EXHIBIT 10.1
LOAN AGREEMENT
PalWeb Corporation
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
(000) 000-0000
December 1, 1999
Xx. Xxxxx Xxxxxx, Xx.
X.X. Xxx 0000
Xxxxxx, Xxxxx 00000
Dear Xx. Xxxxxx:
The undersigned, PalWeb Corporation (the "Company"), a publicly held
and traded Delaware corporation, agrees with you as follows:
SECTION 1. DESCRIPTION OF THE NOTE AND COMMITMENT.
1.1 DESCRIPTION OF THE NOTE. The Company agrees to issue to you
(or your nominee) a line of credit Convertible Debenture (the "Note") in the
aggregate principal amount of $500,000.00, with the Note to be dated as of the
date of issue, to bear interest from such date at the rate specified
hereinbelow. The Company shall use proceeds of the Loan represented by the Note
to pay the Company's general operating expenses and overhead. The Note shall be
substantially in the same form and substance as the note attached hereto as
Exhibit "A" and incorporated herein by reference for all purposes.
Interest on the Note shall be computed on the basis of a 365 day year
consisting of twelve months at the rate of eight and one-half percent (8.5%) per
annum.
The term Note, as used herein, shall include the Note delivered to you
pursuant to this Agreement. You are hereinafter sometimes referred to as the
"Noteholder".
1.2 (a) COMMITMENT; CLOSING DATE. Subject to the terms and
conditions hereof, and the basis of the representations and warranties
hereinafter set forth, you agree to loan the Company up to $500,000.00, on a
revolving line of credit basis, with draws on the loan to be in the maximum
amount of $100,000.00 in any calendar month. The initial amount to be funded
shall be $25,000.00. Simultaneously with the funding by you of said initial
$25,000.00, the Company agrees to execute a Promissory Note, payable to you, in
the form of the note attached hereto as Exhibit "A".
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Requests for funding under the terms of the of the Note shall be made
to you at your offices and payment therefor by you shall be in Federal or other
current or immediately available funds at Security National Bank and Trust
Company, Norman, Oklahoma, in the amount or the amounts requested by the
Company, subject, however, to the maximum monthly draw of $100,000.00, as set
forth above.
(b) SUBSEQUENT DRAWS AFTER INITIAL LOAN AMOUNT. Following the funding
of the initial $25,000.00 which shall be funded within three (3) days of written
request, the Company shall have the right to increase its indebtedness over and
above the Initial Loan Amount by up to an additional $475,000.00 as provided in
Section 1.2(a) above by giving you five (5) business days prior written notices,
subject, however, to the previously stated maximum monthly draw of $100,000.00.
1.3 OTHER AGREEMENTS. The Company may, at its sole discretion,
enter into similar or different note agreements with other lenders.
SECTION 2. REPRESENTATIONS.
2.1 REPRESENTATIONS OF THE COMPANY. The Company represents and
warrants that, to the best of its knowledge, all representations that have been
made to you in writing are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though herein
set forth.
2.2 REPRESENTATIONS OF NOTEHOLDER. In entering into this
Agreement, you acknowledge, represent, warrant, and agree with the Company, as
follows:
(a) No consent, approval, authorization, or order of any court or
governmental agency or body is required for, and no statutory waiting period is
required to expire before the execution and delivery by you of this Agreement or
the consummation by you of the transactions contemplated hereunder other than
those which have been obtained or will be obtained prior to or at the purchase
of the Note.
(b) The purchase of the Note by you hereunder and the performance
of this Agreement will not result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any statute, or any indenture,
mortgage, deed of trust, loan agreement, or other agreement or instrument to
which you are a party or by which you are bound, the certificate or articles of
incorporation or bylaws of the undersigned if the undersigned is a corporation,
the partnership agreement of the undersigned if the undersigned is a
partnership, the trust instrument of the undersigned if the undersigned is a
trust, the will and letters testamentary of the undersigned if the undersigned
is an estate, or any order, rule, or regulation of any court or governmental
agency or body having jurisdiction over the undersigned or the property of the
undersigned.
(c) You are acquiring the Note for your own account as a
principal, for investment purposes only, and not with a view to or for resale,
distribution, or fractionalization thereof, in whole or in part, and no other
person has a direct or indirect beneficial interest in such Note.
