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Exhibit 4 - Material Contracts
10.01 - AGREEMENT FOR SALE AND PURCHASE OF ASSETS
THIS AGREEMENT made and entered into this the day of March, 1998, by and
between OSTRICH PRODUCTS AMERICA, L.L.C., a Texas limited liability company,
hereinafter called "Seller" and QUILL INDUSTRIES, INC., a Nevada corporation,
hereinafter called "Purchaser".
W I T N E S S E T H :
WHEREAS, the Seller is a Texas limited liability company that owns
certain real and personal properties; and,
WHEREAS, the Seller is desirous of selling such property to Purchaser,
and the Purchaser is desirous of purchasing such assets from the Seller on the
terms and conditions hereinafter set out.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein made, it is hereby agreed by and between the parties hereto
as follows:
I
CLOSING DATE
The closing date of the sale herein provided for shall take place on or
before March 24, 1998, or such other date as the parties may mutually agree
upon. The closing of the sale shall take place on the closing date at such
place as the parties may mutually agree upon.
II
PROPERTY TO BE SOLD
At the closing, the Purchaser agrees to purchase and acquire from the
Seller, and the Seller agrees to sell, transfer and assign to the Purchaser,
by Xxxx of Sale, and Warranty Deed, the following described property:
(a) All of the real property together with any improvements thereon
described on Exhibit A attached hereto.
(b) All of the personal property described on the Xxxx of Sale attached
hereto as Exhibit B.
III
VALUE OF ASSETS
Both parties agree that the value of the assets being conveyed herein is
as set out on Exhibit C attached hereto.
IV
CONSIDERATION FOR SALE
The agreed purchase price for the real and personal property hereinafter
described shall be the sum of ONE MILLION DOLLARS ($1,00O,000.00) payable at
Closing by delivery of the following:
(a) A cashier or bank check in the sum of Five Hundred Thousand Dollars
($50O,000);
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(b) A non-interest bearing promissory note in the amount of Two Hundred
Fifty Thousand Dollars ($25O,000), payable within 30 days from the date of
Closing.
(c) A certificate representing 10O,000 shares of the Purchaser's 1998
Series A Convertible Preferred Stock, with such rights, preferences, and
privileges as described in the Designation of Rights, Preferences, and
Privileges attached hereto as Exhibit D be delivered to the Seller within 30
days of Closing.
V
REPRESENTATIONS AND WARRANTIES
The Seller hereby represents and warrants that:
(a) The Seller has good and marketable title to all of the assets being
conveyed herein and none of the properties and assets are subject to any
mortgage, pledge, lien, encumbrance or other charge of any kind or character.
(b) That none of the assets being conveyed herein are being held under
any lease, conditional sale, or other contract contemplating the disposal of
such property or assets, and no liens, pledges, charges, or encumbrances of
any kind or nature whatsoever will be placed against the assets of the Seller.
(c) The Seller is not involved in any undisclosed actions, litigation,
proceedings, investigations or claims which might materially or adversely
affect the assets of the Seller, or which would prevent or hamper the
transactions contemplated by this agreement.
(d) That Seller has good and indefeasible title to the real property to
be conveyed hereunder and that there are no liens, encumbrances or other
charges of any kind or character against said property.
(e) That the Seller is organized under the Laws of the State of Texas and
is in good standing and qualified to do business in the State of Texas.
(f) That Seller has filed all required tax returns and made all required
tax deposits with all governmental authorities.
The Purchaser hereby represents and warrants that:
(a) That the Purchaser is organized under the laws of the State of Nevada
and is in good standing and qualified to do business in the State of Nevada.
That all necessary resolutions will be been taken to enter into this agreement
and perform this transaction contemplated by this agreement and to authorize
the of officers of the Purchaser to effectuate this contract.
(b) That this agreement, when properly authorized and executed by the
Purchaser, will be a binding agreement and enforceable against Purchaser. That
this transaction will not violate any provisions of any Articles of
Organization, Regulations, or any law, rule, order or regulations or any
agreement or instrument to which Purchaser is a party.
