EXHIBIT 10.18
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LOAN AGREEMENT
BORROWER'S ORGANIZATION ID NO. C 1209237
THIS LOAN AGREEMENT (this "AGREEMENT") dated December 11th, 2003, is made by and
between SIGNATURE EYEWEAR, INC., a California corporation ("Borrower"), whose
address is 000 X. Xxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, and PEARLTIME
INVESTMENTS LIMITED ("LENDER"), whose address is P.0. Box 957, Offshore
Incorporations Centre, Road Town, Tortola, British Virgin Islands.
AGREEMENT
IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED
HEREIN, AND SUBJECT TO THE TERMS OF THIS AGREEMENT AND THE NOTE, Lender and
Borrower hereby agree as follows:
1. Loan. Lender herby agrees to lend to Borrower, and Borrower hereby agrees to
borrow from Lender, the principle amount of THREE HUNDRED AND FIFTY THOUSAND
DOLLARS ($350,000.00) (the "LOAN") on the terms and conditions set forth below.
2. Note. The Loans shall be evidenced by Borrower's execution and delivery to
Lender of a promissory note (such note, as may be amended, renewed or extended
from time to time, with prior written approval of Lender (the "NOTE") in
substantially the form attached hereto as Exhibit A. The Note shall (i) bear
interest at a rate of three percent (3%) net of any tax deduction per annum,
(ii) be due and payable by 7 monthly installments of FIFTY THOUSAND DOLLARS
($50,000.00) each commencing in April, 2004 and ending in October, 2004 and
(iii) provide for the payment of all accrued interest on October 29, 2004.
3. Notices. Any notice required to be given to any party pursuant to any
provision of this Agreement shall be in writing and sufficient if delivered
personally or sent by telecopier, and nationally recognized overnight courier
addressed as follows:
(a) If to Borrower: Signature Eyewear, Inc. 000 X. Xxx
Xxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000 Attention:
Xxxxxxx Xxxxxx Fax No.: 000-000-0000
(b) If to Lender: Pearltime Investments Limited Xxxx X,
00/X, Xxxxx 0 Xxxxxxx Xxxx Xxxxxx, 00 Xxxxx Xxxxxx,
Xxxxxxx Xxxx Xxxx Xxxx Attention: Xx. Xxx Yin Ping,
Xxxxx
Any party may change its address for the giving of notice hereunder by notice so
given.
4. Governing Law. This Agreement and the Note shall be governed by and construed
in accordance with the laws of the State of California (without regard to
conflicts of law principles) and the laws of the United States applicable to
transactions within such state.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as the day and year first set forth above.
LENDER: BORROWER:
PEARLTIME INVESTMENTS LIMITED SIGNATURE EYEWEAR, INC.
By: /s/ Xxx Xxx Ping, Xxxxx By: /s/ X. Xxxxxx
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Name: Xxx Xxx Ping, Xxxxx Name: Xxxxxxx Xxxxxx
Title: Director Title: Chief Executive Officer
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PROMISSORY NOTE
US$350,000.00 December __, 2003
FOR VALUE RECEIVED, SIGNATURE EYEWEAR INC., a California corporation
("BORROWER") hereby promises to pay to the order of PERALTIME INVESTMENTS
LIMITED, a British Virgin Islands corporation (together with any and all of its
successors and assigns and/or any other holder of this Note, "Lender"), without
offset, in immediately available funds in lawful money of the United States of
America, at P.0. Box 957, Offshore Incorporations Centre, Road Town, Tortola,
British Virgin Islands, the principal sum of Three Hundred and Fifty Thousand
DOLLARS ($350,000.00), together with interest on the unpaid principal balance of
this Note from day to day outstanding as hereinafter provided.
5. Definitions. In addition to other terms defined herein, as used herein the
following terms shall have the meanings indicated, unless the context otherwise
requires:
"Indebtedness" means any and all of the indebtedness to Lender evidenced,
governed or secured by or arising under the Loan Document.
"Laws" means all constitutions, treaties, statutes, laws, ordinances,
regulations, rules, orders, writs, injunctions, or decrees of the United
States of America, any state or commonwealth, any municipality, any foreign
country, any territory or possession, or any Tribunal.
"Loan Agreement" means the loan agreement entered into between the Borrower
and the Lender on December 11th, 2003.
"Loan Document" means the Note and/or the Loan Agreement.
"Note" means this promissory note.
"Principal Debt" means the aggregate unpaid principal balance of this Note
at the time in question.
