EXHIBIT 2.2
AGREEMENT FOR PURCHASE AND SALE
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AND ESCROW INSTRUCTIONS
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Escrow No.: 518648
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Date Opened:
("Escrow") ---------------
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Telephone: ▇▇▇-▇▇▇-▇▇▇▇
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Telecopier:
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("Escrow Holder")
This AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS
("Agreement") is made as of June 30, 2003, by R & H Investments ("Seller") and
Gateway International Holdings, Inc. ("Buyer"). For good, valuable and
sufficient consideration received, Buyer and Seller hereby agree:
1. SALE AND PURCHASE, PRICE AND PAYMENT. Pursuant to this Agreement, Seller
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shall sell to Buyer and Buyer shall purchase from Seller all of Seller's
interest in that certain real property located in the City of Santa ▇▇▇
("City"), County of Orange ("County"), California, legally described on attached
Exhibit "A" ("Property"). The total purchase price ("Purchase Price") for the
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Property is One Million Two Hundred Fifty Thousand Dollars ($1,250,000), payable
as follows:
1.1 Deposit. Upon the opening of Escrow, Buyer shall deliver Five
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Thousand Dollars ($5,000.00) to Escrow Holder ("Deposit"), which Escrow Holder
shall place into an interest bearing account with the interest accruing for the
benefit of Buyer, and which shall apply fully to the Purchase Price.
1.2 Balance of Purchase Price. The balance of the Purchase Price
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shall be paid by Buyer upon the close of Escrow as follows:
1.2.1 Six Hundred Fifty Thousand Dollars ($650,000), less the
Deposit referred to in Section 1.1 above, shall be paid in cash or other
immediately available funds; and
1.2.2 Six Hundred Thousand dollars ($600,000) shall be paid in
the form of a promissory note attached hereto as Exhibit "B" ("Note"), and
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secured by the Buyer's obligation to issue to the Seller upon written notice of
a default under the Note a number of shares of the Buyer's common stock, $.001
par value per share, with a fair market value equal to the amount of the
defaulted payment, or the then current outstanding balance (the "Default
Shares"), at the Seller's option. The Buyer's obligation to issue the Default
Shares shall be secured by a pledge executed by ▇▇. ▇▇▇▇▇▇▇▇, in the form of the
attached Exhibit "C".
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2. TITLE. Seller shall convey fee title to Seller's interest in the
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Property to Buyer by grant deed in the form of attached Exhibit "D" ("Grant
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Deed"). Upon the close of Escrow, First American Title ("Title Company") shall
have and deliver: (i) to Buyer a standard coverage form policy of title
insurance, with liability and limits in the amount of the Purchase Price,
insuring title to the Property as vested in Buyer in fee simple absolute
("Owner's Policy") and (ii) to Seller a standard coverage form policy of
lender's title insurance, with liability and limits in the amount of the Note
("Lender's Policy"), both free and clear of all liens and encumbrances and other
matters affecting title or use of the Property except: (a) the printed
exceptions and exclusions in the Title Policy; (b) the exceptions to title set
forth in Schedule B to the "Title Report" issued by Title Company dated as of
May 28, 2003, a copy of which Buyer and Seller have received; (c) real property
taxes which are a lien but not yet payable; and (d) any other title exceptions
caused or pre-approved in writing by Buyer. Buyer may, at its option, require
that the Title Policy be an extended coverage policy instead of a standard
coverage policy so long as that does not cause a delay to the close of Escrow
and Buyer pays the additional cost therefore (including the cost of any survey
required by the Title Company).
3. ESCROW.
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3.1 Instructions. This Agreement constitutes escrow instructions and
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shall be immediately delivered to Escrow Holder. Escrow Holder's General
Provisions are incorporated herein by this reference, and are approved by Buyer
and Seller, to the extent they do not conflict with this Agreement. If Escrow
Holder requires further escrow instructions, then it shall promptly prepare them
and they shall, if reasonably acceptable to the Buyer and Seller, be signed and
returned to Escrow Holder by each party upon receipt. This Agreement shall
control if it conflicts with any of Escrow Holder's documents.
3.2 Opening. Escrow shall be deemed open on the date Escrow Holder
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receives a fully signed original or counterpart originals of this Agreement.