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VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations, warranties, covenants and agreements of the Seller
and Purchaser herein set forth and all certificates and documents delivered
pursuant hereto and in connection with this agreement shall survive the
closing of this transaction and the same shall be deemed to have been material
and to have been relied upon by the party to whom directed. In case of any
breach of any representation, warranty, covenant or agreement, the breaching
party agrees to make payment to the aggrieved party in cash at Odessa, Ector
County, Texas, of any sums that the aggrieved party may suffer as a result of
any such breach, provided, that there shall be no liability on the part of the
breaching party unless such matter for which payment is sought shall have been
brought to the attention of the breaching party by the aggrieved party in
writing in time sufficient for the breaching party to file a timely answer and
appear and defend against any such alleged breach. In this connection, the
aggrieved party will give every cooperation to the breaching party in making
such defense in third party actions.
VII
GOVERNING LAW
This agreement is executed, delivered and intended to be performed in the
State of Texas, and shall be construed and enforced in accordance with and
shall be governed by the laws of the State of Texas, in all respects,
including matters of validity and performance.
VIII
AD VALOREM TAXES
It is understood and agreed that all Ad Valorem Taxes covering the real
and personal properties above described shall be pro rated to the date of
closing.
IX
SIGNATURES
All parties agree that each may rely upon the facsimile signature of the
other party as if same were an original.
IN WITNESS WHEREOF, this instrument is executed in duplicate originals
the date first above written.
SELLER:
OSTRICH PRODUCTS AMERICA, L.L.C.
BY: /S/ Xxxx Xxxxxxxxxx, Manager
BUYER:
QUILL INDUSTRIES, INC.
BY: /S/ R. Xxx Xxxxxx, President
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10.02 - AGREEMENT FOR SALE AND PURCHASE OF ASSETS
THIS AGREEMENT made and entered into this the 26th day of May, 1998, by
and between STARIAD INVESTMENTS LIMITED, a Cyprus corporation qualified to do
business in the State of Texas, hereinafter called "Seller" and QUILL
INDUSTRIES, INC., a Nevada corporation, hereinafter called "Purchaser".
W I T N E S S E T H:
WHEREAS, the Seller is a Cyprus corporation authorized to do business in
the State of Texas that owns certain real and personal properties; and
WHEREAS, the Seller is desirous of selling such property to Purchaser,
and the Purchaser is desirous of purchasing such assets from the Seller on the
terms and conditions hereinafter set out.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein made, it is hereby agreed by and between the parties hereto
as follows:
I
CLOSING DATE
The closing date of the sale herein provided for shall take place on or
before ______, or such other date as the parties may mutually agree upon. The
closing of the sale shall take place on the closing date at such place as the
parties may mutually agree upon.
II
PROPERTY TO BE SOLD
At the closing, the Purchaser agrees to purchase and acquire from the
Seller, and the Seller agrees to sell, transfer and assign to the Purchaser,
by Xxxx of Sale attached hereto as Exhibit A, and Warranty Deed attached
hereto as Exhibit B. the following described property, subject to Purchaser
obtaining title insurance in form satisfactory to Purchaser:
(a) All of the real property together with any improvements thereon
described on Exhibit C attached hereto.
(b) All of the personal property described on Exhibit D attached
hereto.
III
VALUE OF ASSETS
Both parties agree that the value of the assets being conveyed herein is
as set out on Exhibit E attached hereto.
IV
CONSIDERATION FOR SALE
The agreed purchase price for the real and personal property hereinabove
described shall be the sum of ONE MILLION DOLLARS ($ 1,000,000.00) payable at
Closing by delivery to the Seller of a Convertible Promissory Note in face
amount of $1,000,000, payable over a period of three years or convertible to
up to 400,000 shares of the Purchaser's restricted Common Stock all in
accordance with the terms of the Convertible Promissory Note, a form of which
has been attached hereto as Exhibit F to this Agreement.
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V
SECURITY AND COLLATERAL FOR PURCHASE PRICE
All obligations of Purchaser under this Agreement (including, but not
limited to, all obligations under the Convertible Promissory Note) shall be
secured by a First Lien Deed of Trust on all real property being conveyed
herein in the form as attached as Exhibit F as well as a first lien on all
other assets which shall be secured by the filing of UCC-1 s covering the
personal property.
