ADDITIONAL BRIDGE LOAN AGREEMENT
This Additional Bridge Loan Agreement is made as of May 28, 1998
between Cavion Technologies, Inc., a Colorado corporation formerly known
as Sigmacom Corporation (the "Company"), and the investors listed on the
SCHEDULE OF ADDITIONAL INVESTORS attached hereto (the "Additional
Investors").
Management of the Company is now investigating the potential for a
new equity investment or sale of the Company, but will not be able to
complete any such transaction without an immediate infusion of short-term
working capital. In order to provide for this need, the Additional
Investors and the Company are now entering into a bridge loan in the
aggregate amount of $130,000, and related transactions, on the terms of
this Agreement.
The Company has also entered into a similar bridge loan with British
Far East Holdings Ltd., Xxxxxx Xxxxxx, and Fairway Realty Associates in
the aggregate amount of $150,000. The Company is also anticipating
possible additional bridge loans by others who are presently shareholders
of the Company (the "Other Shareholder Investors") in the amount of not
more than $50,000 for each such Other Shareholder Investor (in each case,
with the purchase of nonvoting shares with put). There is no assurance
that any Other Shareholder Investor will make any such additional bridge
loan, and the obligations of the Company and the Additional Investors
under this Bridge Loan and the instruments and agreements contemplated
herein are not conditioned upon the making of any such additional bridge
loan.
In consideration of the mutual covenants contained in this Agreement,
it is agreed as follows:
1. INITIAL BRIDGE TRANSACTION. Concurrently with execution of this
Agreement, each Additional Investor will deliver to the Company funds
equal to the Loan Amount listed on the Schedule of Additional
Investors, plus (as consideration for purchase of the Shares) funds
equal to $0.01 times the Share Amount listed on the Schedule of
Additional Investors. Upon receipt of the funds, the Company will
issue to each Additional Investor:
(a) a Senior Promissory Note in the form attached as EXHIBIT A
(which, with any notes on substantially the same terms that may
be issued to any or all of the Additional Investors or the Other
Shareholder Investors under bridge loan agreements on
substantially the same terms as contained in this Agreement, are
herein called the Senior Notes, in a principal amount equal to
the Loan Amount listed on the Schedule of Additional Investors;
(b) a number of shares of the nonvoting common stock, par value
$0.01 per share, of the Company (the "Shares") equal to the
Share Amount listed on the Schedule of Additional Investors; and
(c) a Put Agreement in the form attached as EXHIBIT B.
2. ADDITIONAL BRIDGE TRANSACTION. Each Additional Investor acknowledges
and agrees that British Far East Holdings Ltd., Xxxxxx Xxxxxx, and
Fairway Realty Associates have participated in a similar bridge loan
and that one or more or all of the Other Shareholder Investors may
participate in additional bridge loans to the Company (and the
purchase of nonvoting shares with put) on terms essentially
equivalent to those herein extended to the Additional Investors.
3. COMPANY'S REPRESENTATIONS AND COVENANT. The Company represents,
warrants and covenants to each Additional Investor as follows:
(a) the Company has entered into the bridge transaction after
careful consideration of all alternatives;
(b) the Company is aware of the potential return to the Additional
Investors pursuant to the bridge transaction, and acknowledges
that the amount of the potential return to the Additional
Investors appropriately reflects the risk inherent in the bridge
transaction; and
(c) the Company hereby covenants not to assert a defense of usury to
any action by an Additional Investor to collect any amount due
under a Senior Note or the Put Agreement.