Escrow Holder shall enter that date on page 1 hereof and promptly notify Buyer
and Seller in writing of that date.
3.3 Closing. Provided all of the conditions to the close of Escrow have
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been satisfied, Escrow shall close on or before the date that is one hundred
twenty (120) days after the date of this Agreement.
3.4 Buyer's Deliveries. By the close of Escrow, provided Seller is
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not in default, Buyer shall deposit into Escrow (signed and acknowledged, if
applicable):
3.4.1 The Purchase Price, less the Deposit and the amount of
the Note, plus any other funds required by Escrow Holder to cover matters to be
borne by Buyer, in immediately available funds, and the original of the Note and
the Deed of Trust; and
3.4.2 All other documents and funds required by this Agreement
to be deposited by Buyer.
3.5 Seller's Deliveries. By the close of Escrow, provided Buyer is
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not in default, Seller shall deposit into Escrow (signed and acknowledged, if
applicable):
3.5.1 The Grant Deed;
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3.5.2 An Affidavit of Non-Foreign Status with respect to
Federal withholding requirements on Escrow Holder's standard form; and
3.5.3 All other documents and funds required by this Agreement
to be deposited by Seller.
3.6 Closing Conditions. Escrow shall not close until Escrow Holder has
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received everything required by this Agreement and Title Company commits to
issue the Owner's Policy to Buyer and the Lender's Policy to Seller.
3.7 Recordation and Delivery. Upon the close of Escrow, Escrow Holder
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shall cause the Grant Deed and then the Deed of Trust to be recorded in the
Official Records of the County Recorder and then deliver the documents and funds
(less appropriate charges and any required withholding) as provided herein.
Escrow Holder shall promptly provide conformed copies of all recorded documents
to Seller and Buyer. Prior to the close of Escrow, Escrow Holder shall prepare a
Preliminary Change of Ownership Report on the County Assessor's form and deliver
it to Buyer, which Buyer shall sign and return to Escrow Holder prior to close
of Escrow.
3.8 Costs. Costs shall be allocated in the customary manner for
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Southern California transactions. Specifically, Seller shall pay one-half (1/2)
of the Escrow fees, the portion of the Owner's Policy premium equal to the
premium for the standard coverage policy, the documentary transfer tax due upon
recordation of the Grant Deed, and the costs of Seller's other obligations in
this Agreement. Buyer shall pay one-half (1/2) of the Escrow fees, the cost to
record the Grant Deed and Deed of Trust, the costs of the Lender's Policy issued
to Seller, any additional costs for an extended coverage Owner's Policy if so
ordered by Buyer, and the costs of Buyer's other obligations in this Agreement.
3.9 Prorations. Real property taxes and current installments of
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assessments shall be prorated (based on 30 day months and a 360 day year) as of
the close of Escrow for the portion of the Property conveyed herein.
3.10 Termination. If Escrow fails to close due to the default of either
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party, then the non-defaulting party may terminate this Agreement and the Escrow
(without that termination constituting a waiver of the default) and shall
receive all documents and funds deposited by it and shall be entitled to all
appropriate relief at law or in equity, except as may be limited by this
Agreement, and the defaulting party shall pay all Escrow cancellation charges.
If Escrow fails to close for any other reason, then each party shall pay
one-half (1/2) of those charges.
3.11 Commissions. Buyer and Seller each represent and warrant to the
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other that no party has been engaged by it as a broker, agent or finder,
licensed or otherwise, in connection with the transaction contemplated by this
Agreement. If any claim is made for a commission or finder's fee in connection
with the transaction contemplated by this Agreement, then the party upon whose
alleged statement, representation or agreement that claim arises shall
indemnify, defend, protect and hold harmless the other party from and against
all liability, damage and cost (including attorneys' fees) the other party
incurs as a result thereof.
3.12 California Withholding. Escrow Holder shall withhold from
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the Purchase Price all tax withholding amounts required by the California
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Revenue and Taxation Code including, without limitation, 3 1/3% of the Purchase
Price as required by Revenue and Taxation Code Section 18662.]