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(d) You acknowledge that the offering and sale of the Note is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the "Act"), and under the securities or Blue Sky laws of the states in
which the Note will be offered. You represent and warrant to, and agree with,
the Company that you have the financial ability to bear the economic risk of
your investment, have adequate means for providing for your current and
contemplated financial needs, personal or other contingencies, and have no need
for liquidity with respect to an investment in the Note.
(e) You have complete knowledge of the Company's business and
intended use of the proceeds from the sale of the Note (which shall include, but
not be limited to, the following purposes: (i) operating capital for the
Company; and (ii) any other purpose approved by a majority vote of the Board of
Directors of the Company), and you have experience in financial and business
matters such that you are capable of evaluating the merits and risks of your
investment in the Note.
(f) You meet all suitability standards imposed by the State of
Texas in connection with the purchase of promissory notes.
(g) That you:
(i) have been furnished with information and documents
that you have requested, and have carefully examined such information and
documents and have evaluated the risks and other considerations relating to a
purchase of the Note;
(ii) have been given the opportunity to ask questions of,
and receive answers from the Company concerning the terms and conditions of the
purchase and sale of the Note to which this Agreement relates, and other matters
pertaining to this investment, and have been given the opportunity to obtain
such additional information necessary to verify the accuracy of the information
disseminated by the Company in order for you to evaluate the merits and risks of
a purchase of the Note to the extent the Company possesses such information or
can acquire it without unreasonable effort or expense; and
(iii) have determined that the Note is a suitable
investment and that at this time you have no need for liquidity of this
investment and could bear the complete loss thereof.
(h) You represent, warrant, and agree that you will not sell or
otherwise transfer the Note or any portion thereof without notifying the Company
in writing, and fully understand and agree that you must bear the economic risk
of this purchase for an indefinite period of time because, among other reasons,
the Note has not been registered under the Act or under the securities or Blue
Sky laws of any state, and, therefore, cannot be resold, pledged, assigned, or
otherwise disposed of unless applicable securities laws of such states or an
exemption from such registration is available. You understand that the Company
is under no obligation to register the Note on your behalf or to assist you in
complying with any exemption from
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registration under the securities laws. You also understand that sales or
transfers of the Note are further restricted by the provisions of state
securities or Blue Sky laws.
(i) No representations or warranties have been made to you by the
Company or any officer, employee, agent, or subsidiary of the Company, other
than the representations and warranties of the Company in this Agreement.
(j) Any information that the undersigned has heretofore furnished
to the Company is true, correct, and complete as of the date of this Agreement,
and if there should be any change in such information at or prior to the closing
date hereunder, you will immediately furnish such revised or corrected
information to the Company.
You comprehend, acknowledge, represent, agree, and are aware of each of
the following:
(a) The Company is a developmental stage company, as defined under
generally accepted auditing standards, and has not realized a profit from
operations for several years. The Company does not currently have sufficient net
operating income to either make the interest payments or retire the principal
debt represented by the Note.
(b) No federal or state agency has passed upon the Note as
securities or made any finding or determination as to the fairness of this loan
as a potential investment.
(c) There are substantial risks of loss of investment incident to
the purchase of Note, and that no person or entity shall be personally liable or
responsible for the repayment of any interest or principal payments related to
the Note.
(d) The investment in the Note is an illiquid investment and you
must bear the economic risk of investment for an indefinite period of time.
(e) There is no established market for the Note and there can be
no assurance that a public market for the Note will develop.
(f) This Agreement contains restrictions on transferability of the
Note. The Note cannot be transferred without the Company, in its sole
discretion, being assured that such transfer complies with federal securities
laws, and the Company may request an opinion of counsel to that effect.