VI
The Seller will present at closing Seller's corporate resolution
authorizing this transaction in the form as attached hereto as Exhibit G.
VII
REPRESENTATIONS AND WARRANTIES
The Seller hereby represents and warrants that:
(a) The Seller has good and marketable title to all of the assets being
conveyed herein and none of the properties and assets are subject to any
mortgage, pledge, lien, encumbrance or other charge of any kind or character.
(b) That none of the assets being conveyed herein are being held under
any lease, conditional sale, or other contract contemplating the disposal of
such property or assets, and no liens, pledges, charges, or encumbrances of
any kind or nature whatsoever will be placed against the assets of the Seller.
(c) The Seller is not involved in any undisclosed actions, litigation,
proceedings, investigations or claims which might materially or adversely
affect the assets of the Seller, or which would prevent or hamper the
transactions contemplated by this agreement.
(d) That Seller has good and indefeasible title to the real property to
be conveyed hereunder and that there are no liens, encumbrances or other
charges of any kind or character against said property.
(e) That the Seller is a Cyprus corporation qualified to do business in
the State of Texas.
(f) That Seller has filed all required tax returns and made all required
tax deposits with all governmental authorities.
The Purchaser hereby represents and warrants that:
(a) That the Purchaser is organized under the laws of the State of Nevada
and is in good standing and qualified to do business in the State of Nevada.
That all necessary resolutions will be been taken to enter into this agreement
and perform this transaction contemplated by this agreement and to authorize
the of officers of the Purchaser to effectuate this contract.
(b) That this agreement, when properly authorized and executed by the
Purchaser, will be a binding agreement and enforceable against Purchaser. That
this transaction will not violate any provisions of any Articles of
Organization, Regulations, or any law, rule, order or regulations or any
agreement or instrument to which Purchaser is a party.
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VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations, warranties, covenants and agreements of the Seller
and Purchaser herein set forth and all certificates and documents delivered
pursuant hereto and in connection with this agreement shall survive the
closing of this transaction and the same shall be deemed to have been material
and to have been relied upon by the party to whom directed. In case of any
breach of any representation, warranty, covenant or agreement, the breaching
party agrees to make payment to the aggrieved party in cash at Odessa, Ector
County, Texas, of any sums that the aggrieved party may suffer as a result of
any such breach, provided, that there shall be no liability on the part of the
breaching party unless such matter for which payment is sought shall have been
brought to the attention of the breaching party by the aggrieved party in
writing in time sufficient for the breaching party to file a timely answer and
appear and defend against any such alleged breach. In this connection, the
aggrieved party will give every cooperation to the breaching party in making
such defense in third party actions.
IX
It is agreed that Xxxx Xxxxxxxxxx may continue to occupy and live in the
main house located on the real property being conveyed herein until June 30,
1999. Although Xxxx Xxxxxxxxxx shall have the right to occupy said premises,
he shall not be obligated to do so. Xxxx Xxxxxxxxxx shall be responsible for
timely paying all utilities directly used by the house. Additionally, Xxxx
Xxxxxxxxxx shall pay the wages (but not payroll taxes, worker's compensation
or similar items) of Quill employee Xxxxxx Xxxxxxx.
Additionally, the buffalo owned by Xxxx Xxxxxxxxxx presently located on
the premises may remain on the premises until June 30, 1999. The expense of
maintaining said buffalo shall be that of Xxxx Xxxxxxxxxx.
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GOVERNING LAW
This agreement is executed, delivered and intended to be performed in the
State of Texas, and shall be construed and enforced in accordance with and
shall be governed by the laws of the State of Texas, in all respects,
including matters of validity and performance.
XI
AD VALOREM TAXES
It is understood and agreed that all Ad Valorem Taxes covering the real
and personal properties above described shall be pro rated to the date of
closing.
IN WITNESS WHEREOF, this instrument is executed in duplicate originals
the date first above written.
SELLER:
STARIAD INVESTMENTS LIMITED
BY: /S/ Xxxx Xxxxxxxxxx
PURCHASER:
QUILL INDUSTRIES, INC.
