERADO FINANCIAL, INC.
8% FIXED RATE PROMISSORY NOTE
DATE: May 2, 2004
Interest Rate: 8%
Principal Amount: $144,000.00
Silverado Financial, Inc., a Nevada corporation (the "Company"), for value
received, promises to pay to XXXXXXX XXXXXXXX (the "Holder"), the Principal
Amount set forth above together with interest thereon, at the rate of 8% per
annum, payable quarterly, in accordance with Schedule F following, with the
Principal Amount hereof due in full in three (3) years, subject to earlier
acceleration or prepayment, on/or before June 25, 2007. (The "Maturity Date").
19
If the Maturity Date, or at any other payment due date, is not a Business
Day, then payment of interest or principal may be made on the next succeeding
Business Day, with the same force and effect as if such payment were made on
such Maturity Date, or at any other payment due date, and interest shall accrue
for the period after such date. The term "Business Day" as used herein means any
day, other than a Saturday or Sunday, on which commercial banks located in
California, are not required to be or authorized to be closed.
All installments of principal and/or interest on this Note shall be paid to
the Holder, at his or her address at 000 Xxxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxx
00000, or such other location as the Holder hereof may from time to time specify
in writing or to such other place as may be designated in writing by the Holder.
Upon the election of the Company, the Note is subject to prepayment by the
Company, in whole or in part, without penalty, along with any interest on the
date of such prepayment. Notice of prepayment shall be given to Holder by the
Company by certified mail to Holder's last known address not less then 30 days
nor more than 60 days prior to prepayment.
Interest and principal, if applicable, is payable on the Maturity Date, or
at any other payment due date, by check or draft mailed on the Maturity Date, or
at any other payment due date. The principal and interest on this Note are
payable in lawful money of the United States of America.
Notwithstanding the foregoing, this Note shall be come due and payable,
including all accrued interest, upon the occurrence of any of the following
defaults ("Default"): (a) there is a failure to pay any installment of principal
and/or interest due under this Note, and the same is not cured within thirty
(30) days of Silverado's receipt of the written Notice of Default, which shall
be delivered upon Silverado being greater than 7 days late in any payment; or is
20
not otherwise excused by the Holder; or (b) the Company becomes insolvent, a
receiver is appointed for any part of the Company's property, or the Company
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by or against any of them under any bankruptcy or insolvency laws, and
any such action continues for a period of sixty (60) days. In the event of any
such default in payment which is not cured within 30 days after Silverado's
receipt of written Notice, Silverado will agree to release an appropriate number
of shares from the escrow account representing the dollar amount of interest and
principal which is past due. Any such release of such collateral shall be in
lieu of the principal and interest that was past due.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON THE REPRESENTATION OF THE
RECIPIENT THAT THE RECIPIENT IS AN ACCREDITED INVESTOR WHO IS PURCHASING FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION. THE NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED HYPOTHECATED, DONATED, TRANSFERRED WHETHER OR NOT FOR
CONSIDERATION, UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION IS
THEN AVAILABLE, OR THERE IS PRESENTED TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
NECESSARY.
Except as otherwise provided herein, the Company waives presentment,
demand, notice of dishonor, protest and nonpayment, and further waives all
exemptions to which the Company may now or hereafter be entitled under the laws
of this or any other state of the United States, and further agrees that the
Holder shall have the right, without notice, to deal in any way, at any time,
with the Company, and to grant to the Company any extension of time for payment
of this Note and any other indulgence or forbearance whatsoever, in every
instance without the consent of the Company and without in any way affecting the
liability of the Company and the rights the Holder may have hereunder or by
virtue of the laws of this or any other state of the United States.
This Note shall be governed by and construed in accordance with the laws of the
State of California.
IN WITNESS OF THE ABOVE, the Company has caused this Note to be executed in
the name of the Company by the signature of its duly authorized officer, as of
the date shown above.
SILVERADO FINANCIAL, INC.
