LOAN AGREEMENT
This Loan Agreement ("Agreement") is entered into on September 6th,
2011 by between Envision Solar International, Inc., a Nevada corporation (the
"Borrower"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual (the "Lender"). Certain
capitalized terms used herein are defined on Exhibit A of this Agreement.
The parties agree as follows:
1. LOAN.
(a) LOAN. Subject to the terms and conditions hereof, the
Lender shall make a loan (the "Loan") to Borrower in the principal sum of
$1,000,000. The Loan shall be evidenced by a Convertible Promissory Note issued
by the Borrower to the Lender at the Closing (as defined below) in the form of
Exhibit B hereto (the "Note").
(b) INTEREST. The Note and all other monetary Obligations
shall bear interest at 9% per annum. Interest shall be payable in arrears on the
Maturity Date as defined in this Agreement. Any interest not paid when due shall
be added to the principal and shall thereafter bear like interest as the
principal of the Note. Interest accruing after the Maturity Date shall be
compounded annually, without waiving any rights or remedies of the Lender by
reason of the failure to pay the same when due.
(c) MATURITY DATE. Unless the Note is earlier converted into
equity securities of the Borrower as provided in the Note, on December 31, 2012
(the "Maturity Date"), the entire outstanding principal balance of the Note and
all accrued and unpaid interest thereon and all other monetary Obligations shall
be due and payable.
(d) PAYMENTS. For all purposes of this Agreement, any payments
by Borrower will only be deemed received when received in immediately available
funds, and any immediately available funds received later than 5:00 p.m.
(California time) on any Business Day shall be deemed to have been received on
the following Business Day and any applicable interest or fee shall continue to
accrue during such period.
(e) PREPAYMENT. The Borrower may at any time after 180 days of
the execution of this note prepay all or any portion of the outstanding balance
of the Note by giving at least three days prior notice to the Lender of the
prepayment date. The Borrower shall pay to the Lender all or any portion of the
outstanding principal and accrued interest due on this Note or shall, to the
extent of the prepayment and if agreed in writing by the Lender, issue and
deliver to the Lender a certificate representing a number of shares of the
Borrower's common stock (the "Shares") into which such Note is convertible as of
the prepayment date. The Borrower shall not, however, be obligated to make such
payment or issue such Shares unless the Lender has delivered its original Note
to Borrower or has notified Borrower that such Note has been lost, stolen or
destroyed and executes an agreement satisfactory to Borrower to indemnify
Borrower from any loss incurred by it in connection with such lost, stolen or
destroyed Note. The Lender shall have the right to exercise all of its rights
under the Note, and interest shall continue to accrue, until payment in full is
made hereunder, or the Note is converted into Shares as provided in the Note.
The Note will be deemed converted on the date of written notice of election to
convert, regardless of when the actual Note is submitted by the Lender for
cancellation.
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(f) CONVERSION. All or any portion of the entire outstanding
balance of this Loan and the Note is convertible into Shares of Borrower's
common stock in accordance with the terms and conditions of the Note and this
Agreement.
2. REPRESENTATIONS AND WARRANTIES. Borrower represents to the Lender as
of Closing Date (and the following representations shall be deemed continuing
until the time set forth in Section 15 of this Agreement):
(a) AUTHORIZATION; SUBSIDIARIES.
(i) Borrower is and will continue to be duly
organized, validly existing and in good standing under the
laws of the State of Nevada, and Borrower is and will continue
to be qualified and licensed to do business in all
jurisdictions in which any failure to do so would result in a
Material Adverse Change. The execution, delivery and
performance by Borrower of this Agreement, and all other
documents contemplated hereby have been duly and validly
authorized by all necessary corporate action, and do not
violate Borrower's Articles of Incorporation or Bylaws, or, in
any material respect, any law or any material agreement or
instrument which is binding upon Borrower or its property.
This Agreement and the Note are, or when executed and
delivered will be, valid and binding obligations of Borrower
enforceable in accordance with their respective terms, except
as the same may be limited by equitable principles and by
bankruptcy, insolvency, moratorium and other laws of general
application affecting the enforcement of creditors' rights.