BY: /S/ R. Xxx Xxxxxx
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10.03 - Form of Quill Senior Ranching and Ranching Associate Contract
This contract, dated ________, is between Quill Industries' Inc. and Quill
Ranching Associate _____________________ (Associate).
In consideration for fees, goods and services, these parties agree to the
following:
1. Upon signing this contract; Associate agrees to pay Quill Industries the
sum of ______________ as a participation fee. This is a one-time fee, and is
not refundable except as provided below.
2. Quill Industries agrees to provide the Associate with _____ ostrich chicks.
Shipment of the chicks will be coordinated and scheduled with the Associate
Within twelve months from original shipping date, a minimum of _____ of the
best birds will be selected for Associates, breeder stock Quill Industries and
Associate will share the proceeds from the sale of Quill Grow out Birds,
within thirty (30) days after their removal from the Associates facility.
Associated share of the proceeds will be fifty percent (50%) and no less than
____________________ dollars ($______) for each ostrich sent to xxxxxxxxx. A
Grow out Bird is defined as all birds not selected as breeder stock located at
Associate's facility.
3. Quill Industries and the Associate may choose to participate in a growout
option each year. The grow out option is specifically designed to allow the
Quill Industries Ranching Associate to update, increase. and replace ostriches
in his breeder flock each year. This will be accomplished by allowing the RA
to add up to 10% of the grow-out birds each year to his breeder flock. The
amount of grow out chicks sent to an associate each year will be based on
qualities of chicks available at the time and the desire and ability of each
associate. Each grow out contract will be for approximately twelve (12) months
and these ostriches will generally be designated for xxxxxxxxx.
4. At all times, the ostrich chicks, breeder birds, and ostrich eggs at the
Associate's facilities are the exclusive property of Quill Industries. If
Quill Industries should default on any payment due the Associate, the Breeder
Stock and eggs on their facility will become exclusive property of the
Associate as payment in full. Default is defined as any payment past due over
sixty (60) days.
5. Associate agrees to maintain the ostriches and eggs on their facility in
accordance with the Quill Industries Ranching Standard Operating Procedures
(RSOP) (under separate cover). These rules will be updated by Quill no more
than quarterly.
6. Quill Industries agrees to pay Associate a commission of fifty percent
(50%) of the net amount on any sale made by Quill of ostriches or eggs from
the Associate's facility. The net amount is defined as the gross sales price
less a ten percent (10%) selling commission.
7. Quill Industries agrees to pay Associate an additional commission of ten
percent (10%) of the gross amount on any sale off ostriches or eggs from the
Associate's facility, if such sale is created and consummated by the
Associate. Associate may not make any sale of ostriches or eggs without
written approval of Quill.
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8. Quill Industries has first right of refusal to transfer any eggs produced
by ostriches on the Associate's ranch to the Quill Industries Central Ranching
Facility. On any eggs transferred to Quill Industries, the Associate will earn
a commission based on the following schedule. Years one through ten -
___________________ dollars ($_____) per fertile egg or current market price
at time of transfer (which ever is lower) for fertile ostrich eggs. The egg
commission will be paid monthly. This contract is renewable at seventy five
dollars ($75.00) per fertile ostrich egg or current market price at time of
transfer (whichever is lower) for fertile ostrich eggs' provided the Associate
continues to meet the standards as set forth in the RSOP.
9. Associate must use an approved feed as set forth in the RSOP
10. Associate must maintain minimum levels of production in the raising of
ostrich chicks, maintenance of ostrich breeder stock, and egg laying from
breeder stock. These minimum levels of production are calculated by taking the
quarterly average production levels for all Quill Industries Associates,
including the Quill Industries Central Ranching Operation, and multiplying
these figures times eighty percent (80%). In the event that such other Quill
Industries Associate information is not available, then the minimum production
levels as set forth in the RSOP will be used. If Associate does not maintain
these minimum production levels, then Quill Industries has the right to remove
the ostrich birds and eggs from the Associate's facility and cancel this
contract.
11. This is an exclusive contract for ratite production between Associate and
Quill Industries. The Associate may not. at any time during this contract,
maintain, trade or sell any non- Quill Industries ratites. Due to the need to
maintain a disease-free environment for ostrich production., the Associate
must remove any existing stock in ratites, or other birds of any kind, on the
Associate's facility before this contract begins.