___________________________
Xxxx X. Xxxxxxx
Chief Executive Officer
21
SCHEDULE F
Payout Schedule for 8% per annum Interest Only Promissory Note made payable to
Xxxxxxx Xxxxxxxx
Date 8% Note
---------------------------------
25-Jun-04 $ 2,880.00
25-Sep-04 $ 2,880.00
31-Dec-04 $ 2,880.00
26-Mar-05 $ 2,880.00
25-Jun-05 $ 2,880.00
25-Sep-05 $ 2,880.00
31-Dec-05 $ 2,880.00
26-Mar-06 $ 2,880.00
25-Jun-06 $ 2,880.00
25-Sep-06 $ 2,880.00
31-Dec-06 $ 2,880.00
26-Mar-07 $ 2,880.00
25-Jun-07 $ 144,000.00
---------------------------------
TOTAL $ 178,560.00
SCHEDULE G
SILVERADO FINANCIAL, INC.
5% FIXED RATE CONVERTIBLE PROMISSORY NOTE
DATE: May 2, 2004
Interest Rate: 5%
Principal Amount: $144,000.00
Silverado Financial, Inc., a Nevada corporation (the "Company"), for value
received, promises to pay to XXXXXXX XXXXXXXX (the "Holder"), the Principal
Amount set forth above together with interest thereon, at the rate of 5% per
annum, payable quarterly on the amount of 5% Convertible Promissory Note that
has not been converted into Silverado common stock, in accordance with Schedule
H following, subject to earlier acceleration or prepayment.
If the Maturity Date, or at any other payment due date, is not a Business
Day, then payment of interest or principal may be made on the next succeeding
Business Day, with the same force and effect as if such payment were made on
such Date, and interest shall accrue for the period after such date. The term
"Business Day" as used herein means any day, other than a Saturday or Sunday, on
which commercial banks located in California, are not required to be or
authorized to be closed.
All installments of principal and/or interest on this Note shall be paid to
the Holder at his or her address at 000 Xxxxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxx
00000, or such other location as the Holder hereof may from time to time specify
in writing or to such other place as may be designated in writing by the Holder.
22
Upon the election of the Company, the Note is subject to prepayment by the
Company, in whole or in part, without penalty, along with any interest on the
date of such prepayment. Notice of prepayment shall be given to Holder by the
Company by certified mail to Holder's last known address not less then 30 days
nor more than 60 days prior to prepayment.
Interest and principal, if applicable, is payable on the Maturity Date, or
at any other payment due date, by check or draft mailed on the Date. The
principal and interest on this Note are payable in lawful money of the United
States of America.
Notwithstanding the foregoing, this Note shall be come due and payable,
including all accrued interest, upon the occurrence of any of the following
defaults ("Default"): (a) there is a failure to pay any installment of principal
and/or interest due under this Note, and the same is not cured within thirty
(30) days of Silverado's receipt of the written Notice of Default, which shall
be delivered upon Silverado being greater than 7 days late in any payment; or is
not otherwise excused by the Holder; or (b) the Company becomes insolvent, a
receiver is appointed for any part of the Company's property, or the Company
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by or against any of them under any bankruptcy or insolvency laws, and
any such action continues for a period of sixty (60) days. In the event of any
such default in payment which is not cured within 30 days after Silverado's
receipt of written Notice, Silverado will agree to release an appropriate number
of shares from the escrow account representing the dollar amount of interest and
principal which is past due. Any such release of such collateral shall be in
lieu of the principal and interest that was past due.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON THE REPRESENTATION OF THE
RECIPIENT THAT THE RECIPIENT IS AN ACCREDITED INVESTOR WHO IS PURCHASING FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION. THE NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED HYPOTHECATED, DONATED, TRANSFERRED WHETHER OR NOT FOR
CONSIDERATION, UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION IS
THEN AVAILABLE, OR THERE IS PRESENTED TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
NECESSARY.
Except as otherwise provided herein, the Company waives presentment,
demand, notice of dishonor, protest and nonpayment, and further waives all
exemptions to which the Company may now or hereafter be entitled under the laws
of this or any other state of the United States, and further agrees that the
Holder shall have the right, without notice, to deal in any way, at any time,
with the Company, and to grant to the Company any extension of time for payment
of this Note and any other indulgence or forbearance whatsoever, in every
instance without the consent of the Company and without in any way affecting the
liability of the Company and the rights the Holder may have hereunder or by
virtue of the laws of this or any other state of the United States.