"Rights" means rights, remedies, powers and privileges.
"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
deductions, withholdings, or other charges of any nature whatsoever from
time to time or at any time imposed by any Laws or Tribunal.
"Tax Deduction" means a deduction or withholding for or on account of Taxes
from a payment under the Loan Document.
"Tribunal" means any state, commonwealth, federal, foreign, territorial or
other court or governmental department, commission, board, bureau,
district, authority, agency, central bank, or instrumentality, or any
arbitration authority.
6. Payment Schedule. The principal balance of this Note shall be due and payable
according to the following payment schedule:
Payment Due Date Principal Payment
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April 30, 2004 $50,000.00
May 31, 2004 $50,000.00
June 30, 2004 $50,000.00
July 30, 2004 $50,000.00
August 30, 2004 $50,000.00
September 30, 2004 $50,000.00
October 29, 2004 $50,000.00
The accrued interest owing on this Note shall be due and fully payable on
October 29, 2004.
Payment of principal balance and interest shall be made by the Borrower to
the Lender by wire transfer in United States Dollars to the bank account
designated by the Lender from time to time.
7. Interest Rate.
The Principal Debt shall bear interest at the rate of three percent (3%) per
annum.
Computations and Determinations. All interest shall be computed on the basis of
a year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day). The books and records of Lender shall be
prima facie evidence of all sums owing to Lender from time to time under this
Note, but the failure to record any such information shall not limit or affect
the obligations of Borrower under the Loan Document.
Default Rate. Any principal of, and to the extent permitted by allocable law,
any Interest on this Note, and any other sum payable hereunder, which is not
paid when due shall bear interest, from the date due and payable until paid,
payable on demand, at a rate per annum equal to fourteen percent (14%).
8. Tax gross-up.
The Borrower must make all payments to be made by it under the Loan Document
without any Tax Deduction, unless a Tax Deduction is required by law.
If Borrower is aware that the Borrower it must make a Tax Deduction (or that
there is a change in the rate or the basis of a Tax Deduction), it must notify
the Lender promptly.
If a Tax Deduction is required by law to be made by the Borrower, the amount of
the interest payment due from the Borrower will be increased to an amount which
(after making the Tax Deduction) leaves an amount equal to the payment which
would have been due if no Tax Deduction had been required.
If the Borrower is required to make a Tax Deduction, it must make the minimum
Tax Deduction allowed by law and must make any payment required in connection
with that Tax Deduction within the time allowed by law.
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Within 30 days of making either a Tax Deduction or a payment required in
connection with a Tax Deduction, the Borrower must deliver to the Lender
evidence satisfactory to the Lender (acting reasonably) that the Tax Deduction
has been made or (as applicable) the appropriate payment has been paid to the
relevant taxing authority.
The Borrower must indemnify the Lender against any loss or liability which the
Lender (in its absolute discretion) determines will or has been suffered
(directly or indirectly) by it for or on account of Taxes in relation to a
payment received or receivable (or any payment deemed to be received or
receivable) under the Loan Document.
9. Prepayment. Borrower may prepay the principal balance of this Note, in full
at any time or in part from time to time, without penalty.
10. Late Charges. If Borrower shall fail to make any payment under the terms of
this Note within ten (10) days after the date such payment is due, Borrower
shall pay to Lender on demand a late charge equal to four percent (4%) of such
payment. Such ten (10) day period shall not be construed as in any way extending
the due date of any payment. The "late charge" is not be construed as in any way
extending the due date of any payment. The "late charge" is imposed for the
purpose of defraying the expenses of Lender incident to handling such delinquent
payment. This charge shall be in addition to, and not in lieu of, any other
remedy Lender may have and is in addition to any fees and charges of any agents
or attorneys which Lender may employ upon the occurrence of a Default
(hereinafter defined) hereunder, whether authorized herein or by law.
11. Certain Provisions Regarding Payments. All payments made as scheduled on
this Note shall be applied, to the extent thereof, to late charges, to accrued
but unpaid interest, unpaid principal, and any other sums due and unpaid to
Lender under the Loan Document. All permitted prepayments on this Note shall be
applied, to the extent thereof, to accrued but unpaid interest on the amount
prepaid, to the remaining principal installments, and any other sums due and
unpaid to Lender under the Loan Document. Acceptance by the Lender of any
payment in an amount less than the amount then due on any Indebtedness shall be
deemed an acceptance on account only, notwithstanding any notation on or
accompanying such partial payment to the contrary, and shall not in any way
excuse the existence of an Default.