12. Associate must construct such facilities and purchase such equipments at
the Associate's expenses as deemed necessary by Quill Industries for proper
maintenance of ostriches on the Associate's ranch. These required facilities
and equipment are detailed in the RSOP. No ostrich chicks will be shipped from
Quill Industries to Associate until such facilities and equipment are in
place. Quill Industries has the complete right of inspection for this purpose.
13. Should Quill Industries determine that the Associate is not operating
according to the RSOP, or is not maintaining the minimum production levels
necessary as defined above, Quill Industries reserves the right to remove all
ostriches and eggs from the Associate's facility and cancel this contract. A
refund, equal to the participation fee less any monies paid to-date by Quill
Industries to Associate, will be made within ninety (90) days following the
removal of all Quill Industries assets. If Quill Industries has sustained
damage due to the improper care of Quill Industries birds and eggs, or
Associate has illegally sold, transferred, stolen or damaged Quill Industries
birds or eggs, then Quill Industries shall have the right to retain such
amounts as necessary to cover such damages.
14. Associate will maintain proper and adequate records of ostrich production
as detailed in the RSOP.
15. Quill Industries reserves the right to audit any Associate's operations or
records at any time during regular business hours.
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16. This is the complete agreement between the parties mentioned herein. No
other conditions or representations, written or oral, will modify or supersede
this agreement. Any disputes of this agreement will be litigated in the City
of Fort Worth, Texas.
Signed: Dated
------------------------------ ----------------
Quill Industries, Inc.
Signed: Dated
------------------------------ ----------------
Ranching Associate
Ranching Associate Name
------------------------
Mailing Address
-------------------------------
City, State, Zip
-------------------------------
Telephone 1 Telephone 2
---------------- -----------------------
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10.04 - Convertible Secured Promissory Note dated May 26, 1998
Date: May 26, 1998 $1,000,000.00
QUILL INDUSTRIES, INC.
CONVERTIBLE SECURED PROMISSORY NOTE
NON-INTEREST BEARING
---------------------------------------------------------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR
SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE
SECURITIES ACT OR THE LAWS OF THE APPLICABLE STATE OR A "NO-ACTION" OR
INTERPRETIVE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER AND ITS
COUNSEL TO THE EFFECT THAT THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT AND SUCH STATE STATUTES.
------------------------------------------------
QUILL INDUSTRIES, INC., a corporation duly organized and existing under
the laws of the state of Nevada (hereinafter referred to as the "Company"),
for value received, hereby promises to pay to STARIAD INVESTMENTS LIMITED, a
Cyprus corporation (hereinafter referred to as the "Holder"), the sum of ONE
MILLION DOLLARS ($1,000,000)in accordance with the terms of this promissory
note (the "Note") at the offices of Holder's counsel 0000 Xxxx 00xx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000, in such lawful money of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debt, until the face amount hereof is paid or made
available for payment as herein provided.
This Note is subject to the following further terms and material
provisions:
1. Term and Payments. The term of this Note shall be three years from
the date hereof and the payments towards reduction of the face amount of the
Note shall be made as follows:
(a) A payment of $500,000 on or before the first anniversary date
(the "First Payment"), unless the Holder gives the Company written notice of
the Holder's intent to convert the First Payment to 200,000 shares of the
Company's common stock, $0.001 par value (the "Common Stock"), in accordance
with the provisions for conversion as set forth in section 2 of this Note.
(b) A payment of $250,000 on or before the second anniversary
date (the "Second Payment"), unless the Holder gives the Company written
notice of the Holder's intent to convert the Second Payment to 100,000 shares
of the Company's Common Stock, in accordance with the provisions for
conversion as set forth in section 2 of this Note.
(c) A payment of $250,000 on or before the third anniversary date
(the "Third Payment"), unless the Holder gives the Company written notice of
the Holder's intent to convert the Third Payment to 100,000 shares of the
Company's Common Stock, in accordance with the provisions for conversion as
set forth in section 2 of this Note.