The reservation for potential issuance of the Shares pursuant
to the terms of this Agreement and the Note has been approved
by the Borrower's Board of Directors.
(ii) Borrower has one wholly-owned subsidiary,
Envision Construction, Inc. Borrower's correct name is set
forth in the heading of this Agreement and if Borrower
hereafter gives the Lender written notice within 15 days after
any future change in Borrower's name, this representation
shall not be deemed to be breached. True and correct copies of
the Borrower's Articles of Incorporation and Bylaws have been
delivered to the Lender.
(b) FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial
statements delivered to Lender have been prepared in conformity with generally
accepted accounting principles (except for the absence of footnotes and subject
to normal year-end adjustments with respect to unaudited financial statements,
and except in the case of projections or forecasts, which Borrower represents
and warrants have been be prepared in good faith utilizing assumptions it
believes to be reasonable). All financial statements delivered to the Lender
fairly reflect the financial condition of Borrower, at the times and for the
periods therein stated.
(c) TAX RETURNS AND PAYMENTS. Borrower has timely filed, and
will timely file, all tax returns and reports required by applicable law, and
Borrower has timely paid, and will timely pay, all applicable taxes,
assessments, deposits and contributions now or in the future owed by Borrower.
Borrower may, however, defer payment of any contested taxes, provided that
Borrower (i) in good faith contests Borrower's obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, and
(ii) notifies the Lender in writing of the commencement of, and any material
development in, the proceedings.
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(d) COMPLIANCE WITH LAW. To Borrower's knowledge, Borrower has
complied, and will comply, in all material respects, with all provisions of all
applicable laws and regulations, including, but not limited to, those relating
to Borrower's ownership of real or personal property, the conduct of Borrower's
business, and all environmental matters, except where the failure to do so would
not result in a Material Adverse Change.
(e) LITIGATION. There is no claim or litigation pending or (to
Borrower's knowledge) threatened against Borrower, except as disclosed in its
SEC Reports and additionally, a arbitration notice given to Envision related to
a debt owed to a legal firm for past services. There is no action, proceeding or
investigation pending, or to Borrower's knowledge threatened, against the
Borrower or its officers or directors, or to the knowledge of Borrower, against
employees or consultants of Borrower, or any basis therefore known to Borrower,
involving the prior employment of any of the Borrower's employees, their use in
connection with the Borrower's business of any Intellectual Property of their
former employers, or their obligations under any agreements with prior
employers, which individually or in the aggregate could result in a Material
Adverse Change.
(f) INFORMATION. All information provided to the Lender by or
on behalf of Borrower by a duly authorized officer on or prior to the date of
this Agreement is true and correct in all material respects, all information
hereafter provided to the Lender by or on behalf of Borrower by a duly
authorized officer will be true and correct in all material respects, and no
representation or other statement made, previously, now or hereafter, to the
Lender by or on behalf of Borrower by a duly authorized officer contains or will
contain, at the time made, any untrue statement of a material fact or omits or
will omit, at the time made, any material facts necessary to make any statements
made to the Lender not misleading at the time made. For the purpose of this
paragraph, "information" means written information that (i) relates to any
material aspect of Borrower's business, operations or financial condition or
(ii) which is provided by the Borrower to the Lender pursuant to this Agreement,
except for the financial projections contained therein, which projections are
subject to Section 2(b) of this Agreement.
3. INTELLECTUAL PROPERTY. Borrower is the sole and exclusive owner of
all right, title and interest in and to all Intellectual Property necessary for
its business as now conducted and as proposed to be conducted without any
conflict with, or infringement with the rights of, others. The Borrower has not
received any communications alleging that it has violated or, by conducting its
business as proposed, would violate any Intellectual Property of any other
Person. Borrower is not aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use of such employee's best
efforts to promote the interest of Borrower or that would conflict with
Borrower's business as proposed to be conducted. Neither the execution or
delivery of this Agreement, nor the carrying on of the Borrower's business as
proposed, will, to the Borrower's knowledge after due inquiry, conflict with or
result in a breach of the terms, conditions, or provisions of, or constitute a
default under, any contract, covenant or instrument under which any such
employee is now obligated. Borrower does not believe it is or will be necessary
to use any inventions of any of its employees (or persons it currently intends
to hire) made prior to their employment by Borrower. Borrower is not aware of
any violation or infringement by a third party of any of its Intellectual
Property. USE OF PROCEEDS.