You hereby represent and warrant that you are, or the entity for which
you are executing this Agreement is, an "accredited investor". An accredited
investor is defined as:
(1) a natural person, over the age of 21 and legally competent,
whose net worth, individually or jointly with his or her spouse exceeds
$1,000,000.00 (inclusive of the value of home, home furnishings, and
automobiles); or
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(2) a natural person, over the age of 21 and legally competent,
whose individual annual adjusted gross income (as defined herein) exceeded
$200,000.00 or whose joint annual adjusted gross income (as defined herein) with
his or her spouse exceeded $300,000.00, in the last two (2) prior years and who
reasonably expects that his or her individual personal income will exceed
$200,000.00, or his or her joint income with his or her spouse will exceed
S300,000.00, in the current year; "individual annual adjusted gross income"
means an individual's "adjusted gross income" as reported for federal income tax
purposes, less any income increased by the following amounts (but not including
any amounts attributable to a spouse or the property owned by a spouse): (i) the
amount of any tax-exempt interest income received; (ii) the amount of losses
claimed as a limited partner in a limited partnership; (iii) any deduction
claimed for depletion; (iv) any deduction allowed for amounts contributed to an
XXX or Xxxxx retirement plan; (v) alimony paid; and (vi) for applicable taxable
years, any amount by which income from long-term capital gains has been reduced
in arriving at adjusted gross income pursuant to the provisions of Section 1202
of the Internal Revenue Code of 1986 (the "Code"); and "joint annual adjusted
gross income" means (x) in the ease of a husband and wife filing a joint federal
income tax return, the "adjusted gross income" reported for federal income tax
purposes on such return, increased by the amounts described in clauses (i)
through (vi) above; and (y) in the case of a husband and wife not filing a joint
federal income tax return, the sum of the husband's and the wife's individual
annual adjusted gross income as defined above; or
(3) an executive officer of the Company;
(4) an entity (i.e., a corporation, partnership, trust, or estate)
each of the equity owners of which meets the requirements of categories (1),
(2), or (3) above or categories (5) and (6) below;
(5) a trust, with total assets in excess of $5,000,000.00 not
formed for the specific purpose of acquiring Securities, whose purchase is
directed by a natural person or entity that has such knowledge and experience in
financial and business matters to be capable of evaluating the merits and risks
of acquiring Securities; or
(6) (i) a bank as defined in Section 3(a) (2) of the Act, or a
savings and loan association or other institution as defined in Section 3(a) (5)
(A) of the Act, whether acting in its individual or fiduciary capacity; (ii) a
broker or dealer registered pursuant to Section 15 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"); (iii) an insurance company as
defined in Section 2(13) of the Act; (iv) an investment company registered under
the Investment Company Act of 1940; (v) a business development company as
defined in Section (2) (a) (48) of the Investment Company Act of 1940; (vi) a
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301 (c) or (d) of the Small Business Investment Act
of 1958; (vii) a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of$5,000,000.00; (viii) an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended, and
either (x) the employee benefit plan has total assets in excess of
$5,000,000.00; (y) the investment decision is made by a plan
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fiduciary, as defined in Section 3(21) of such act, that is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or (z) if the plan is a self directed plan, solely by persons that
are "accredited investors" under Rule 501 of the Act; (ix) a private business
development company as defined in Section 202(a) (22) of the Investment
Advisers Act of 1940; or (x) an organization described in Section 501 (c) (3)
of the Code, with total assets in excess of$5,000,000.00.
SECTION 3. CLOSING CONDITIONS.
Your obligation to loan the funds represented by the Note on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Note and to the following further conditions
precedent:
3.1 COMPANY EXISTENCE AND AUTHORITY. On or prior to the effective
date of this Note Agreement, you shall have received, in form and substance
reasonably satisfactory to you, such documents and evidence with respect to the
Company as you may reasonably request in order to establish its existence and
good standing.
3.2 SATISFACTORY DOCUMENTS. The Note and other documents made and
executed in connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof shall be in satisfactory
form and substance to you, and you shall have received upon request a copy
(executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said transactions.
3.3 WAIVER OF CONDITIONS. If the conditions specified herein have
not been fulfilled by the Company, you may waive compliance by the Company with
any such condition to such extent as you may in your sole discretion determine.
Nothing in this Section 3.3 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
4. COMPANY COVENANTS.
4.1 EXISTENCE. The Company will preserve and keep in force and
effect its legal existence and all licenses and permits necessary, in all
material respects, to the proper conduct of its business.
4.2 INSURANCE. The Company and/or the operator of the Well will
maintain insurance coverage by financially sound and reputable insurers in such
forms and amounts and against such risks as are customary for companies of
established reputation engaged in the same or similar businesses, provided that
the foregoing shall not prevent any transaction permitted by Section 4.5.
4.3 MAINTENANCE. The Company will maintain, preserve and keep its
assets which are used or useful in the conduct of its business, in good repair
and working order and
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from time to time will make all necessary repairs, replacements, renewals,
and additions so that at all times the efficiency thereof shall be maintained.