4. ADDITIONAL INVESTORS' REPRESENTATIONS. Each Additional Investor
represents and warrants to the Company as follows:
(a) the Additional Investor is an "accredited investor" within the
meaning of Regulation D under the Securities Act of 1933, as
amended (the "Securities Act");
(b) the Additional Investor is acquiring the Shares for his own
account for purposes of investment, and not with a view toward
the sale or other distribution thereof,
(c) the Additional Investor has received or had access to all
information he deems necessary to make a judgment with respect
to the acquisition of the Shares, including the opportunity to
ask questions of and discuss the Company's business with
management of the Company;
(d) the Additional Investor understands that the Shares must be held
indefinitely unless registered under the Securities Act or
unless an exemption from registration exists, that no public
market now exists for the Shares, and that there may never exist
a public market for the Shares; and
(e) the Additional Investor understands that the Shares have not
been registered under the Securities Act (on the ground that the
sale of the Shares is exempt from registration as not involving
a public offering), and that the reliance of the Company on such
exemption is based upon the representations made in this
section.
5. RESTRICTED SECURITIES. The Shares have not been registered under the
Securities Act or any state securities law, and are not transferable
except pursuant to
(a) a public offering registered under the Securities Act, or
(b) subject to the conditions specified in the following subsection,
Rule 144 of the Securities and Exchange Commission (if
available), or any other legally available means of transfer.
In connection with the transfer of any Shares (except in a registered
public offering), the Additional Investor shall deliver to the
Company written notice describing the proposed transfer in reasonable
detail, together with an opinion of counsel which (to the Company's
reasonable satisfaction) is knowledgeable in securities law matters,
to the effect that such transfer may be effected without registration
or qualification of such Shares under the Securities Act or
applicable state securities laws. The Additional Investor shall not
transfer the certificates representing the Shares until the
transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained in this section. Any person
acquiring any securities of the Company from any Additional Investor
shall, upon acquiring such securities, become bound by the terms of
this Agreement, and the transfer of such securities shall not be made
on the books of the Company until a copy of this Agreement has been
executed by such person. Failure or refusal of the transferee to
sign this Agreement shall not relieve such person from any
obligations under this Agreement.
6. NOTICES. All notices under this Agreement will be in writing and
deemed given upon receipt, by (1) personal delivery, (2)
telephonically confirmed fax, (3) receipted courier service or (4)
certified or registered mail, return receipt requested, addressed to
the principal office of the Company (if to the Company), or to the
address shown on the shareholder records of the Company (if to an
Additional Investor). Refusal to accept delivery will be deemed
receipt.
7. GENERAL. This Agreement will be governed by the laws of the State of
Delaware. This Agreement will be binding upon the personal
representatives, successors and assigns of the parties hereto, but
will not be assignable without the prior written consent of the non-
assigning party. This Agreement constitutes the entire agreement
between the parties and may not be waived or modified except in
writing. This Agreement may be executed in any number of
counterparts, each of which will be an original and all of which
together will be one instrument. The headings used in this Agreement
are for convenience only and will not affect the interpretation
hereof.
[Signatures follow.]
IN WITNESS WHEREOF, the parties have executed this Additional Bridge
Loan Agreement as of the date first set forth above.
CAVION TECHNOLOGIES, INC.
By:/s/Xxxxx X. Xxxxxx /s/Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx XXXXXX X. XXXXXX, individually
Chairman and Chief
Executive Officer
------------------------------ /s/Xxxx Xxxxxxxx
XXXXX X. XXXXXX, individually XXXX XXXXXXXX, individually
/s/Xxxxx X. Xxxxxx
XXXXX X. XXXXXX, individually
SCHEDULE TO
ADDITIONAL BRIDGE LOAN AGREEMENT
SCHEDULE OF ADDITIONAL INVESTORS
NAME AND ADDRESS SHARE LOAN
AMOUNT AMOUNT
Xxxxx X. Xxxxxx 2,204 $20,000
Tax id no:--------------------------
0000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Home voice telephone: 000-000-0000