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2. Conversion. Subject to, and in compliance with, the provisions
contained herein, the Holder of this Note is entitled, at the Holder's option,
within 15 days prior to the First, Second or Third Payment Date of this Note
(or in case this Note or some portion hereof shall have been called for
prepayment prior to such First, Second or Third Payment Date, then, in respect
of this Note or such portion hereof, until and including, but not after, the
close of business within 15 days of the date of notice of prepayment), to
convert this Note or any portion of the face amount then due, into fully paid
and nonassessable Common Stock at a conversion price of $2.50 per share (the
"Conversion Price"). The conversion right shall be exercised with conversion
occurring by surrender of this Note, duly endorsed (if so required by the
Company) or assigned to the Company or in blank, to the Company at its
offices, accompanied by written notice to the Company, in the form attached
hereto, that the Holder elects to convert that portion of the face amount of
the Note to be converted.
3. Limitations on Right on Conversion. Following receipt of the
written notice of intention of the Holder to convert that portion of the Note
then due, the Company shall take such steps as it deems appropriate to permit
conversion of that portion of the Note as specified in the notice without
registration or qualification under applicable federal and state securities
laws; provided, that in no event shall the Company be required to consent to
the general service of process or qualify as a foreign corporation in any
jurisdiction where the Holder resides is such jurisdiction is different from
such Holder's residence when the Note was originally offered and sold. In
order to comply with exemptions from the registration requirements of the
Securities Act and certain states securities statutes, the Company may require
the Holder to make certain representations and execute and deliver to the
Company certain documents as a condition to exercise of the conversion rights
hereunder, all in form and substance satisfactory to the Company as determined
in its sole discretion. In the event the Company reasonably determines that
the Note cannot be converted in compliance with applicable federal and state
securities laws in the absence of registration or qualification under such
statutes, the Company shall be under no obligation to permit conversion of the
Note and issue any shares of Common Stock pursuant hereto.
4. Adjustment in Conversion. The Conversion Price and shares of
Common Stock issuable upon conversion of this Note may be subject to
adjustment from time to time as follows:
(a) If the Company shall subdivide the outstanding Common Stock
into a greater number of shares or combine the outstanding Common Stock into a
smaller number of shares, or issue by reclassification any of its Common
Stock, the conversion price in effect immediately prior thereto shall be
adjusted so that the Holder shall be entitled to receive after the occurrence
of the First, Second or Third Payment, the number of shares to which the
Holder would have been entitled had such portion of the Note been converted
immediately prior to the occurrence of such event.
(b) No fraction of a share of Common Stock shall be issued upon
conversion, but in lieu thereof the Company, notwithstanding any other
provision hereof, may pay therefor in cash at the fair value of the fractional
share of Common Stock at the time of conversion; and
(c) Neither the purchase or other acquisition by the Company of
any shares of Common Stock nor the sale or other disposition by the Company of
any shares of Common Stock shall affect any adjustment of the Conversion Price
or be taken into account in computing any subsequent adjustment of the
Conversion Price.
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5. Prepayment. This Note is subject to prepayment, in whole or in
part, at the election of the Company at any time, upon not less than 15 days
notice. Prepayment shall be effected by paying the amount equal to the
outstanding face amount of the Note. On the date fixed for prepayment by the
Company, the amount due shall be paid in cash or certified funds. Any portion
of the face amount which is prepaid only in part shall be presented for
notation thereon by the Company of such partial prepayment.
6. Creation of Security Interest. In connection with the issuance
of this Note, the Company grants to the Holder a security interest in and to
any and all real and personal property which is the subject of the Purchase
and Sale Agreement between the Company and the Holder dated May __, 1998 (the
"Purchase and Sale Agreement"), and represented by a First Lien Deed of Trust
attached as Exhibit F thereto and a Form UCC-1.
7. Satisfaction and Discharge of Note. This Note shall cease to be
of further effect (except as to any surviving rights of transfer, or exchange
of Notes herein expressly provided for) when:
(a) The Company has paid or caused to be paid all sums payable
hereunder by the Company; and
(b) All the conditions precedent herein provided for relating to
the satisfaction and discharge of this Note have been complied with.