4.4 NATURE OF BUSINESS. The Company will not engage in any
business if, as a result, the general nature of the Company's business, taken on
a consolidated basis, would then be substantially changed from the general
nature of the business engaged in by the Company on the date of this Agreement,
without first obtaining written consent from you, which consent shall not be
unreasonably withheld.
4.5 MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. The Company will
not (i) consolidate with or be a party to a merger with any other company or
(ii) sell, lease, or otherwise dispose of all or any substantial part of the
assets of the Company, provided, however, that the Company may consolidate or
merge with any other Company if the Company shall be the surviving or continuing
entity, or if the Company is not the surviving or continuing entity, the
surviving or continuing entity shall expressly assume in writing the obligations
of the Company under this Agreement and under the Note
4.6 INVESTMENTS. The Company will not make any investments in or
loans, advances, or extensions of credit to any person, except:
(a) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof, maturing within one (1) year from the date of acquisition thereof, (ii)
banker's acceptances, commercial paper and deposits of United States Dollars
maturing within one (1) year from the date of acquisition thereof issued by
commercial banks chartered under the laws of the United States of America or any
state thereof, each such bank having a deposit rating of A-1 or better by
Xxxxx'x Investors Service and maintaining policies with the Federal Deposit
Insurance Corporation (FDIC);
(b) loans or advances to any officers, managers, members and
employees not exceeding in the aggregate at any one time, fifty thousand dollars
($50,000 00);
(c) receivables arising from the sale of goods in the ordinary
course of business of the Company.
4.7 GUARANTIES. The Company will not become or be liable in
respect to any guaranty except guaranties of the Company which are incurred in
the ordinary course of business.
4.8 REPORTS AND RIGHTS OF INSPECTION. The Company will keep proper
books and records in accordance with generally accepted accounting principles
consistently applied (except for changes disclosed in the financial statements
furnished to you by the Company and concurred in by the Company's independent
public accountants, and will furnish you so long as you are a holder of the
Note, and to each other holder of the Note, a copy of the Company's Annual
Financial Statements
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5. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
5.1 EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein.
(a) Default shall occur in the payment of interest or principal on
any Note when the same shall have become due and such default is not remedied
within thirty (30) days after written notice thereof to the Company; or
(b) Default shall occur in the observance or performance of any
covenant or agreement contained in this Agreement which is not remedied within
thirty (30) days after written notice thereof to the Company; or
(c) The Company becomes insolvent or bankrupt, applies for or
consents to the appointment of a custodian or receiver for the Company under
Federal bankruptcy law; or
(d) A custodian, trustee, liquidator, or receiver is appointed for
the Company and is not discharged within 90 days after such appointment.
5.2 ACCELERATION OF MATURITY. When any Event of Default described
in Section 5.1 above has occurred and is continuing for a period of thirty (30)
days, you may, by giving notice in writing to the Company sent by registered
mail, certified mail - return receipt requested, or telegram (the "Notice of
Acceleration"), declare the entire principal and accrued interest on the Note,
to be, and it shall thereupon become, forthwith due and payable. The Company
further agrees, to the extent permitted by law, to pay to you all costs and
expenses incurred by you in collection of the Note upon any Default hereunder or
thereon, including reasonable compensation to your attorneys for their services
rendered therewith. You may rescind and annul such declaration of acceleration,
and no such rescission and annulment shall extend to or affect any subsequent
Default or Event of Default or impair any right consequent thereto.
SECTION 6. AMENDMENTS, WAIVERS, AND CONSENTS.
6.1 CONSENT REQUIRED. Any term, covenant, agreement, or condition
of this Agreement may, with the consent of the Company, be amended or compliance
therewith be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the consent
in writing of the holder and party to this Agreement.
6.2 EFFECT OF AMENDMENT OR WAIVER. Any such amendment or waiver
shall be binding upon the holder and each and any future holder of the Note and
upon the Company, whether or not such Note shall have been marked to indicate
such amendment or waiver. No such amendment or waiver shall extend to or affect
any obligation not expressly amended or waived or impair any right consequent
thereto.
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7. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Unless the context otherwise requires, the terms hereinafter set forth
when used shall have the following meanings and the following definitions shall
be equally applicable to the both the singular and plural forms of any of the
terms herein defined:
"Affiliate" shall mean any Person (i) which directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, the Company, (ii) which beneficially owns or holds 10% or
more of any class of the Voting Membership Interests of the Company. The term
"control" means the possession, directly or indirectly, or the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Interest or Stock, by contract or otherwise.