23
DESCRIPTION OF THE 5% CONVERTIBLE PROMISSORY NOTE
Conversion Price...The 5% Convertible Promissory Note is convertible into
common stock at the greater of 100% of the average share
closing price during the five trading days prior to
conversion or $.35 per share; upon receipt by the Issuer
from the Convertible Promissory Note Holder(s) of notice of
conversion. At the time of conversion, Silverado Financial
may elect to pay accrued but unpaid dividends through the
conversion date either in cash or additional shares of
Silverado Financial Common Stock valued at the current
asking price, as per xxx.xxxxxxxxx.xxx, of the Common Stock
at the time of conversion.
Interest Payments...Pays quarterly non-amortizing interest of 5% per annum.
Payments beginning on the nearest upcoming quarterly payment
date after the Closing, as per the following schedule: 1rst
Quarter payment date March 26, 2nd Quarter payment date June
25, 3rd Quarter payment date September 25, 4th Quarter
payment date December 31.
Redemption..........The 5% Convertible Promissory Note may be redeemed by
Silverado at any time, for cash, or other acceptable
negotiable instrument, upon payment of the unpaid principal
and accrued interest balance due on that date. The
redemption date will be designated in the notice of
redemption, and will be a date between 30 and 60 days after
the notice of redemption is given to the holders of 5%
Convertible Promissory Note.
Collateral..........Secured against the same 2,000,000 restricted shares common
shares of Silverado as the other NOTES involved in the
transaction.
Default.............Default is defined as non-payment of the prescribed
quarterly payments, not cured within 30 days after
Silverado's receipt of the written Notice of Default, which
shall be delivered upon Silverado being greater than 7 days
late in any payment. In the event of any default in payment
which is not cured within 30 days after receipt of written
Notice, Silverado will agree to release an appropriate
number of shares from the escrow account representing the
dollar amount of interest and principal which is past due.
Any such release of such collateral shall be in lieu of the
principal and interest that was past due.
Share Adjustments...The Promissory Note will automatically adjust appropriately
to any forward or reverse stock splits to reflect the same
ownership percentage as previous to the split.
This Note shall be governed by and construed in accordance with the laws of the
State of Califonia.
IN WITNESS OF THE ABOVE, the Company has caused this Note to be executed in
the name of the Company by the signature of its duly authorized officer, as of
the date shown above.
SILVERADO FINANCIAL, INC.
___________________________
Xxxx X. Xxxxxxx
Chief Executive Officer
24
SCHEDULE H
Payout Schedule for the un-converted 5% per annum Convertible Promissory Note
made payable to Xxxxxxx Xxxxxxxx
Unconverted
Date 5% Note
----------------------------
25-Jun-04 $1,800.00
25-Sep-04 $1,800.00
31-Dec-04 $1,800.00
26-Mar-05 $1,800.00
25-Jun-05 $1,800.00
25-Sep-05 $1,800.00
31-Dec-05 $1,800.00
26-Mar-06 $1,800.00
25-Jun-06 $1,800.00
25-Sep-06 $1,800.00
31-Dec-06 $1,800.00
26-Mar-07 $1,800.00
SCHEDULE I
SILVERADO FINANCIAL, INC.
5% FIXED RATE CONVERTIBLE PROMISSORY NOTE
DATE: May 2, 2004
Interest Rate: 5%
Principal Amount: $32,000.00
Silverado Financial, Inc., a Nevada corporation (the "Company"), for value
received, promises to pay to XXXXXXX XXXXXXXXX (the "Holder"), the Principal
Amount set forth above together with interest thereon, at the rate of 5% per
annum, payable quarterly on the amount of 5% Convertible Promissory Note that
has not been converted into Silverado common stock, in accordance with Schedule
J following, subject to earlier acceleration or prepayment.
If the Maturity Date, or any other payment date, is not a Business Day,
then payment of interest or principal may be made on the next succeeding
Business Day, with the same force and effect as if such payment were made on
such Date, and interest shall accrue for the period after such date. The term
"Business Day" as used herein means any day, other than a Saturday or Sunday, on
which commercial banks located in California, are not required to be or
authorized to be closed.