8. Events of Default. "Events of Default," when used herein, whatever
the reason for such event of default and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgement,
decree, or order of any court or any order, rule, or regulation of any
administrative or government body or be caused by the provisions of any
paragraph herein means any one of the following events:
(a) Default in the payment of any portion of the Note when due
or otherwise; or
(b) Default in the performance or breach of any covenant or
warranty of the Company in this Note (other than a covenant or warranty, the
breach or default in performance of which is elsewhere in this section
specifically dealt with), the related Purchase and Sale Agreement, First Lien
Deed of Trust or any other documents related to such Purchase and Sale
Agreement and continuation of such default or breach for a period of 30 days
after there has been given to the Company by registered or certified mail, by
the Holder, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a notice of default
hereunder; or
(c) The entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment, or composition of or in respect of the Company under the Federal
Bankruptcy Act or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuation of
any such decree or order unstayed and in effect for a period of 30 consecutive
days; or
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(d) The institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or a filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Act or any other applicable federal or state law; or
(e) The consent by the Company to the filing of any such
petition or the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any substantial
part of its property), or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
in furtherance of any such action.
9 Suit for Enforcement. If an event of default occurs and is
continuing, the Holder may, in its discretion, proceed to protect and enforce
any rights it may have under this Note, or any other instrument pertaining to
this Note. Any such action to enforce the Holder's rights may be brought in
the state court, Ector County, Texas, or in the federal xxxxxxxx xxxxx,
Xxxxxxx Xxxxxxxx of Texas, Midland-Odessa Division, or in any other court of
competent jurisdiction as the Holder shall deem most effectual to protect and
enforce any such rights, whether for the specific enforcement of any covenant
or agreement under this Note or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
10 Notices; Waiver. Where this Note provides for notice to the
Holder of any event, such notice shall be sufficiently given if in writing and
sent by courier providing for delivery within 72 hours or mailed, registered,
postage prepaid, to the Holder, at its address as it appears in the records
maintained by the Company, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. Where the
Note provides for notice to the Company, such notice shall be sufficiently
given if in writing and mailed, registered, postage prepaid, to the Company at
its address set forth above (or at such other address as shall be provided to
the Holder in the manner for giving notices set forth herein), not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. Where this Note provides for notice in any manner,
such notice may be waived in writing by the person entitled to receive such
notice, whether before or after the event, any such waiver shall be equivalent
of such notice.
11. Restrictions. The Holder, by acceptance hereof, represents and
warrants as follows:
(a) The Note is being acquired for the Holder's own account to
be held for investment purposes only and not with a view to, or for, resale in
connection with any distribution of such Note or any interest therein without
registration or other compliance under the Securities Act, and the Holder
hereof has no direct or indirect participation in any such undertaking or in
underwriting such an undertaking.
(b) The Holder hereof has been advised and understands that the
Note has not been registered under the Securities Act and the Note must be
held and may not be sold, transferred, or otherwise disposed of for value
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available; except as set forth herein, the
Company is under no obligation to register the Note under the Securities act;
in the absence of such registration, sale of the Note may be impracticable;
14
the Company will maintain stop-transfer orders against registration of
transfer of the Note. The Company may refuse to transfer the Note and/or the
Common Stock unless the holder thereof provides an opinion of legal counsel
reasonably satisfactory to the Company or a "no-action" or interpretive
response from the Securities and Exchange Commission to the effect that the
transfer is proper; further, unless such letter or opinion states that the
Note and/or Common Stock are free from any restrictions under the Securities
Act, the Company may refuse to transfer the Note and/or the Common Stock to
any transferee who does not furnish in writing to the Company the same
representations and agree to the same conditions with respect to such Note or
Common Stock if any set forth herein. The Company may also refuse to transfer
the Note if any circumstance is present reasonably indicating that the
transferee's representations are not accurate.
12. Severability. In case any provision in this Note shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
13. Governing Law. This Note shall be governed by and construed and
interpreted in accordance with the laws of the state of Texas.
14. Legal Holidays. In any case where any date provided herein shall
not be a business day, then (notwithstanding any other provision of this Note)
the event required or permitted on such date shall be required or permitted,
as the case may be, on the next succeeding business day with the same force
and effect as if made on the date upon which such event was required or
permitted pursuant hereto.