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Borrower will use the proceeds of the Loan for general operating
purposes with particular emphasis on the operating capital requirements of the
execution of the contracts to deploy 15 Solar Tree(R) structures,
CleanCharge(TM) EV Charging, EnvisionTrack(TM) at Pier Lima in San Diego for the
US Navy and to deploY 6 Solar Tree(R) structures, CleanCharge(TM) EV Charging,
EnvisionTrack(TM) and battery storage for San Diego Gas aNd Electric in San
Diego as well as adding business development resources to help in the growth of
the business and shall not in any event use such proceeds for investment
activities.
4. CLOSING.
(a) CLOSING DATE. The closing of the Loan (the "Closing") will
take place at the offices of Envision Solar International at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ at 1:00 p.m. (local time) on the date that the
parties may mutually agree in writing, but in no event later than as of
September 10th, 2011 (the "Closing Date"), unless extended by mutual written
agreement of the parties.
(b) DELIVERY. Subject to the terms of this Agreement, at the
Closing the Borrower will deliver an executed Note to the Lender against payment
of the purchase price therefore by, at the option of the Lender, a check or
checks payable to the order of the Company or by wire transfer.
(c) CONDITIONS TO THE LENDER'S OBLIGATIONS. The obligation of
the Lender to make its Loan at the Closing is subject to the fulfillment to its
satisfaction, on or prior to the ClOSING DATE, OF THE FOLLOWING CONDitions, any
of which may be waived by the Lender in writing:
(i) REPRESENTATIONS AND WARRANTIES CORRECT;
PERFORMANCE OF OBLIGATIONS. The representations and warranties
made by the Borrower in Section 2 hereof shall be true and
correct on and as of the Closing Date. Borrower shall have
performed all Obligations and conditions herein required to be
performed or observed by it on or prior to the Closing Date.
(ii) CONSENTS AND WAIVERS. Borrower shall have
obtained in a timely fashion any and all consents, permits,
and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement and the same shall
be effective as of the Closing Date.
5. EVENTS OF DEFAULT. Any one or more of the following shall constitute
an event of default ("Event of Default") under the Loan Documents:
(a) Borrower shall fail to pay any principal of or interest on
the Loan or any other monetary Obligations within five Business Days after the
date due; or
(b) Borrower shall fail to comply with or perform any other
provision of this Agreement, the Loan Documents or any other non-monetary
Obligation, which failure is not cured within ten Business Days after such
failure occurs; or
(c) Borrower shall breach any of Borrower's representations or
warranties, contained in this Agreement, or any Loan Document, which breach is
not cured within ten Business Days after such breach occurs; or
(d) Dissolution, termination of existence, or insolvency of
Borrower; or appointment of a receiver, trustee or custodian, for all or any
material part of the property of, assignment for the benefit of creditors by, or
the commencement of any proceeding by or against Borrower under any
reorganization, bankruptcy, insolvency, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, now or in the
future in effect (except that, in the case of a proceeding commenced against
Borrower, Borrower shall have 30 days after the date such proceeding was
commenced to have it dismissed).
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6. REMEDIES.
(a) REMEDIES. Upon the occurrence and during the continuance
of any Event of Default, the Lender may (at its option), without notice except
for such notices as are required by law and as provided in this Agreement,
accelerate and declare the Note and the other Obligations to be immediately due,
payable, and performable, notwithstanding any deferred or installment payments
allowed by any instrument evidencing or relating to any Obligation.
(b) SET-OFF. Upon the occurrence and during the continuance of
any Event of Default, the Lender is hereby authorized at any time and from time
to time, without notice to the Borrower (any such notice being expressly waived
by the Borrower, except as expressly set forth below), to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by the Lender to or for
the credit or the account of the Borrower against any and all of the
Obligations, irrespective of whether or not the Lender shall have made any
demand under this Agreement or the Lender's Note, and although such Obligations
may be unmatured. The Lender agrees promptly to notify the Borrower after any
such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Lender may
have.