4. GENERAL PROVISIONS.
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4.1 LIQUIDATED DAMAGES. BY PLACING THEIR INITIALS AT THE END OF THIS
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SECTION, BUYER AND SELLER AGREE THAT: (A) IF BUYER FAILS TO COMPLETE THE
PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT BY REASON OF BUYER'S BREACH
OF THIS AGREEMENT, THEN SELLER'S SOLE AND EXCLUSIVE REMEDY SHALL BE TO TERMINATE
THIS AGREEMENT AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND NOT AS A
PENALTY; AND (B) BECAUSE OF THE NATURE OF TE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT, IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX SELLER'S
ACTUAL DAMAGES IF SUCH A BREACH OCCURS AND THAT THEREFORE THE AMOUNT OF
LIQUIDATED DAMAGES SPECIFIED ABOVE SHALL BE PRESUMED TO BE THE AMOUNT OF DAMAGES
SELLER WOULD SUSTAIN BY REASON OF SUCH A BREACH AND REPRESENTS A REASONABLE
ESTIMATE O THOSE DAMAGES PURSUANT TO CALIFORNIA CIVIL CODE ("CCC") SECTION 1671
THROUGH 1681; AND (C) SELLER WAIVES ALL RIGHTS TO OBTAIN BUYER'S SPECIFIC
PERFORMANCE, INCLUDING WITHOUT LIMITATION THOSE RIGHTS PURSUANT TO CCC SECTIONS
1680 AND 3384 THROUGH 3395.
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BUYER'S INITIALS SELLER'S INITIALS
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4.2 Notices. Any notice, request, demand or other communication given
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or required to be given hereunder ("notice") shall be in writing and personally
delivered, or sent by United States registered or certified mail, return receipt
requested, postage prepaid, or sent by a nationally recognized courier service
such as Federal Express, addressed as follows:
BUYER: Gateway International Holdings, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
WITH A COPY TO: ▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
SELLER: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SELLER: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WITH A COPY TO: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ESCROW HOLDER: At the address on page 1
Delivery of any notice shall be deemed made on the date of its actual
delivery to the address of the addressee, if personally delivered, or the date
indicated in the return receipt or courier's records as the date of (first
attempted) delivery to that address, if sent by mail or courier. Any party may
change its address for notice purposes by giving notice to the other party and
Escrow Holder.
4.3 Cost Recovery. In any action involving Buyer and Seller arising out
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of this Agreement, the prevailing party shall recover from the other party, in
addition to any damages, injunctive or other relief, all costs (whether or not
allowable as "cost" items by law) reasonably incurred at, before and after trial
or on appeal, or in any bankruptcy or collection proceeding, including without
limitation attorneys' and witness (expert and otherwise) fees, deposition costs,
copying charges and other expenses.
4.4 Enforcement by Buyer. Buyer's rights hereunder are of a special and
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unique kind and character and if Seller defaults then Buyer would not have any
adequate remedy at law. Therefore, those rights may be enforced by an action for
specific performance and other equitable relief followed by law.
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4.5 Entire Agreement. This Agreement: (a) is intended by the parties
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as the final expression and the complete and exclusive statement of their
agreement with respect to the terms in this Agreement and any prior or
contemporaneous agreements or understandings, oral or written, which may
contradict, explain or supplement these terms shall not be effective or
admissible; (b) is binding upon and inures to the benefit of the parties and
their successors and assigns; (c) shall be governed by California law; (d) may
not be amended or modified except by a writing signed by the parties which
expressly states that it amends this Agreement; and (e) may be signed in
counterparts.
4.6 Interpretation. Each party and its counsel has reviewed and revised
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this Agreement and any rule of contract interpretation to the effect that
ambiguities or uncertainties are to be interpreted against the drafting party or
the party who caused it to exist shall not be employed in the interpretation of
this Agreement or any document executed in connection herewith.
4.7 Further Assurances. Buyer and Seller shall each promptly sign
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and deliver all additional documents and perform all acts reasonably necessary
to perform its obligations and carry out the intent expressed in this Agreement.
4.8 No Waiver. A waiver by either party of a default by the other
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party is effective only if it is in writing and shall not be construed as a
waiver of any other default.