15. Delay or Omission; No Waiver. No delay or omission of the Holder
to exercise any right or remedy accruing upon any event of default shall
impair any such right or remedy or constitute a waiver of any such event or
default or any acquiescence therein. Every right or remedy given hereby or by
law may be from time to time, and as often as may be deemed expedient.
16. Miscellaneous. This Note is subject to the following additional
terms and conditions:
(a) If this Note is placed with any attorney for collection, or
if suit be instituted for collection, or if any other remedy provided by law
is pursued by the Holder, because of any default in the terms and conditions
herein, then in either event, the Company agrees to pay reasonable attorneys'
fees, costs, and other expenses incurred by the Holder in so doing.
(b) None of the rights and remedies of the Holder shall be
waived or affected by failure or delay to exercise them. All remedies
conferred on the Holder shall be cumulated and none is exclusive. Such
remedies may be exercised concurrently or consecutively at the Holder's
option.
(c) This Note is negotiable and transferable, subject to
compliance with the provisions of paragraph 11 hereof.
DATED effective as of the 26th day of May, 1998.
ATTEST: QUILL INDUSTRIES, INC.
By /S/Xxxxx Xxxx, Secretary By /S/ R. Xxx Xxxxxx, President
15
[FORM OF EXERCISE FOR CONVERSION]
Date:-------------------------------
QUILL INDUSTRIES, INC.
0000 Xxxxxx X, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Re: Conversion of Note
Gentlemen:
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note or the portion hereof designated, into shares of
Common Stock, $0.001 par value per share, of Quill Industries, Inc., in
accordance with the terms of this Note, and directs that the shares issuable
and deliverable upon the conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned
unless a different name has been indicated below.
If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay any transfer taxes payable with respect
thereto.
______________________________________
(Signature)
FILL IN FOR REGISTRATION OF SHARES
___________________________________ _____________________________________
(Printed Name) (Social Security or Tax I.D. Number)
___________________________________
(Street Address)
___________________________________ _______________________________________
(City, State, and Zip Code) Portion to be converted (if less than
all)
16
10.05 - Promissory Note Between the Registrant and Xxxxxx X. Xxxxxxx
PROMISSORY NOTE
Principal amount $250,000 Date: May 1, 1998
FOR VALUE RECEIVED, the undersigned, Quill Industries, Inc. ("Borrower"
or "Undersigned") hereby jointly and severally promise to pay to the order of:
Xxxxxx X. Xxxxxxx the sum of Two Hundred Fifty Thousand Dollars ($250,000),
together with interest thereon at the rate of 6% per annum on the unpaid
balance due over 90 days.
Said sum shall be paid in lawful money of the United States to Xxxxxx X.
Xxxxxxx in person in Dallas, Texas or as the holder of this note may from time
to time designate.
If note is not paid in full within 90 days, a lien on the O.P.A. assets
owned by Borrower shall be recorded in the Ector County Courthouse in Odessa,
Texas.
In the event this note shall be in default and placed for collection,
then the borrower agrees to pay all reasonable attorney fees and costs of
collection.
The undersigned and all other parties to this note, whether as endorsers,
guarantors or sureties, agree to remain fully bound until this note shall be
fully paid and waive demand, presentment and protest and all notices hereto
and further agree to remain bound, notwithstanding any extension,
modification, waiver, or other indulgence or discharge or release of any
obligor hereunder or exchange, substitution, or release of any collateral
granted as security for this note. No modification or indulgence by any holder
hereof shall be binding unless in writing, and any indulgence on any one
occasion shall not be an indulgence for any other or future occasion. Any
modification or change in terms, hereunder granted by any holder hereof, shall
be valid and binding upon each of the undersigned, notwithstanding the
acknowledgment of any of the undersigned, and each of the undersigned does
hereby irrevocably grant to each of the others power of attorney to enter into
any such modification on their behalf. The rights of any holder hereof shall
be cumulative and not necessarily successive. This note shall take effect as a
sealed instrument and shall he construed, governed and enforced in accordance
with the laws of the State of Texas.
/S/ X.X. Xxxxxx
--------------------------
Borrower