12. Defaults
It shall be a default ("Default") under the Loan Document if (i) any principal,
interest or other amount of money due under this Note is not paid in full when
due, in accordance with the terms and conditions of the Loan Agreement,
regardless of how such amount may have become due; (ii) any covenant, agreement,
condition, representation or warranty herein is not fully and timely performed,
observed or kept; or (iii) there shall occur any default or event of default
under the Loan Document, which is not cured pursuant to the terms and provisions
therein. Upon the occurrence of a Default, Lender shall have any and all rights
and remedies set forth in the Loan Agreement, including without limitation the
right (A) to declare in accordance with the Loan Agreement the unpaid principal
balance and accrued but unpaid interest on this Note, and all other amounts due
hereunder and under the Loan Document, at once due and payable (upon such
declaration, the same shall be at once due and payable), (B) to foreclose any
liens and security interests securing payment thereof and (C) to exercise any of
its other rights, powers and remedies under the Loan Document, or at law or in
equity.
All of Rights of Lender provided for in the Loan Document are cumulative of each
other and of any and all other Rights at law or in equity. The resort to any
Right shall not prevent the concurrent or subsequent employment of any other
appropriate Right. No single or partial exercise of any Right shall exhaust it,
or preclude any other or further exercise thereof, and every Right may be
exercised, subject to the terms of the
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Subordination Agreement, at any time and from time to time. No failure by Lender
to exercise, nor delay in exercising any Right, including but not limited to the
right to accelerate the maturity of this Note, shall be construed as a waiver of
any Default or as a waiver of any Right. Without limiting the generality of the
foregoing provisions, the acceptance by Lender from time to time of any payment
under this Note which is past due or which is less than the payment in full of
all amounts due and payable at the time of such payment, shall not (i)
constitute a waiver of or impair or extinguish the right of Lender to accelerate
the maturity of this Note or, to exercise any other Right at the time or at any
subsequent time, or nullify any prior exercise of any such Right, or (ii)
constitute a waiver of the requirement of punctual payment and performance or a
novation in any respect.
If any holder of this Note retains an attorney in connection with any Default or
at maturity of this Note or to collect, enforce or defend the Loan Document in
any lawsuit or in any probate, reorganization, bankruptcy, arbitration or other
proceeding, or if Borrower sues any holder in connection with the Loan Document
and does not prevail, then Borrower agrees to pay to each such holder, in
addition to principal, interest and any other sums owing to Lender hereunder and
under the Loan Document, all costs and expenses incurred by such holder in
trying to collect this Note or in any such suit or proceeding, including,
without limitation, attorneys' fees and expenses, investigation cost and all
court costs, whether or not suit is filed hereon, whether before or after the
payment due dates as provided in Section 1, or whether in connection with
bankruptcy, insolvency or appeal, or whether collection is made against Borrower
or any guarantor or endorser or any other person primarily or secondarily liable
hereunder.
13. Commercial Purpose. Borrower warrants that the Loan is being made solely to
acquire or carry on a business or commercial enterprise, and/or Borrower is a
business or commercial organization. Borrower further warrants that all of the
proceeds of this Note shall be used for commercial purposes and stipulates that
the Loan shall be construed for all purposes as a commercial loan, and is made
for other than personal, family, household or agricultural purposes.
14. WAIVER OF JURY TRIAL. BORROWER WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH BORROWER AND LENDER MAY BE PARTIES, ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY PERTAINING TO LOAN DOCUMENT. IT IS AGREED AND
UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST
PARTIES WHO ARE NOT PARTIES TO THIS NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE BY BORROWER, AND BORROWER HEREBY REPRESENTS THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
BORROWER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE
SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
15. Reservations of Rights. Nothing in this Note shall be deemed to (a) limit
the applicability of any otherwise applicable statutes of limitation or repose
and any waivers contained in this Note, or (b) be a waiver by Lender of the
protection afforded to it by 12 U.S.C. Sec. 91 or any substantially equivalent
state law, or (c) limit the right of Lender, (i) to exercise self help remedies
such as (but not limited to) setoff, or (ii) to foreclose against any real or
personal property collateral, or (iii) to obtain from a court provisional or
ancillary remedies such as (but not limited to) injunctive relief or the
appointment of a receiver, Neither the exercise of self help remedies nor the
institution or maintenance of an action for foreclosure or provisional or
ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
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16. Heirs, Successors and Assigns. The terms of the Loan Document shall bind and
inure to the benefit of the heirs, devisees, representatives, successors and
assigns of the parties. The foregoing sentence shall not be construed to permit
Borrower to assign the Loan. As further provided in the Loan Agreement, Lender
may, at any time, sell, transfer, or assign the Loan Document, and any or all
servicing rights with respect thereto, or grant participations therein.