4.9 Governing Law and Venue. This Agreement shall be enforced an
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interpreted under California's laws and judicial decisions. Any suit or action
relating to this Agreement shall be conducted only in the State Courts of the
State of California, with venue only in the County of Orange. Each party waives
any objection to such jurisdiction or venue, and waives any claim that such
venue is an inconvenient or incorrect forum in which to prosecute such suit or
action.
"BUYER"
Gateway International Holding, Inc.,
a Nevada corporation
By:
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
"SELLERS"
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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The Escrow provided for in the foregoing Agreement is hereby accepted
by Escrow Holder.
Dated:
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Printed Name:
for Escrow Holder
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EXHIBIT "A"
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PROPERTY DESCRIPTION
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That certain real property located in the City of Santa ▇▇▇, State of
California, described as follows:
Parcel 4 as per map filed in Book 162, pages 18 and 19 of Parcel Maps, in the
office of the County Recorder of said County.
Said land is also known as:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT "A"
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A-1
EXHIBIT "B"
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PROMISSORY NOTE
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$600,000
Santa Ana, California June 30, 2003
FOR VALUE RECEIVED, the undersigned, Gateway International Holdings,
Inc. ("Maker") unconditionally promises to pay to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ("Holder"), at addresses reflected in Section 4.2, the sum of Six
Hundred Thousand Dollars ($600,000.00), with interest at the annual rate of six
percent (6%). All accrued interest and principal shall be due and payable in
three (3) annual payments of Two Hundred Thousand Dollars ($200,000.00) each,
together with interest accrued on the unpaid principal balance thereof in
accordance with this note, due on or before June 30, 2004, June 30, 2005, and
June 30, 2006, (each a "Due Date") respectively.
In the event that Maker shall fail to make any payment required
hereunder within ten (10) days following its applicable Due Date, then, an event
of default shall have occurred under this Note. The Holder, upon deliver to
Maker of written notice of such event of default may demand Maker to issue a
number of shares of its common stock, $.001 par value per share ("Common
Stock"), with a fair market value equal to the amount of the defaulted payment,
or may declare the entire Note due and payable and demand Maker to issue a
number of shares of Common Stock equal to the then current outstanding balance
of the Note plus accrued interest. Fair market value of the Common Stock shall
be based upon the closing price of the Maker's Common Stock on the date the
notice of default is delivered to the Maker.
Maker hereby waives presentment, diligence, protest and demand, notice
of protest, dishonor and notice of non-payment and all other notices of a
similar nature. This note: (a) is binding on Maker and Maker's representatives,
successors and assigns; (b) may not be changed orally, but only by an agreement
in writing signed by Maker and Holder; and (c) shall be governed by and
interpreted in accordance with California law. If action is taken to enforce
this note or if an attorney is employed or expenses are incurred to compel
payment of any portion of the indebtedness evidenced by this note, including,
without limitation, appellate, bankruptcy, or collection actions, the prevailing
party shall be entitled to recover its attorneys' fees, costs and expenses
incurred as a result thereof.
The performance of Maker's obligation to issue the Default Shares is
secured by ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ pledge of shares of Maker Common Stock pursuant
to that Pledge Agreement of even date herewith.
"MAKER"
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Gateway International Holdings, Inc.
By: /s/▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
Chief Operations Officer
EXHIBIT "B"
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B-1
EXHIBIT "C"
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PLEDGE AND SECURITY AGREEMENT
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THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is entered into
on the 30th day of June, 2003 by and between ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ( "Pledgor")
and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (collectively the "Pledgees").
R E C I T A L S:
- - - - - - - -
A. The Pledgees and Gateway International Holdings, Inc., a Nevada
corporation ("Gateway") are parties to that certain Stock Purchase Agreement of
even date herewith, pursuant to which Gateway had delivered to the Pledgees a
Promissory Note in the principal amount of $600,000 (the "Note").
B. Pursuant to the terms of the Note, in the event of a default in the
payment of the Note, the Pledgees have the right to require Gateway to issue to
them up to a number of shares of Gateway common stock (the "Common Stock") equal
to the then outstanding balance under the Note (the "Stock Obligation").
C. Pledgor is a controlling shareholder of Gateway, and its Chief
Executive Officer and a director.