(c) REMEDIES CUMULATIVE. Exercise or partial exercise by the
Lender of one or more of such rights or remedies shall not be deemed an
election, nor bar the Lender from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of the Lender to exercise any
such rights or remedies shall not operate as a waiver thereof, but all such
rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed. No Event of Default or exercise
of rights or remedies as a result thereof shall affect the Lender's other rights
under this Agreement, all of which shall continue in full force and effect.
7. WAIVERS AND AMENDMENTS.
(a) The failure of the Lender at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and the Lender shall not
waive or diminish any right of the Lender later to demand and receive strict
compliance with such provisions. Any waiver of any default shall not waive or
affect any other default, whether prior or subsequent, and whether or not
similar.
(b) Borrower waives demand, protest, notice of protest and
notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, general intangible, document or guaranty at any time held
by the Lender on which Borrower is or may in any way be liable, and notice of
any action taken by the Lender, unless expressly required by this Agreement.
8. INDEMNITY. If either the Lender or Borrower files any lawsuit
against the other predicated on a breach of this Agreement, the prevailing party
in such action shall be entitled to recover its reasonable costs, including (but
not limited to) reasonable attorneys' fees incurred in connection with such
action. Borrower shall indemnify the Lender for any losses, claims, actions,
causes of action, penalties, and reasonable costs and expenses (including
reasonable attorneys' fees), which the Lender may sustain or incur based upon,
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arising out of, or relating to a breach by the Borrower of this Agreement, any
of the Obligations or the Loan Documents, except any such amounts sustained or
incurred as the result of the gross negligence or willful misconduct of the
person to be indemnified or any of its directors, officers, employees, agents,
attorneys, or any other person affiliated with or representing such person. The
indemnity agreement set forth in this Section shall survive any termination of
this Agreement and shall continue in full force and effect.
9. CONFIDENTIALITY. In handling any confidential non-public information
provided to the Lender by Borrower, the Lender shall exercise the same degree of
care that it exercises with respect to its own proprietary information to
maintain the confidentiality of the same, except that disclosure of such
information may be made (i) to Affiliates of the Lender, or to prospective
transferees or purchasers of any interest in the Obligations, provided that they
have entered into a comparable confidentiality agreement with respect thereto,
(ii) as required by law, regulations, rule or order, subpoena, judicial order or
similar order (provided that, in the case of a subpoena, judicial order or
similar order, the Lender shall, if practical, give written notice thereof to
the Borrower so that Borrower may take appropriate action to prevent such
disclosure if it wishes), and (iv) as may be commercially reasonable in
connection with the exercise of any remedies by Lender under this Agreement.
Confidential information hereunder shall not include information that either:
(a) is in the public domain, or becomes part of the public domain through no
fault of the Lender; or (b) is disclosed to the Lender by a third party, which
does not have a duty of confidentiality to the Borrower.
10. NOTICES.
(a) All notices under this Agreement shall be in writing and
shall be deemed to have been given (a) upon receipt, when delivered by hand or
by electronic facsimile transmission or email if sent during normal business
hours and, if not, then the next Business Day, or (b) upon receipt, when
delivered by overnight courier, or (c) five days after mailing by certified mail
return receipt requested, addressed to each party at the addresses indicated
below their signatures below.
(b) NOTICES OF RECORD DATE. If the Borrower shall propose at
any time:
(i) to declare any distribution upon its shares of
common stock;
(ii) to effect any reclassification or
recapitalization of its shares of common stock; or
(iii) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all
its property or business, or to liquidate, dissolve or wind
up;
then, in connection with each such event Borrower
shall send to the Lender:
(1) at least ten (10) days' prior written
notice of the date on which a record shall be taken
for such distribution (and specifying the date on
which the holders of Shares shall be entitled
thereto); and
(2) in the case of the matters referred to
in (ii) and (iii) above, at least ten (10) days'
prior written notice of the date when the same shall
take place (and specifying the date on which the
holders of Shares shall be entitled to exchange their
Shares for securities or other property deliverable
upon the occurrence of such event).