All installments of principal and/or interest on this Note shall be paid to
the Holder, at his or her address at 0000 Xxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, or such other location as the Holder hereof may from time to
time specify in writing or to such other place as may be designated in writing
by the Holder.
Upon the election of the Company, the Note is subject to prepayment by the
Company, in whole or in part, without penalty, along with any interest on the
date of such prepayment. Notice of prepayment shall be given to Holder by the
Company by certified mail to Holder's last known address not less then 30 days
nor more than 60 days prior to prepayment.
25
Interest and principal, if applicable, is payable on the Maturity Date, or
any other payment date, by check or draft mailed on the Date. The principal and
interest on this Note are payable in lawful money of the United States of
America.
Notwithstanding the foregoing, this Note shall be come due and payable,
including all accrued interest, upon the occurrence of any of the following
defaults ("Default"): (a) there is a failure to pay any installment of principal
and/or interest due under this Note, and the same is not cured within thirty
(30) days of Silverado's receipt of the written Notice of Default, which shall
be delivered upon Silverado being greater than 7 days late in any payment; or is
not otherwise excused by the Holder; or (b) the Company becomes insolvent, a
receiver is appointed for any part of the Company's property, or the Company
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by or against any of them under any bankruptcy or insolvency laws, and
any such action continues for a period of sixty (60) days. In the event of any
such default in payment which is not cured within 30 days after Silverado's
receipt of written Notice, Silverado will agree to release an appropriate number
of shares from the escrow account representing the dollar amount of interest and
principal which is past due. Any such release of such collateral shall be in
lieu of the principal and interest that was past due.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON THE REPRESENTATION OF THE
RECIPIENT THAT THE RECIPIENT IS AN ACCREDITED INVESTOR WHO IS PURCHASING FOR
INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION. THE NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED HYPOTHECATED, DONATED, TRANSFERRED WHETHER OR NOT FOR
CONSIDERATION, UNLESS AND UNTIL THEY ARE SO REGISTERED OR UNLESS AN EXEMPTION IS
THEN AVAILABLE, OR THERE IS PRESENTED TO THE COMPANY AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
NECESSARY.
Except as otherwise provided herein, the Company waives presentment,
demand, notice of dishonor, protest and nonpayment, and further waives all
exemptions to which the Company may now or hereafter be entitled under the laws
of this or any other state of the United States, and further agrees that the
Holder shall have the right, without notice, to deal in any way, at any time,
with the Company, and to grant to the Company any extension of time for payment
of this Note and any other indulgence or forbearance whatsoever, in every
instance without the consent of the Company and without in any way affecting the
liability of the Company and the rights the Holder may have hereunder or by
virtue of the laws of this or any other state of the United States.
DESCRIPTION OF THE 5% CONVERTIBLE PROMISSORY NOTE
Conversion Price....The 5% Convertible Promissory Note is convertible into
common stock at the greater of 100% of the average share
closing price during the five trading days prior to
conversion or $.35 per share; upon receipt by the Issuer
from the Convertible Promissory Note Holder(s) of notice of
conversion. At the time of conversion, Silverado Financial
may elect to pay accrued but unpaid dividends through the
conversion date either in cash or additional shares of
Silverado Financial Common Stock valued at the current
asking price, as per xxx.xxxxxxxxx.xxx, of the Common Stock
at the time of conversion.
26
DESCRIPTION OF THE 5% CONVERTIBLE PROMISSORY NOTE- continued
Interest Payments...Pays quarterly non-amortizing interest of 5% per annum.
Payments beginning on the nearest upcoming quarterly payment
date after the Closing, as per the following schedule: 1rst
Quarter payment date March 26, 2nd Quarter payment date June
25, 3rd Quarter payment date September 25, and 4th Quarter
payment date December 31.
Redemption..........The 5% Convertible Promissory Note may be redeemed by
Silverado at any time, for cash, or other acceptable
negotiable instrument, upon payment of the unpaid principal
and accrued interest balance due on that date. The
redemption date will be designated in the notice of
redemption, and will be a date between 30 and 60 days after
the notice of redemption is given to the holders of 5%
Convertible Promissory Note.
Collateral..........Secured against the same 2,000,000 restricted shares common
shares of Silverado as the other NOTES involved in the
transaction.
