Attached files
| file | filename |
|---|---|
| 8-K - Saint James CO | v165179_8k.htm |
| EX-2.1 - Saint James CO | v165179_ex2-1.htm |
| EX-10.5 - Saint James CO | v165179_ex10-5.htm |
| EX-10.2 - Saint James CO | v165179_ex10-2.htm |
| EX-99.1 - Saint James CO | v165179_ex99-1.htm |
| EX-10.8 - Saint James CO | v165179_ex10-8.htm |
| EX-10.6 - Saint James CO | v165179_ex10-6.htm |
| EX-10.9 - Saint James CO | v165179_ex10-9.htm |
| EX-99.2 - Saint James CO | v165179_ex99-2.htm |
| EX-10.7 - Saint James CO | v165179_ex10-7.htm |
| EX-10.4 - Saint James CO | v165179_ex10-4.htm |
| EX-10.3 - Saint James CO | v165179_ex10-3.htm |
EXECUTION
DRAFT
SECURED
PROMISSORY NOTE
$6,128,559.91
San
Francisco, California
October
__, 2009
The Saint
James Eos Wine Company, a California corporation (the “Purchaser”), for value
received, hereby promises to pay to Saphire Advisors, LLC, a Delaware limited
liability company (“Sapphire”), the aggregate principal sum of Six Million One
Hundred Twenty Eight Thousand Five Hundred Fifty Nine Dollars and Ninety One
Cents ($6,128,559.91), subject to increase or decrease pursuant to Section
2.5(e) of the Purchase Agreement (as defined below), and to pay interest thereon
as provided in this secured promissory note (the “Note”).
In connection with that certain
Membership Interest Purchase Agreement, dated October 12, 2009 (the “Purchase
Agreement”), by and among Purchaser, Sapphire, and The Saint James Company, a
North Carolina corporation (“Saint James”), Purchaser has executed and delivered
to Sapphire this Note. The following is a statement of the rights of
Sapphire under this Note and the conditions to which this Note is subject and to
which Sapphire, by the acceptance of this Note, agrees:
1. Term. All
outstanding principal and all accrued and unpaid interest hereunder shall be due
and payable on the thirty-month anniversary of the date hereof (the “Maturity
Date”), unless such maturity date is accelerated in accordance with the terms
hereof, subject to earlier repayment as described herein.
2. Interest. Interest
on the outstanding principal amount of this Note shall be calculated on the
basis of the actual number of days elapsed on the basis of a year of 360 days at
a per annum rate equal to six percent (6.0%) (the “Interest Rate”); provided, however, that, from
and after the occurrence of an Event of Default (as hereinafter defined),
interest shall accrue on the outstanding principal amount hereunder at the per
annum rate of nine percent (9.0%).
3. Payments. All
outstanding principal and accrued and unpaid interest thereunder shall be due
and payable as follows: (i) six payments of accrued and unpaid interest payable
in arrears, commencing on the one-month anniversary of the date hereof and
continuing on the succeeding five monthly anniversaries thereafter; and (ii)
twenty-four equal installments of principal and accrued and unpaid interest
payable in arrears, commencing on the seven-month anniversary of the date
hereof. All payments hereunder shall be applied: (A)
first, to accrued and unpaid interest; (B) second, to the payment of the
outstanding principal amount of this Note; and (C) third, to payment of any of
Sapphire’s expenses arising out of this Note. All payments of
principal, interest, and other amounts due hereunder shall be made by Purchaser
in lawful money of the United States of America in immediately available funds
at the principal place of business of Sapphire or at such other place designated
by Sapphire from time to time in writing to Purchaser. Notwithstanding anything
contained herein to the contrary, the obligations of Purchaser hereunder are
subordinated to the Farm Credit Obligations (and those in place thereof, e.g., a Qualified Refinancing
(as defined in the Security Agreement)). Notwithstanding anything to
the contained herein to the contrary, except during the pendency of any event of
default set forth in the documents underlying the Farm Credit Obligations or
Qualified Refinancing, as applicable, payments shall be made when due under this
Note (and, if such event of default is cured, any payments suspended during the
pendency of such event of default, are promptly paid to Sapphire); provided, however, that, if either Farm
Credit or the entity that provides the Qualifying Refinancing shall impose more
“restrictive subordination provisions” as a condition to providing Purchaser
with access to its reasonably required financing, payment hereunder shall be
restricted thereby. For purposes of this Agreement, the phrase
“restrictive subordination provisions” means (i) reserve requirements imposed
upon either or both of Purchaser and Saint James, (ii) cash, free cash, or
excess cash requirements imposed upon either or both of Purchaser and Saint
James, (iii) financial ratios or financial statement ratios imposed upon either
or both of Purchaser and Saint James, (iv) requirements that all payments to
grape growers or suppliers for the current or upcoming season, as imposed upon
either or both of Purchaser and Saint James, shall have been made in full, or
(v) equivalent restrictions, such that Farm Credit or the Qualifying Financing
entity has the contractual right and power to limit or preclude the performance
by the Purchaser of its obligations to the Sapphire under this Note or the
obligations of Saint James, as guarantor under the Guaranty; subject to the
Purchaser not being in breach of any of its covenants in any such financing
agreement, as of the effective date of each financing agreement between the
Purchaser and Farm Credit or between the Purchaser and the Qualifying Financing
entity, as appropriate.