D. To induce Pledgees to accept the Note, Pledgor has agreed to grant
to the Pledgee a security interest in 4,285,716 shares (the "Shares") of Gateway
Common Stock to secure Gateway's Stock Obligation under the Note.
NOW, THEREFORE, the parties agree as follows:
1. Creation of Security Interest. Pledgor hereby pledges and grants
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to Pledgee a first priority security interest in the Shares, any securities
issued under the circumstances set forth in Section 9 of this Agreement, and any
proceeds of the foregoing (collectively referred to as the "Collateral").
2. Pledgor Representations and Warranties. Pledgor hereby represents
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and warrants to Pledgees that (a) Pledgor owns the Shares free and clear of all
liens, charges, options, encumbrances, rights or interests of others of any kind
except those created by this Agreement, (b) that Pledgor has the absolute and
unrestricted right, power, authority and capacity, without the consent of any
other person, to pledge the Shares in accordance with the terms of this
Agreement, (c) that the Pledgor will not assign, sell, transfer, pledge or
hypothecate, or otherwise dispose of, or encumber or permit any lien on the
Shares, without prior written notice to and consent of the Pledgees, and (d)
that there are no restrictions on the voting of the Shares or transfer of the
Shares, except as may be imposed by federal or state securities laws.
3. Purpose. The security interest created by this Agreement secures
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only Gateway's performance of the Stock Obligation.
4. Term of Pledge. This Agreement shall continue, and Pledgees shall
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retain possession of and its security interest in the Collateral, until (a)
Pledgor's payment in full of all amounts due under or by virtue of the Note.
Upon termination of the security interest granted herein, the Pledgees shall
promptly deliver the Collateral to the Pledgor and execute and deliver any
documents reasonably requested by the Pledgor in order to adequately evidence
the termination of such security interest. During the term of this Agreement,
the Pledgees shall safeguard the Collateral from theft or physical destruction.
EXHIBIT "C"
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C-1
5. Delivery of Certificates. Concurrently with the execution of this
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Agreement, Pledgor shall deliver or cause to be delivered to Pledgees the
certificate or certificates representing the Shares, duly endorsed in blank or
accompanied by a stock assignment executed in blank, in form sufficient to
permit Pledgee to vest good and marketable title in itself or in any third
party. Upon the issuance of any securities under the circumstances specified in
Section 9 of this Agreement, Pledgor shall deliver the certificates or other
instruments evidencing such securities to Pledgee in the same manner as the
Shares.
6. Default. The occurrence of the following event shall constitute a
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default under this Agreement:
(a) failure of Gateway to issue to the Pledgees shares of
Gateway's common stock within five (5) days after receipt of written demand for
such issuance delivered following Gateway's default under the Note, which
default was not cured within the time required.
7. Pledgee's Remedies. Upon default as specified in Section 6,
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Pledgees may, at their option, exercise any one or more of the following rights:
(a) cause the Collateral to be transferred on the books of the
issuer thereof to the name of Pledgees or any other person, persons, entity or
entities designated by Pledgee;
(b) vote the Collateral in accordance with Section 12;
(c) exercise its rights and remedies under the California
Commercial Code as a secured creditor having a security interest in the
Collateral, and in particular, sell all or any part of the Collateral at one or
more public or private sales to be conducted in Orange County, California, on at
least thirty (30) days' prior notice and otherwise in a commercially reasonable
manner and upon reasonable terms and conditions, taking into account all the
circumstances including any restrictions on subsequent transfers of the
Collateral that may be necessary to ensure compliance with state or federal
securities laws; and
(d) exercise any and all further rights or remedies of Pledgees
under the California Commercial Code or other applicable law.
Pledgees shall not be required to make any demand upon or pursue or exhaust any
of their rights or remedies against the Pledgor, or to pursue or exhaust any of
its rights or remedies against any guarantor. Pledgees shall not be required to
▇▇▇▇▇▇▇▇ the Collateral, and Pledgor hereby waives, to the extent permitted by
applicable law, any right to prior notice or judicial hearing in connection with
Pledgees' possession or disposition of the Collateral and any right to prior
notice of and hearing for any pre-judgment remedy. To the extent permitted by
law, Pledgor hereby waives all requirements for the exercise of any of Pledgees'
remedies other than those provided in this Agreement. Pledgees shall be entitled
to enforce any of the remedies in this section successively or concurrently. The
enforcement of any remedy provided in this section shall not prejudice the right
of Pledgees to pursue any other or further remedy that they may have.