Default.............Default is defined as non-payment of the prescribed
quarterly payments, not cured within 30 days after
Silverado's receipt of the written Notice of Default, which
shall be delivered upon Silverado being greater than 7 days
late in any payment. In the event of any default in payment
which is not cured within 30 days after receipt of written
Notice, Silverado will agree to release an appropriate
number of shares from the escrow account representing the
dollar amount of interest and principal which is past due.
Any such release of such collateral shall be in lieu of the
principal and interest that was past due.
Share Adjustments...The Promissory Note will automatically adjust appropriately
to any forward or reverse stock splits to reflect the same
ownership percentage as previous to the split.
This Note shall be governed by and construed in accordance with the laws of the
State of California.
IN WITNESS OF THE ABOVE, the Company has caused this Note to be executed in
the name of the Company by the signature of its duly authorized officer, as of
the date shown above.
SILVERADO FINANCIAL, INC.
___________________________
Xxxx X. Xxxxxxx
Chief Executive Officer
27
SCHEDULE J
Payout Schedule for the un-converted 5% per annum Convertible Promissory Note
made payable to Xxxxxxx Xxxxxxxxx
Unconverted
Date 5% Note
---------------------------------
25-Jun-04 $400.00
25-Sep-04 $400.00
31-Dec-04 $400.00
26-Mar-05 $400.00
25-Jun-05 $400.00
25-Sep-05 $400.00
31-Dec-05 $400.00
26-Mar-06 $400.00
25-Jun-06 $400.00
25-Sep-06 $400.00
31-Dec-06 $400.00
26-Mar-07 $400.00
SCHEDULE K
Lendingtech Financial Statements
SCHEDULE L
Broker Change Application
SCHEDULE M
Franchise Tax Board Memorandums from Lendingtech
SCHEDULE N
Notice of Conversion
SCHEDULE O
URL's usernames, passwords, co-location site information(s), software(s) etc...
SCHEDULE P
Corporation License Application
SCHEDULE Q
Escrow Agreement
SCHEDULE Q
ESCROW AGREEMENT
-------------------
ESCROW AGREEMENT (this "Escrow Agreement") dated May 1, 2004, by and among
Xxxxxxx Xxxxxxxx whose main office is located at 000 Xxxxxxxxx Xxxx, Xxxx
Xxxxxx, Xxxxxxxxxx 00000 ("Seller"); and Silverado Financial Inc. having an
address at 0000 X. Xxx Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000, a
Nevada Corporation ("Buyer"); and Xxxxx Xxxx, attorney at law as escrow agent
(the "Escrow Agent") located at 000 X. Xxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000.
00
X X X X X X X X X:
WHEREAS, Buyer and Seller are parties to that certain purchase agreement
dated May 1, 2004 (the "Purchase Agreement") regarding the purchase by Buyer of
all of the outstanding stock of Xxxxxxxxxxx.xxx, Inc.
WHEREAS, pursuant to the Purchase Agreement, Buyer has agreed to be the
maker of five (5) Promissory notes (the "NOTES") to be collateralized with
two-million (2,000,000) Silverado Financial common shares, restricted pursuant
to Rule 144, which shares shall be held by the Escrow Agent in escrow and
released in accordance with the terms and conditions of the Purchase Agreement
and the accompanying NOTES:
WHEREAS, Xxxxxxx Xxxxxxxxx has acted as Seller's agent in connection with
the transaction referred to above; and
WHEREAS, Buyer, Seller and Xxxxxxx Xxxxxxxxx acknowledge and agree that
this Escrow Agreement shall serve as irrevocable authorization and direction to
the Escrow Agent to receive, hold, and ultimately deliver the Escrow Fund (as
hereinafter defined), upon the terms, and subject to the conditions, of this
Escrow Agreement and attached NOTES.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties to this Escrow Agreement hereby agree
as follows:
SECTION 1. Escrow of Deposit.
-----------------------------
Simultaneously with the execution of this Escrow Agreement, Buyer shall cause
the Deposit to be paid to the Escrow Agent two million (2,000,000) restricted
common shares of Silverado Financial Inc. 1,800,000 in the name of Xxxxxxx
Xxxxxxxx and 200,000 in the name of Xxxxxxx Xxxxxxxxx. Said deposit shall become
non-refundable to buyer to the extent of the monetary default of the NOTES. Said
remedy shall be applied toward payment of any default in the NOTES, and any
release of such deposited shares due to any default shall be reduced
proportionally by the amount of interest and principal paid prior to default.