Office voice telephone: 000-000-0000
Xxxxx X. Xxxxxx 3,306 $30,000
Tax id no:--------------------------
0000 Xxxxx Xxxxxx Xxx
Xxxxxx, Xxxxxxxx 00000
Home voice telephone: 000-000-0000
Office voice telephone: 000-000-0000
Fax: 000-000-0000
Xxxx Xxxxxxxx 5,509 $50,000
Tax id no:--------------------------
0000 Xxxxx Xxxxxxxxx Xx.
Xxxxxx, Xxxxxxxx 00000
Home voice telephone: 000-000-0000
Office voice telephone: 000-000-0000
Fax: 000-000-0000
Xxxxxx X. Xxxxxx 3,306 $30,000
Tax id no:--------------------------
0000 Xxxxx #000
Xxxxxx, Xxxxxxxx 00000
Home voice telephone: 000-000-0000
Office voice telephone: 000-000-0000
Fax: 000-000-0000
EXHIBIT A TO
ADDITIONAL BRIDGE LOAN AGREEMENT
CAVION TECHNOLOGIES, INC.
-------------------------
SENIOR PROMISSORY NOTE
$50,000 May 28,1998
Cavion Technologies, Inc., a Colorado corporation ("Maker"), hereby
promises to pay to -------------------------------- ("Holder"), at -------
------------------------------------------ or at such other address as may
be specified by Holder, the principal sum of ----------------------------
Dollars ($-), together with interest as described below, in lawful money
of the United States of America.
The principal indebtedness evidenced by this Note shall earn interest
at the rate of forty-two percent (42%) per annum. Principal and interest
shall be paid in three monthly installments of $-------------------- each,
commencing on November 1, 1998, and continuing on the first day of each of
the subsequent three months, with the entire balance of principal and
accrued interest being due and payable on January 1, 1999.
This Note may be prepaid in full, but not in part, at any time,
subject to a prepayment penalty equal to the difference obtained by
subtracting (1) all amounts paid on this Note to and including the
prepayment from (2) all amounts that would have been paid on this Note had
payment been made only as and when scheduled in the preceding sentence.
Upon failure of Maker to pay any installment in full when due, Holder
may, by notice to Maker, accelerate the obligation of Maker to pay the
entire balance of this Note, and upon such acceleration there shall be due
to Holder such amount as would be due if the Note had been prepaid in
accordance with the preceding paragraph on the date notice of acceleration
was given by Holder.
All amounts due under this Note are "Senior Indebtedness" as defined
in the Bridge Loan Agreement dated the date hereof among Maker and certain
investors in Maker (including British Far East Holdings Ltd., Xxxxxx
Xxxxxx, and Fairway Realty Associates). Payments on this Note shall be
made in pari passu with payments on the other Senior Promissory Notes of
Maker dated the date hereof, as described in the Bridge Loan Agreement.
This Note is registered on the books of Maker and is transferable
only by surrender thereof at the principal office of Maker, duly endorsed
or accompanied by a written instrument of transfer, executed by the
registered Holder of this Note. Payment of or on account of principal and
interest on this Note shall be made only to or upon the order in writing
of the registered Holder.
The provisions of this Note and of all agreements now or hereafter
existing between Maker and Holder are hereby expressly limited so that in
no event whatever shall the amount paid or agreed to be paid to Holder for
the use, forbearance or detention of the sums evidenced by this Note
exceed the maximum amount permissible under applicable law. If from any
circumstance whatever the performance or fulfillment of any provision of
this Note, or of any other agreement between Maker and Holder, should
involve or purport to require any payment in excess of the limit
prescribed by law, then the obligation to be performed or fulfilled is
hereby reduced to the limit of such validity, and if from any circumstance
whatever Holder should ever receive as interest an amount which would
exceed the highest lawful rate, then the amount which would be excessive
interest shall be applied to the reduction of principal (or, at Maker's
option, be paid over to Maker) and shall not be counted as interest.
Maker hereby waives presentment, protest, demand or notice of any
kind in connection with any failure to pay when due the indebtedness
evidenced by this Note. If Maker fails to pay the indebtedness when due,
Maker agrees to pay Holder's reasonable legal fees and expenses incurred
in connection with the enforcement of this Note.