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11. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE LENDER.
(a) The Lender represents and warrants to Borrower as of
Closing Date and as of the date the Lender acquires Shares, if it acquires
Shares, as follows:
(1) It has full power and authority and has taken all
required action necessary to permit it to execute and deliver
and to carry out the terms of this Agreement and all other
documents or instruments required by this Agreement.
(2) It is its present intention to acquire the Note
and the Shares for its own account and that its Note and the
securities into which the Note is convertible (together, its
"Securities") are being or will be acquired by it for the
purpose of investment and not with a view to distribution. The
Lender agrees that it will not sell or transfer any of its
Securities without registration under applicable federal and
state securities laws, or the availability of exemptions
therefrom. The Lender agrees that the documents evidencing the
Securities will each bear a restrictive legend stating that
the Securities represented thereby have not been registered
under applicable federal and state securities laws and
referring to restrictions on their transferability and sale.
(3) It is an "accredited investor" (as defined in
Rule 501(a) under the Securities Act) and it acknowledges that
it currently has, and had immediately prior to its Loan
hereunder, such knowledge, sophistication and experience in
financial and business matters that it is capable of
evaluating the merits and risks of this investment and further
acknowledges that it is able to bear the economic risk of this
investment for an indefinite period of time. During the course
of this transaction and prior to the sale to the Lender of the
Note hereunder, it acknowledges that it had the opportunity to
ask questions of, and receive answers from, management of the
Borrower concerning the terms and conditions of this
investment and to obtain any additional information of the
same kind that is specified in Rule 502 of Regulation D of the
Securities Act, or that is necessary to verify the accuracy of
the other information obtained. It has received such
information as it deems necessary to enable it to make its
investment decision. In particular, Lender has carefully
reviewed all of Borrower's SEC Reports and the risk factors
and other information furnished to the Lender by the Borrower
supplementally. Lender further acknowledges that Allied Beacon
Partners, Inc., a registered broker-dealer with the Financial
Industry National Regulatory Association ("FINRA"), will earn
a selling commission in the form of cash and equity in
connection with the Lender's Loan to the Borrower.
(b) RESTRICTIONS ON DISPOSITION. Without in any way limiting
the representations set forth in Section 11(a) above, during the period from the
Closing Date until the second anniversary of the Closing Date, the Lender
further agrees not to make any disposition of all or any portion of the Shares
without the prior written approval of the Borrower, provided that such prior
written approval of the Borrower shall not be required (i) for transfers or
sales where the number of Shares being conveyed do not exceed, in any single
day, fifteen percent (15%) of the daily average volume of such prior week sales
as reported by such applicable exchange , (ii) for transfers to Affiliates of
the Lender, or (iii) if the Borrower has breached a material obligation under
this Agreement. Certificates evidencing the Shares will bear an appropriate
legend reflecting such restrictions on transfer.
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(c) LOCK-UP PROVISION. Upon receipt of a written request by
Borrower's underwriters, the Lender shall not sell, sell short, grant an option
to buy, or otherwise dispose of any of the Securities (except for any such
Securities included in the registration) for a period of up to one hundred and
eighty (180) days following the effective date of a registration of the
Borrower's securities; provided, however, that the Lender shall have no
obligation to enter into the agreement described in this Section 11(c) unless
all executive officers and directors of Borrower and all other holders of other
registration rights from Borrower enter into similar agreements. Borrower may
impose stop-transfer instructions with respect to the Securities subject to the
foregoing restriction until the end of said maximum 180-day period.
12. GOVERNING LAW. This Agreement and all acts and transactions
hereunder and all rights and obligations of the Lender and Borrower shall be
governed by the internal laws of the State of California.
