EXHIBIT 10.7
RESPOND TO IRVINE OFFICE
December 28, 2001
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
President,
Patriot Motorcycle Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Letter Agreement As to Payment of Past Due Account Receivable
Dear ▇▇. ▇▇▇▇▇▇:
This letter agreement (the "Agreement") sets forth our understanding
whereby Patriot Motorcycle Corporation ("Patriot") has agreed to issue
to the partners of ▇▇▇▇▇▇▇▇, August & ▇▇▇▇▇▇▇▇▇ LLP (the "Firm")
thirty thousand (30,000) shares of Patriot common stock (the "Shares")
in lieu of cash payment of $43,318.88 currently outstanding for legal
services previously rendered to Patriot by the Firm. The Shares shall
be issued as follows:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,000 shares
▇▇▇▇▇▇▇ ▇. August 10,000 shares
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 10,000 shares
The Shares shall be registered on Form S-8 with the Securities and
Exchange Commission (the "Registration Statement").
The Firm has agreed to forbear from taking legal action against
Patriot for amounts past due for legal services rendered, and may
continue to agree to do so (and/or to provide additional services on
behalf of Patriot, which we may, in our sole and exclusive discretion,
determine whether or not to provide at the time) in consideration for
the issuance and registration on Form S-8 of the Shares, and Patriot's
compliance with the requirements contained in this Agreement. In the
event that upon liquidation of the Shares any excess amount (above the
principal and accrued interest due under our Retention Agreement)
shall be recovered, we shall deposit such amount into our Attorney
Trust Account to be held on retainer against your final invoice for
future services. Conversely, in consideration of our willingness to
accept the Shares in lieu of cash payment for services rendered,
and/or to accept them in lieu of payment for services to be rendered
on behalf of Patriot in the future, you further agree that you shall
issue to us and register for public sale, as appropriate, such
additional shares as may be necessary to liquidate in full the amount
of your account receivable with the Firm, including without limitation
any interest due thereon in accordance with our existing Retention
Agreement, to the extent that the number of Shares described above is
insufficient to pay such amount in full at prevailing market prices.
You further agree that in the event any amount of funds (including,
without limitation, any accrued but unpaid interest due under our
Retention Agreement) is still owed to the Firm on March 1, 2002, then
such amount shall become immediately due and payable in cash by
Patriot.
By signing this Agreement below, ▇▇▇▇▇▇▇ acknowledges and agrees that
the amount set forth above represents the sum certain of principal
amount outstanding as of November 30, 2001, plus accrued but unpaid
interest due under our Retention Agreement, and does not include any
fees, expenses or costs incurred during the month of December 2001,
including for the preparation and filing of the Form S-8 registration
statement in which the Shares being delivered to the Firm as set forth
herein are covered. Patriot further acknowledges and agrees that the
Firm, including the individual partners named herein, have at all
times rendered good, adequate and legally sufficient services for
Patriot, and have performed in accordance with the requests of Patriot
(and all predecessors and affiliates thereof, if any) in a timely,
competent and professional manner, and that Patriot has no claims
against the Firm, or any individual partner of the Firm.
With respect to any obligation of Patriot to make further payments in
cash or stock in connection with any deficiency for services rendered
or to be rendered on behalf of Patriot, Patriot expressly waives any
right of arbitration or to otherwise dispute the fees and costs
currently due and payable by it to the Firm, now memorialized in this
Agreement, and confirms that said amounts are in fact due from Patriot
to the Firm without any right of set off or other claim. As further
consideration for the Firm's willingness to accept stock in lieu of
cash payment as stated in this Agreement, Patriot also waives,
relinquishes and discharges the Firm and the partners named herein,
and each of them, from any and all claims or potential claims, whether
known or unknown, which Patriot has or may have against the Firm,
and/or one, more or all of the partners, arising out of services
rendered. It is further understood and agreed that Patriot
specifically and expressly waives any and all rights under Section
1542 of the California Civil Code, or any analogous federal, state or
municipal law, rule, regulation or ordinance. Section 1542 provides
as follows: "A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the Release, which if known by him, must have materially
effected his settlement with the debtor." Said acknowledgement as to
the absence of claims and waiver of any existing or potential claims
is part of the consideration of this Agreement.