EXHIBIT "C"
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C-2
Pledgor recognizes that Pledgees may desire to effect one or more
private sales to avoid the delays and uncertainty surrounding the registration
process. Pledgor therefore agrees that if, at any time when Pledgees shall
determine to exercise their right to sell all or part of the Collateral pursuant
to this Section 7, (i) the Collateral shall not be effectively registered under
the Securities Act of 1933 as then in effect, and (ii) a public sale thereof
shall not be exempt from such registration in the opinion of Pledgees' counsel,
then Pledgees may, in their sole and absolute discretion, sell the Collateral by
private sale in such manner and in such circumstances as they may deem
reasonably necessary or advisable to effect such sale without such registration,
and that such private sale shall be commercially reasonable. Without limiting
the generality of the foregoing, in the event of any such private sale Pledgees
may, in their sole and absolute discretion, (i) approach and negotiate with a
single possible purchaser to effect such sale, and (ii) restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to a distribution or sale of
such securities. In the event of any such private sale, the Pledgor hereby
agrees that Pledgees shall incur no responsibility for selling all or part of
the Collateral at a private sale, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.
8. Disposition of Proceeds of Sale of Collateral. Pledgees may retain
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from the proceeds of any sale of the Collateral provided for in Section 7 an
amount sufficient to pay any and all amounts due Pledgees under the Note or this
Agreement, together with all costs and expenses of preparing for, promoting,
conducting and closing the sale, including reasonable attorneys' fees. Pledgees
shall then pay any balance of the proceeds to Pledgor, except as otherwise
provided by law, subject to the rights of the holder of any then existing lien
of which Pledgees has notice.
9. Reorganization; Changes in or Additions to Collateral; Stock
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Options. During the term of this Agreement any stock dividend, reclassification,
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readjustment, reorganization, merger, consolidation or other change in capital
or corporate structure (including any distribution of securities) declared or
made in or by the issuer of the Shares, and any substituted or additional
securities issued with respect to the Collateral shall immediately be endorsed
in blank by Pledgor and delivered to Pledgees or their designee to be held under
the terms of this Agreement in the same manner as the Shares. If during the term
of this Agreement (a) any warrants, options or other rights are issued with
respect to the Collateral, or (b) any warrants, options or other rights to
acquire common stock of the issuer are issued to Pledgor, then any securities
acquired by Pledgor upon his exercise of such rights shall immediately be
endorsed in blank and delivered to Pledgees or their designee to be held under
the terms of this Agreement in the same manner as the Shares.
10. Estoppel or Waiver. In addition to the specific provisions of
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Section 7, Pledgees shall have the right to exercise or to refrain from
exercising any rights, powers or remedies under the Note or this Agreement
successively or concurrently, and this shall not operate to estop or prevent
Pledgees from exercising any further or additional right, power or remedy they
may have. No act or failure to act on the part of Pledgees under this Agreement
shall be deemed or construed to be a waiver of or an election with respect to
any right, power or remedy Pledgees have under this Agreement or the Note, or
that may otherwise be available to Pledgees.
11. Further Cooperation. Pledgor agrees that upon reasonable request by
-------------------
Pledgees, Pledgor will promptly execute and deliver any documents, including any
stock assignments, and take all additional actions reasonably deemed necessary
or desirable by Pledgee to effect the purposes of this Agreement.
12. Voting Rights. So long as the Pledgors shall not be in default
--------------
under this Agreement, Pledgor shall retain the right to vote the Shares on all
matters throughout the term of this Agreement, provided that Pledgor shall not
vote in favor of any "reorganization" without Pledgees' prior written consent.
Upon the occurrence of any default under this Agreement, Pledgees shall be
entitled to vote the Collateral or to direct the manner in which it is voted,
whether or not the Collateral has been transferred on the books of the issuer to
Pledgees or their nominee.