SECTION 2. Acknowledgement of Receipt of Shares.
---------------------------------------------------
The Escrow Agent, by its execution and delivery of this Agreement, will
acknowledge receipt of such shares, and the Escrow Agent agrees to hold the
2,000,000 restricted shares in escrow, and to act as such escrow agent with
respect thereto in accordance with the terms of this Escrow Agreement.
2.01 If the deposited shares, at the date of default, as defined in Section 1.01
a) of the Purchase Agreement, are worth less (measured by the closing price as
per xxx.xxxxxxxxx.xxx) than the principal amount and accrued interest owed on
the NOTES, then there will be no reduction for the principal and interest
already paid. However, if the deposited shares at the date of default are worth
greater (measured by the closing price as per xxx.xxxxxxxxx.xxx) than the
principal amount and accrued interest owed on the notes, then there will be a
pro-rata reduction for the principal and interest paid, to the extent that the
reduction does not decrease the value of the shares below the amount owed on the
NOTES, and the excess of deposited shares shall be returned to Buyer.
29
SECTION 3. Release by Escrow Agent.
-----------------------------------
The Escrow Agent shall continue to hold the 2,000,000 Silverado Financial
restricted common shares in escrow, and, subject to the terms of this Escrow
Agreement, shall only release such restricted common shares upon, and in
accordance with, the Purchase Agreement and NOTES.
SECTION 4. Further Assurances.
------------------------------
Buyer, Seller and Xxxxxxx Xxxxxxxxx agree to do such further acts and to execute
and deliver such statements, assignments, agreements, instruments and other
documents as the Escrow Agent, from time to time, may reasonably request in
connection with the administration, maintenance, enforcement or adjudication of
this Escrow Agreement in order (a)to give the Escrow Agent confirmation and
assurance of the Escrow Agent's rights, powers, privileges, remedies and
interests under this Escrow Agreement and applicable law, (b)to better enable
the Escrow Agent to exercise any such right, power, privilege, remedy or
interest, or (c)to otherwise effectuate the purpose and the terms and provisions
of this Escrow Agreement, each in such form and substance as may be reasonably
acceptable to the Escrow Agent.
SECTION 5. Conflicting Demands.
--------------------------------
If conflicting or adverse claims or demands are made or notices served upon the
Escrow Agent with respect to the escrow provided for herein, Seller and Buyer
agree that the Escrow Agent shall refuse to comply with any such claim or demand
and withhold and stop all further performance of this escrow so long as such
disagreement shall continue. In so doing, the Escrow Agent shall not be or
become liable for damages, losses, costs, expenses or interest to Seller, Buyer
and Xxxxxxx Xxxxxxxxx and/or any other person for his failure to comply with
such conflicting or adverse demands. The Escrow Agent shall be entitled to
continue to so refrain and refuse to so act until such conflicting claims or
demands shall have been finally determined by an arbitrator of competent
jurisdiction or shall have been settled by agreement of the parties to such
controversy, in which case the Escrow Agent shall be notified thereof in a
notice signed by such parties.
SECTION 6. Disputes.
--------------------
Each of the parties hereto hereby covenants and agrees that the Federal or state
courts located in the County of Santa Xxxxx in the state of California shall
have jurisdiction over any dispute with the Escrow Agent or relating to this
Escrow Agreement.
SECTION 7. Reliance on Documents and Experts.
-----------------------------------------------
The Escrow Agent shall be entitled to rely upon any notice, consent,
certificate, affidavit, statement, paper, document, writing or communication
(which to the extent permitted hereunder may be by telegram, cable, telecopy, or
telephone) reasonably believed by it to be genuine and to have been signed, sent
or made by the proper person or persons, and upon opinions and advice of legal
counsel (including himself or counsel for any party hereto), independent public
accountants and other experts selected by the Escrow Agent and mutually
acceptable to Buyer, Seller and Xxxxxxx Xxxxxxxxx.
30
SECTION 8. Status of the Escrow Agent, Etc.