"Person" shall mean an individual, partnership, corporation, trust, or
unincorporated organization, and a government agency or political subdivision
thereof.
8. MISCELLANEOUS.
8.1 NOTICES. Except as may be otherwise specifically provided in
this Agreement, all notices required or permitted hereunder shall be in writing
and shall be deemed to be delivered three (3) days after being deposited in the
United States Mail, postage prepaid, registered or certified mail, return
receipt requested, postage prepaid, addressed to the parties at the respective
addresses set forth below or at such other addresses as may have been
theretofore specified by written notice delivered in accordance herewith:
If to the Company: PalWeb Corporation
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
If to you: Xxxxx Xxxxxx, Xx.
X.X. Xxx 0000
Xxxxxx, Xxxxx 00000
8.2 LOAN AGREEMENT. This Agreement constitutes a Loan Agreement,
and shall not create a partnership, joint venture, or other similar association
between any of the parties to this Agreement for federal or state tax purposes
or otherwise, and the parties agree to cause whatever elections or returns to be
filed which may be necessary to evidence or preserve such status.
8.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of
your heirs, successors, and assigns, including each successive holder or holders
of the Note.
8.4 SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations, and warranties made by the Company and you shall survive the
closing and the delivery of this Agreement and the Note.
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8.5 SEVERABILITY. Should any part of this Agreement for any reason
be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated,
and it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including any such
part(s), or portion(s) which may, for any reason, be hereafter declared invalid.
8.6 GOVERNING LAW; VENUE. This Agreement and the Note shall be
governed by and be construed in accordance with the laws of the State of Texas.
VENUE FOR ANY ARBITRATION AND/OR LEGAL PROCEEDINGS ARISING OUT OF THIS AGREEMENT
AND/OR IN CONNECTION WITH THE NOTE SHALL BE EXCLUSIVELY DALLAS COUNTY, TEXAS.
8.7 CAPTIONS. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any provisions hereof.
SECTION 9. CONVERSION OF NOTE.
9.1 RIGHT OF CONVERSION BY NOTEHOLDER. On or after six (6) months
after the date of this Agreement, the Noteholder shall have the right to convert
the principal of the Note into fully paid and non-assessable shares of the
Company's Common Stock at the rate of one (1) share for each $0.10 of debt
(principal amount) which is then due and owing by the Company to the Noteholder
at the time of such conversion. Such right shall be exercised by the surrender
of the Note to the Company at any time during the usual business hours at the
office of the Company, accompanied by written notice, executed by the Noteholder
of the Note, that the holder elects to convert the Note or any portion thereof
and specifying the name or names (with addresses and U.S. Federal Taxpayer
Identification Numbers) in which such certificate or certificates for Common
Stock are to be issued and (if so required by the Company) by a written
instrument or instruments of transfer in form satisfactory to the Company duly
executed by the Noteholder or its duly authorized legal representative and the
amount of funds required by the Company for transfer. For convenience, the
conversion of all or a portion, as the case may be, of the principal of the Note
into the Common Stock of the Company is hereinafter sometimes referred to. as
the conversion of the Note. All or a portion of the Note surrendered for
conversion shall, when surrendered to the Company, and all interest due thereon
is paid, be canceled, and subject to the next succeeding sentence, no Note or
Notes shall be issued in lieu thereof. In the case of the Note being converted
in part only, upon such conversion the Company shall execute and deliver to the
holder thereof a new Note in an aggregate principal amount equal to the
unconverted portion of the Note.
9.1 RIGHT OF CONVERSION BY THE COMPANY. On or after two (2) years
after (he date of this Agreement, the Company shall have the right to convert
the principal of the Note into fully paid and non-assessable shares of the
Company's Common Stock at the rate of one (1) share for each $0.10 of debt
(principal amount) which is then due and owing by the Company to the Noteholder
at the time of such conversion. Such right shall be exercised by the delivery of
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the Stock to the Noteholder, accompanied by written notice, executed by the
Company, that the Company elects to convert the Note or any portion thereof into
Common Stock. For convenience, the conversion of all or a portion, as the case
may be, of the principal of the Note into the Common Stock of the Company is
hereinafter sometimes referred to as the conversion of the Note. All or a
portion of the Note converted shall be canceled, and subject to the next
succeeding sentence, no Note or Notes shall be issued in lieu thereof. In the
case of the Note being-converted in part only, upon such conversion the Company
shall execute and deliver to the holder thereof a new Note in an aggregate
principal amount equal to the unconverted portion of the Note.