17. General Provisions. Time is of the essence with respect to Borrower's
obligations under this Note. If more than one person or entity executes this
Note as Borrower, all of said parties shall be jointly and severally liable for
payment of the indebtedness evidenced hereby. Borrower, its successors, assigns
and any other party now or hereafter liable for the payment of this Note in
whole or in part, hereby severally (a) waive demand, presentment for payment,
notice of dishonor and of nonpayment, protest, notice of protest, notice of
intent to accelerate, notice of acceleration and all other notices (except any
notices which are specifically required by the Loan Document), filling of suit
and diligence in collecting this Note or enforcing any of the security herefor;
(b) agree to any substitution, subordination, exchange or release of any such
security or the release of any party primarily or secondarily liable hereon; (c)
agree that Lender shall not be required first to institute suit or exhaust its
remedies hereon against Borrower or others liable or to become liable hereon or
to perfect or enforce its rights against them or any security herefor; (d)
consent to any extensions or postponements of time of payment of this Note for
any period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice
thereof to any of them; and (e) submit (and waive all rights to object) to
non-exclusive personal jurisdiction of any state or federal court sitting in the
State of California, and venue in the city or county in which payment is to be
made as specified in Section 1 of' this Note, for the enforcement of any and all
obligations under this Note and the Loan Documents; (f) waive the benefit of all
homestead and similar exemptions as to this Note; (g) agree that their liability
under this Note shall not be affected or impaired by any determination that any
security interest or lien taken by Lender to secure this Note is invalid or
unperfected; and (h) hereby subordinate any and all rights against Borrower and
any of the security for the payment of this Note, whether by subrogation,
agreement or otherwise, until this Note is paid in full. A determination that
any provision of this Note is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that the
application of any provision of this Note to any person or circumstance is
illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances. This Note may not
be amended except in a writing specifically intended for such purpose and
executed by the Lender and, if other than Lender, the party against whom
enforcement of the amendment is sought. The Lender is hereby authorized to
disseminate any information it now has or hereafter obtains pertaining to the
Loan Document, including, without limitation, any security for this Note and
credit or other information on Borrower, any of its principals and any guarantor
of this Note, to any actual or prospective assignee or participant with respect
to the Loan. Captions and headings in this Note are for convenience only and
shall be disregarded in construing it. THIS NOTE, AND ITS VALIDITY, ENFORCEMENT
AND INTERPRETATION, SHALL BE GOVERNED BY CALIFORNIA LAW (WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.
18. Notice. Any notice, request, or demand to or upon Borrower or Lender shall
be deemed to have been properly given or made when delivered in accordance with
Section 3 of the Loan Agreement.
19. No Usury. It is expressly stipulated and agreed to be the intent of Borrower
and Lender at all times to comply with applicable state law or applicable United
States federal law (to the extent that it permits Lender to contract for,
charge, take, reserve, or receive a greater amount of interest than under state
law) and that this Section shall control every other covenant and agreement in
the Loan Document. If applicable state or federal law should at any time be
judicially interpreted so as to render usurious any amount called for under this
Note or under the Loan Document, or contracted for, charged, taken, reserved, or
received with respect to the Loan, or if Lender's exercise of the option to
accelerate the payment due dates provided in Section 1, or if any prepayment by
Borrower results in Borrower having paid any interesting in excess of that
permitted by
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applicable law, then it is Lender's express intent that all excess amounts
theretofore collected by Lender shall be credited on the principal balance of
this Note and all other indebtedness and the provisions of the Loan Document
shall immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Loan shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Loan
until payment in full so that the rate or amount of interest on account of the
Loan does not exceed the maximum lawful rate from time to time in effect and
applicable to the Loan for so long as the Loan is outstanding.
IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same to be
executed by its duly authorized representatives as of the date set first forth
above.
BORROWER
SIGNATURE EYEWEAR, INC.
a California corporation
The address of the Borrower is: By: /s/ X. Xxxxxx
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000 X. Xxx Xxxxxx Name: Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 Title: Chief Executive Officer
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(0252e.doc)