EXHIBIT "C"
-----------
C-3
13. Security Interest Absolute. All rights of Pledgees and security
---------------------------
interests hereunder, and all obligations of the Pledgor hereunder, shall be
absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of the Note or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
term of, all or any of the Stock Obligation or any other amendment or waiver of
or any consent to any departure from the Note or any related agreement;
(c) any exchange, release or non-perfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for any and all of the Stock Obligation; or
(d) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Stock Obligation
or this Agreement.
14. Dividend Rights. Upon the occurrence of an event of default,
----------------
Pledgees shall be entitled to receive all dividends in cash or property declared
on the Shares.
15. Severability. If any provision of this Agreement is determined to
------------
be invalid or unenforceable, all of its other provisions shall nevertheless
remain in full force and effect.
16. Attorneys' Fees. In the event that any party shall bring an action
---------------
or arbitration in connection with the performance, breach or interpretation
hereof, then the prevailing party in such action, as determined by the court or
other body having jurisdiction, shall be entitled to recover from the losing
party in such action, as determined by the court or other body having
jurisdiction, all reasonable costs and expenses of litigation or arbitration,
including reasonable attorneys' fees, court costs, costs of investigation and
other costs reasonably related to such proceeding, in such amounts as may be
determined in the discretion of the court or other body having jurisdiction.
17. Notices. All notices, requests and other communications required
-------
or permitted under this Agreement shall be in writing and may be delivered
personally, sent by first class mail, postage prepaid or by facsimile and
addressed as follows:
To Pledgor: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Pledgees: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile:
-------------
Any notice, request or other communication under this Agreement shall be
effective when received by the addressee, but if sent by registered or certified
mail postage prepaid and addressed as provided above, it shall be effective
exactly three (3) business days after deposit in the United States mail. The
parties may change their addresses as listed above by giving notice of the new
address to the other party in conformity with this section.
EXHIBIT "C"
-----------
C-4
18. Binding Upon Successors. This Agreement shall inure to the benefit
------------------------
of and be binding upon the successors and assigns of the parties.
19. Entire Agreement. This Agreement constitutes the parties entire
----------------
understanding with respect to the subject matter hereof, and supersedes all
prior and contemporaneous written and oral understandings and agreements.
20. Captions. The captions accompanying each section of this Agreement
--------
are for convenience only and shall not be deemed part of the context of this
Agreement.
21. Governing Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of California.
22. Counterparts. This Agreement may be executed in two or more fully
------------
or partially executed counterparts, including electronically transmitted
counterparts, each of which shall be deemed an original, but all counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year first above written.
"PLEDGOR" "PLEDGEES"
/s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
EXHIBIT "C"
-----------
C-5
EXHIBIT "D"
-----------
GRANT DEED
-----------
Order No. |
Escrow No. |
Loan No. |
WHEN RECORDED MAIL TO: |
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. |
▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP |
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ |
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ |
--------------------------------------- ---------------------------------------
DOCUMENTARY TRANSFER TAX SPACE ABOVE THIS LINE FOR RECORDER'S USE
$
----------------------
......Computed on the consideration or value of property conveyed;
OR
----------------------------------------
......Computed on the consideration Signature of Declarant or Agent
or value less liens or encumbrances determining tax -Firm Name
remaining at time of sale
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
hereby
------------------------ ------------------------------------------
GRANT(S) to Gateway International Holdings, Inc. the real property in the City
of Santa ▇▇▇, County of Orange, State of California, described on attached
Exhibit "1" which is incorporated hereby this reference.
Dated
--------------------------- ------------------------------
STATE OF )
------------------------------) ------------------------------
)
COUNTY OF ----------------------------- ------------------------------
On before
--------------------------------------------------
me,
-----------------------------------------------
personally appeared
-------------------------------
personally know to me (or proved to me
on the basis of satisfactory evidence) (This area for official notarial seal)
to be the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the
instrument the person(s) or the entity
upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature:
--------------------------------------
EXHIBIT "D"
-----------
D-1
EXHIBIT "1" TO GRANT DEED
-------------------------
LEGAL DESCRIPTION OF THE PROPERTY
---------------------------------
That certain real property located in the County of Orange, State of California,
described as follows:
Parcel 4 as per map filed in Book 162, pages 18 and 19 of Parcel Maps, in the
office of the County Recorder of said County.
Said land is also known as:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT "D"
-----------
D-2