-----------------------------------------------
The Escrow Agent is acting under this Escrow Agreement as a stakeholder only. No
term or provision of this Escrow Agreement is intended to create, nor shall any
such term or provision be deemed to have created, any joint venture, partnership
or attorney-client relationship between or among the Escrow Agent and Seller,
Buyer and/or Xxxxxxx Xxxxxxxxx. This Escrow Agreement shall not be deemed to
prohibit or in any way restrict the Escrow Agent's legal representation of
Seller, who may be advised by the Escrow Agent on any and all matters pertaining
to this Escrow Agreement. To the extent that Seller has been represented by the
Escrow Agent, Seller hereby waives any conflict of interest and irrevocably
authorizes and directs the Escrow Agent to carry out the terms and provisions of
this Escrow Agreement fairly as to all parties, without regard to any such
representation and irrespective of the impact upon Seller. The Escrow Agent's
only duties are those expressly set forth in this Escrow Agreement, and the
parties hereto authorize the Escrow Agent to perform those duties in accordance
with his usual practices in holding funds of his own or those of other escrows.
The Escrow Agent may exercise or otherwise enforce any of his rights, powers,
privileges, remedies and interests under this Escrow Agreement and applicable
law or perform any of his duties under this Escrow Agreement by or through his
partners, employees, attorneys, agents or designees.
SECTION 9. Exculpation.
-------------------------
The Escrow Agent and his designees, and their respective partners, employees,
attorneys and agents, shall not incur any liability whatsoever for the
investment or disposition of the Escrow Fund or the taking of any other action
in accordance with the terms and provisions of this Escrow Agreement; and Buyer,
Seller and Xxxxxxx Xxxxxxxxx hereby waive any and all claims and actions
whatsoever against the Escrow Agent and his designees, and their respective
partners, employees, attorneys and agents, arising out of or related directly or
indirectly to any and all of the foregoing acts, omissions and circumstances.
SECTION 10. Indemnification.
-----------------------------
The Escrow Agent and his designees, and their respective partners, employees,
attorneys and agents, shall be indemnified, reimbursed, held harmless and, at
the request of the Escrow Agent, defended, jointly and severally by Buyer,
Seller and Xxxxxxx Xxxxxxxxx from and against any and all claims, liabilities,
losses and expenses (including, without limitation, the reasonable
disbursements, expenses and fees of their respective attorneys) that may be
imposed upon, incurred by, or asserted against any of them, arising out of, or
related directly or indirectly to, this Escrow Agreement, except such as are
occasioned by the indemnified person's own acts and omissions breaching a duty
owed to the claimant under this Escrow Agreement.
SECTION 11. Notices.
----------------------
Any notice, request, demand or other communication permitted or required to be
given hereunder shall be in writing, shall be sent by one of the following means
to the addressee at the address set forth below (or at such other address as
shall be designated hereunder by notice to the other parties and persons
receiving copies, effective upon actual receipt) and shall be deemed
conclusively to have been given:
(a) upon hand delivery, by telecopy or facsimile at the address or number
designated below (if delivered on a business day during normal business
hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received), or
31
SECTION 11. Notices. - continued
(b) on the second business day following the date of mailing by express courier
service, fully prepaid, addressed to such address, orShare Adjustments
(c) upon actual receipt of such mailing, whichever shall first occur.
If to Buyer: Silverado Financial Inc.
Attention: Xxxx Xxxxxxx
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Seller: Xxxxxxx Xxxxxxxx
000 Xxxxxxxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to Xxxxxxx Xxxxxxxxx: Xxxxxxx Xxxxxxxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Escrow Agent: Xxxxx Xxxx
Attorney at Law
000 X. Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SECTION 12. Section and Other Headings.
----------------------------------------
The section and other headings contained in this Escrow Agreement are for
convenience only, shall not be deemed a part of this Escrow Agreement and shall
not affect the meaning or interpretation of this Escrow Agreement.
SECTION 13. Arbitration.
-------------------------
In the event of a disagreement or dispute between any of the parties hereto
arising out of, or connected with, this Escrow Agreement which cannot be
adjusted by and between the parties involved, the dispute shall be settled
pursuant to the rules of the American Arbitration Association, which rules are
by this reference incorporated herein.