13. GENERAL. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect. This Agreement and such other written agreements, documents and
instruments as may be executed in connection herewith are the final, entire and
complete agreement between Borrower and the Lender, and supersede all prior and
contemporaneous negotiations and oral representations and agreements, all of
which are merged and integrated in this Agreement. There are no oral
understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the parties
in connection with this Agreement. Subject to Section 11(b), the Lender may
assign all or any part of its interest in the Note and this Agreement and the
Obligations to any person or entity, or grant a participation in, or security
interest in, any interest in this Agreement or the Note, without notice to, or
consent of, Borrower. Borrower may not assign any rights under or interest in
this Agreement without the Lender's prior written consent. This Agreement shall
be binding upon, and inure to the benefit of, the respective parties' heirs,
executors, administrators, assigns and successors. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original,
but all of which shall constitute one agreement.
14. TERMINATION OF CERTAIN PROVISIONS. All representations in Section 2
shall cease to be continuing on the date the entire Note is paid in full or
converted into Shares.
15. SURVIVAL. The representations, warranties and covenants of Borrower
and the Lender contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement, any Closing Date, and any conversion
of the Note into Shares for so long as the applicable statute of limitations.
IN WITNESS WHEREOF, this Agreement has been entered into as of the date
first above written.
LENDER: BORROWER:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ENVISION SOLAR INTERNATIONAL, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------- ----------------------------------------
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
Address for notices: Address for notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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EXHIBIT A
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the following meanings:
1. "Affiliate" means as to any Person, any other Person who directly or
indirectly controls, is under common control with, is controlled by or is a
director or officer of such Person. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common control
with") means possession, directly or indirectly, of the power to direct or cause
the direction of management or policies (whether through ownership of voting
securities or partnership or other ownership interests, by contract or
otherwise), provided that, in any event, any Person who owns directly or
indirectly ten percent (10%) or more of the securities having ordinary voting
power for the election of the members of the board of directors or other
governing body of a corporation, limited liability company or partnership or
other ownership interests of any other Person will be deemed to control such
corporation, limited liability company, partnership or other Person.
2. "Business Day" means any day other than a Saturday, Sunday or any
other day on which commercial banks in Los Angeles, California are required or
permitted by law to close.
3. "Intellectual Property" means all (a) copyrights, copyright rights,
copyright applications, copyright registrations and like protections in each
work of authorship and derivative work thereof, whether published or
unpublished, (b) trade secret and proprietary rights, including all rights to
unpatented inventions and know-how, and confidential information; (c) mask work
or similar rights available for the protection of technology; (d) patents,
patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) trademarks, service marks, trade styles,
and trade names, whether or not any of the foregoing are registered, and all
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Borrower connected with and symbolized by
any such trademarks; (f) computer software and computer software products; (g)
designs and design rights; (h) technology; (i) all claims for damages by way of
past, present and future infringement of any of such rights; and (j) all
licenses or other rights to use any property or rights of a type described above
in this definition.
4. "Loan Document" means any present or future document, instrument or
agreement relating to this Agreement, including without limitation the Note.
5. "Material Adverse Change" means (i) any effect that is materially
adverse to the scope of Borrower's business, or to the results of operations,
assets, liabilities or financial or other condition of Borrower or (ii) the
material impairment of Borrower's ability to perform its Obligations or of
Lender's ability to enforce the Obligations.
6. "Obligations" mean any amounts owed by the Borrower to the Lender
under any of the Loan Documents.
7. "Person" means any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
joint stock company, association, corporation, institution, entity, party or
government (including any division, agency or department thereof) or any other
legal entity, whether acting in an individual, fiduciary or other capacity, and,
as applicable, their successors, heirs and assigns.
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8. "Publicly Traded" means that the Borrower's shares of common stock
are listed and trading on the OTC Bulletin Board, the Nasdaq Stock Market, or a
national securities exchange or public securities trading market.
9. "SEC Reports" means all reports, financial statements and other
information and disclosures filed by the Borrower with the United States
Securities and Exchange Commission.
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EXHIBIT B
Convertible Promissory Note
EXHIBIT C
Exceptions
2. (a) List of wholly-owned or partially owned subsidiaries,
partnerships or joint ventures of or with the Company: See SEC
Reports.
2. (b) Liabilities of the Company: See SEC Reports
2. (e) List of legal claims or litigation pending or (to Borrower's
knowledge) threatened against Borrower: See SEC Reports.