As further consideration for the Firm's willingness to enter into this
Agreement, ▇▇▇▇▇▇ ▇▇▇▇▇▇, President of Patriot, further hereby agrees
in his individual capacity, to guarantee and make payment for any
deficiency and/or other payment of fee, expense or charge which may
become due and payable to the Firm hereunder, and the Firm's
acceptance of the terms hereof is expressly made in reliance upon the
acknowledgments and covenants of future performance made herein both
by ▇▇▇▇▇▇▇ and by ▇▇▇▇▇▇ ▇▇▇▇▇▇, individually.
By signing this Agreement, ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇, individually,
hereby acknowledge that they are entering into and signing this
Agreement of their own free will, and that each of them has been
advised to seek independent legal counsel prior to entering into and
performing any aspect of this Agreement. In particular, each of them
acknowledges their understanding that the issuance of shares in a
corporation to legal counsel which will continue to provide legal
services for such corporation may create actual conflicts of interest
in the future, and may potentially render the continued provision of
legal services to such corporation impracticable or improper under
certain situations. Furthermore, this Agreement creates certain
obligations, and waives certain rights, which should not be entered
into without Patriot's and ▇▇▇▇▇▇ ▇▇▇▇▇▇' informed consent. Each of
Patriot and ▇▇▇▇▇▇ ▇▇▇▇▇▇ acknowledge that they have either obtained
such independent counsel, or voluntarily waived the right to do so
after being advised to by a representative of the Firm.
This Agreement is made in California and shall be governed by and
construed in accordance with the internal laws of the State of
California applicable to the enforcement and operation of such
instruments within this State, without giving effect to principles of
conflicts of law applied thereby. Patriot and the Firm hereby agree
that should any dispute arise in regard to this Agreement, it shall be
adjudicated by any California State Court of competent jurisdiction
sitting in the County of Orange, State of California. In the event
any legal proceeding may be instituted between Patriot and the Firm in
connection with any controversy or dispute arising from, under or
related to this Agreement or our Retention Agreement (in connection
with which this Agreement is being entered into), the judgment therein
shall include a reasonable sum to be paid to the prevailing party for
and on account of attorneys' fees and costs incurred in such
proceeding, and shall provide for post-judgment attorneys' fees
incurred in such proceeding and/or in collecting the judgment as well
as interest at the maximum rate permitted by law. For purposes of
this Agreement, legal fees and costs shall be deemed to have been
incurred, and are recoverable hereunder, by the Firm to the extent it
spends its own time, expense and effort in enforcing its rights
hereunder as fully as if it had engaged a third party attorney to
enforce its rights on the Firm's behalf. The provisions of this
Agreement are severable, and if any one or more provisions is
determined to be illegal, indefinite, invalid or otherwise
unenforceable, in whole or in part, by any court of competent
jurisdiction, then the remaining provisions of this Agreement and any
partially unenforceable provisions to the extent enforceable in the
pertinent jurisdiction, shall continue in full force and effect and
shall be binding and enforceable on the parties.
This letter memorializes in writing the agreement made with a
representative of Patriot on December 14, 2001, which for all purposes
shall be deemed the effective date of this Agreement. If this letter
correctly sets forth your understanding and agreement with respect to
the matters mentioned above, please execute and return one copy of
this Agreement to the undersigned via facsimile and U.S. Mail and
forward the certificates evidencing the issuance of the Shares at your
earliest convenience.
Very truly yours,
▇▇▇▇▇▇▇▇, AUGUST & ▇▇▇▇▇▇▇▇▇ LLP
_/s/___________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Partner
The undersigned ▇▇▇▇▇▇ confirms and agrees that this letter, effective
as of December 14, 2001, sets forth our complete understanding and
agreement with ▇▇▇▇▇▇▇▇, August & ▇▇▇▇▇▇▇▇▇ LLP.
PATRIOT MOTORCYCLE CORPORATION
By: ____________/s/_____________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
President
▇▇▇▇▇▇ ▇▇▇▇▇▇
By: ___________/s/______________________
individually