SECTION 14. Counterparts.
--------------------------
This Escrow Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
but all such counterparts shall together constitute one and the same agreement.
SECTION 15. Resignation of Escrow Agent.
-----------------------------------------
The Escrow Agent may, at any time, at his option, elect to resign its duties as
Escrow Agent under this Escrow Agreement by providing notice thereof to Seller,
Buyer and Xxxxxxx Xxxxxxxxx. In such event, the Escrow Agent shall deposit the
32
Resignation of Escrow Agent.- continued
escrowed common stock to a Xxxxxxx X'Xxxx esq., 000 X. 00xx Xxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx, 00000. Telephone: 000-000-0000, Facsimile: 000-000-0000. Trust
within thirty (30) days following the receipt of notice of resignation from the
Escrow Agent, or (b) the Escrow Agent if Buyer, Seller and Xxxxxxx Xxxxxxxxx
shall have not agreed on a successor escrow agent within the aforesaid 30-day
period, upon which appointment and delivery of the Escrow Fund, the Escrow Agent
shall be released of and from all liability under this Escrow Agreement.
SECTION 16. Successors and Assigns; Assignment.
--------------------------------------------------
Whenever in this Escrow Agreement reference is made to any party, such reference
shall be deemed to include the successors, assigns and legal representatives of
such party, and, without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or on behalf
Buyer, Seller and Xxxxxxx Xxxxxxxxx in this Escrow Agreement shall inure to the
benefit of any successor escrow agent hereunder; provided, however, that nothing
herein shall be deemed to authorize or permit Buyer, Seller or Xxxxxxx Xxxxxxxxx
to assign any of his rights or obligations hereunder to any other person without
the written consent of each of the other parties nor to authorize or permit the
Escrow Agent to assign any of his duties or obligations hereunder, except as
provided in this Section 16 hereof. SECTION 17. No Third Party Rights. The
representations, warranties and other terms and provisions of this Escrow
Agreement are for the exclusive benefit of the parties hereto, and no other
person shall have any right or claim against any party by reason of any of those
terms and provisions or be entitled to enforce any of those terms and provisions
against any party.
SECTION 18. No Waiver by Action, Etc.
---------------------------------------
Any waiver or consent respecting any representation, warranty, covenant or other
term or provision of this Escrow Agreement shall be effective only in the
specific instance and for the specific purpose for which given and shall not be
deemed, regardless of frequency given, to be a further or continuing waiver or
consent. The failure or delay of a party at any time or times to require
performance of, or to exercise its rights with respect to, any representation,
warranty, covenant or other term or provision of this Escrow Agreement in no
manner (except as otherwise expressly provided herein) shall affect its right at
a later time to enforce any such term or provision. No notice to, or demand on
Buyer, Seller or Xxxxxxx Xxxxxxxxx in any case shall entitle such party to any
other or further notice or demand in the same, similar or other circumstances.
All rights, powers, privileges, remedies and interests of the parties under this
Escrow Agreement are cumulative and not alternatives, and they are in addition
to and shall not limit (except as otherwise expressly provided herein) any other
right, power, privilege, remedy or interest of the parties under this Escrow
Agreement or applicable law.
SECTION 19. Modification, Amendment, Etc.
--------------------------------------------
Each and every modification and amendment of this Escrow Agreement shall be in
writing and signed by all of the parties hereto, and each and every waiver of,
or consent to any departure from, any covenant, representation, warranty or
other provision of this Escrow Agreement shall be in writing and signed by the
party granting such waiver or consent.
33
SECTION 20. Entire Agreement.
-------------------------------
This Escrow Agreement and accompanying NOTES contain the entire agreement of the
parties with respect to the matters contained herein. Any unclear matters with
respect to this Escrow Agreement will default to the Purchase Agreement for
clarification purposes.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on
the date first written above.
Buyer
_________________________________ Xxxx Xxxxxxx, President and CEO
Silverado Financial Inc
Seller
_________________________________ Xxxxxxx Xxxxxxxx, Individually
Escrow Agent
_________________________________
Xxxxx Xxxx, as Escrow Agent
Attorney at Law
_________________________________
Xxxxxxx Xxxxxxxxx, Individually
34