9.3 ADJUSTMENTS IN RESPECT OF UNPAID INTEREST. Conversion or
adjustment shall be permissible with respect to unpaid interest (interest
accrued on the Note, but unpaid by the Company, may be surrendered for
conversion).
9.4 NO ADJUSTMENTS IN RESPECT OF DIVIDENDS. No payment or
adjustment shall be made upon any conversion on account of any dividends on the
Common Stock issued upon conversion.
9.5 NO FRACTIONAL SHARES. No fractional shares or scrip
representing fractional shares shall be issued upon the conversion of the Note.
If the conversion of the Note results in a fraction, an amount equal to such
fraction multiplied by the conversion price of the Common Stock shall be paid to
such Noteholder in cash by the (company.
9.6 SHARES TO BE RESERVED. The Company covenants that it will at
all times reserve and keep available out of its authorized Common Stock, solely
for the purpose of issue upon conversion of the Note as herein provided, such
number of shares of Common Stock as shall then be issuable upon the conversion
of the Note. The Company covenants that all shares of Common Stock so issuable
shall, when issued, be duly and validly issued and fully paid and
non-assessable.
The Company covenants that, upon conversion of the Note as herein
provided, there will be credited to the appropriate Common Stock capital
accounts from the consideration for which the shares of Common Stock issuable
upon conversion are issued an amount per share of Common Stock so issued, as
determined by the Company, which amount shall not be less than the amount
required by law and by the Company's certificate of incorporation, as amended,
as in effect on the date of such conversion.
9.7 REGISTRATION OF SHARES. The Company agrees that it shall use
its best effort to cause the Common Stock issued upon conversion of the Note to
be registered, and the Company shall pay all costs and fees in connection with
such registration. However, you understand and agree that such registration may
be denied by applicable governmental and regulatory agencies, and consequently,
the denial of such registration shall not constitute default by the Company
hereunder.
THE EXECUTION HEREOF BY YOU SHALL CONSTITUTE A CONTRACT BETWEEN YOU AND
THE COMPANY FOR THE PURPOSES SET FORTH HEREIN, AND
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THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, AND EACH
EXECUTED COUNTERPART SHALL CONSTITUTE AN ORIGINAL, BUT ALL TOGETHER ONLY ONE
AGREEMENT.
COMPANY:
PALWEB CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx, Chairman of the Board
NOTEHOLDER:
/s/ Xxxxx Xxxxxx, Xx.
--------------------------------------
Xxxxx Xxxxxx, Xx.
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EXHIBIT "A"
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PROMISSORY NOTE
---------------
Date: December 1, 1999
Maker: PalWeb Corporation, a Delaware corporation
Maker's Mailing Address: 0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Payee: Xxxxx Xxxxxx, Xx.
Place for Payment: X.X. Xxx 0000
Xxxxxx, Xxxxx 00000
Principal Amount: $500,000.00, or so much of said Principal Amount as
is advanced from time to time. $S00, 000.00 is the
maximum amount that may be borrowed by Maker under
this Note. As of today, Maker has received $25,000.00
and future advances are contemplated.
Annual Interest Rate on Unpaid Principal from Date: 8.5%
Annual Interest Rate on Matured, Unpaid Amounts: 8.5%
Terms of Payment (Principal and Interest): Quarterly payments of accrued interest shall be paid
on March 1, June 1, September 1, and December 1 of
each year, with a final payment of all accrued
interest and the Principal Amount due and payable on
or before December 1, 2001
Maker promises to pay to the order of Payee at the place for payment
and according to the terms of payment the Principal Amount plus all accrued
interest. All unpaid amounts shall be due by the final scheduled payment date.
On default in the payment of this Note, the unpaid principal balance
shall become immediately due at the election of Payee. Maker and each surety,
endorser, and guarantor waive all demands for payment, presentation for payment,
notices of intention to accelerate maturity, notices of acceleration of
maturity, protests, and notices of protest. In the event of default in the
payment of this Note, the holder hereof may, at any time following default,
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