Regardless of the place of its execution, this Note shall be
construed in accordance with the laws of the State of Delaware.
CAVION TECHNOLOGIES, INC.,
a Colorado corporation
By:----------------------------------
Xxxxx X. Xxxxxx, Chairman and CEO
EXHIBIT B
TO
ADDITIONAL BRIDGE LOAN AGREEMENT
PUT AGREEMENT
This Put Agreement is made as of May 28, 1998 between Cavion
Technologies, Inc., a Colorado corporation (the "Company"), and the
investors listed on the signature pages hereof (the "Additional
Investors").
The Additional Investors have purchased from the Company an aggregate
of 12,121 shares of the nonvoting common stock, par value $0.01 per share,
of the Company (the "Shares"), pursuant to the Additional Bridge Loan
Agreement between the Additional Investors and the Company dated the date
hereof (the "Additional Bridge Loan Agreement"). As a condition of the
purchase, the Company has agreed to grant the Additional Investors an
option to sell all or part of the Shares to the Company on the terms of
this Agreement. In consideration of the Additional Bridge Loan Agreement,
and for other valuable consideration, it is agreed as follows:
1 GRANT OF PUT. The Company grants to each Additional Investor an
option (the "Put"), subject to the conditions of this Agreement, to sell
to the Company all or part of the Shares held by such Additional Investor
during the Exercise Period (as defined below), at a price of $7.00 per
share (as adjusted pursuant to section 4).
2 EXERCISE OF PUT.
(a) The Put shall be exercisable only by giving notice of exercise
to the Company during a 60-day period beginning on January 1, 1999 (the
"Exercise Period"), specifying the number of shares as to which the Put is
exercised. If not exercised within the Exercise Period, the Put shall
expire at 5:00 p.m. Denver, Colorado time on the last day of the Exercise
Period.
(b) Within 60 days after the end of the Exercise Period, the Company
shall tender payment in full for the shares as to which the Put is
exercised (plus any accumulated but unpaid dividends), in immediately
available funds, against delivery to the principal offices of the Company
of certificates representing the shares, accompanied by executed stock
powers in proper form for transfer, free and clear of all liens, claims,
and encumbrances.
3 TERMINATION. The Put shall terminate upon completion of the
transactions described in the preceding section.
4 ADJUSTMENT. In the event of any recapitalization, stock split,
combination of shares, or stock dividend, any shares into which the Shares
are converted shall be subject to the Put, and appropriate adjustment
shall be made in the purchase price of the Put.
5 NOTICES. All notices under this Agreement shall be in writing and
deemed given upon receipt, by (1) personal delivery, (2) telephonically
confirmed fax, (3) receipted courier service or (4) certified or
registered mail, return receipt requested, addressed to the principal
office of the Company (if to the Company), or to the address shown on the
shareholder records of the Company (if to an Additional Investor).
Refusal to accept delivery shall be deemed receipt.
6 GENERAL. This Agreement shall be governed by the laws of the State
of Delaware. This Agreement shall be binding upon the personal
representatives, successors and assigns of the parties hereto, but shall
not be assignable without the prior written consent of the non-assigning
party. This Agreement constitutes the entire agreement between the
parties and may not be waived or modified except in writing. This
Agreement may be executed in any number of counterparts, each of which
shall be an original and all of which together shall be one instrument.
The headings used in this Agreement are for convenience only and shall not
affect the interpretation hereof.
[Signatures follow.]
IN WITNESS WHEREOF, the parties have executed this Put Agreement as
of the date first written above.
CAVION TECHNOLOGIES, INC.
By:--------------------------- -------------------------------------
Xxxxx X. Xxxxxx XXXXXX X. XXXXXX, individually
Chairman and Chief
Executive Officer
------------------------------ -------------------------------------
XXXXX X. XXXXXX, individually XXXX XXXXXXXX, individually
-------------------------------------
XXXXX X. XXXXXX, individually