4. Prepayment. This
Note may be prepaid, in whole or in part, by Purchaser at any time or from time
to time, without penalty or premium and without advance notice to
Sapphire.
5. Security and
Guaranty. The payment of this Note is secured by: (i) that
certain Security Agreement, of even date herewith (the “Security Agreement”),
made and executed by Purchaser in favor of Sapphire and granting to Sapphire a
security interest in assets of Purchaser, as described therein; (ii) that
certain Trademark Security Agreement, of even date herewith (the “Trademark
Security Agreement”), made and executed by Purchaser in favor of Sapphire and
granting to Sapphire a security interest in assets of Purchaser, as described
therein; and (iii) that certain Guaranty, of even date herewith (the
“Guaranty”), made and executed by Saint James. The terms and
provisions of the Security Agreement and Guaranty are hereby incorporated herein
by reference.
6. Events of
Default.
(a) Any
of the events specified in this Section 6 shall
constitute a default by Purchaser hereunder (each, an “Event of
Default”):
(i) Default
in the payment of the principal or unpaid accrued interest of this Note within
five (5) calendar days of the date on which Sapphire has provided written notice
to Purchaser and to Saint James that any amount then-due and payable has not
been received by Sapphire; or
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(ii) Any
material breach by Purchaser or Saint James of any representation, warranty, or
covenant in this Note, the Trademark Security Agreement, the Security Agreement,
the Guaranty, Purchase Agreement, or the registration rights agreement
substantially in the form of Exhibit 9.3(f)
attached to the Purchase Agreement, which breach is not cured within five (5)
calendar days of the date on which Sapphire has provided written notice to
Purchaser and to Saint James of the occurrence thereof; or
(iii) Any
transaction or series of transactions, the consummation of which results in a
change of Control of Purchaser or Saint James (as defined below) of all or
substantially all of their respective businesses, including, but not limited to:
(A) the transfer of all or substantially all of Purchaser’s or Saint James’
assets other than to one or more affiliates of Purchaser or Saint James, or (B)
a transfer of Purchaser’s or Saint James’ equity (other than through a series of
arms-length transactions of registered securities in the public market through
broker-dealers) or a reorganization of Purchaser or Saint James or a merger or
consolidation of Purchaser or Saint James, in each such case in this subsection
B with an unaffiliated third party (each, an “Unauthorized Transferee”), in a
single transaction or a series of transactions which results in an Unauthorized
Transferee owning 50% or more of the voting and equity rights of Purchaser or
Saint James (or the merged or consolidated entity) immediately following such
transfer, reorganization, merger or consolidation or series of transactions,
except, in each case, with the prior written consent of Sapphire, which may not
be unreasonably withheld, delayed, or denied. As used herein,
“Control of Purchaser or Saint James” shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of Purchaser or Saint James, whether through the ownership of equity,
by contract or otherwise; or
(iv) Purchaser
or Saint James becomes insolvent or unable to pay its debts as they become due;
or
(v) Purchaser
or Saint James (A) makes an assignment for the benefit of creditors,
(B) consents to the appointment of a custodian, receiver, or trustee for
itself or for a substantial part of its assets without its consent and is not
removed within 60 days after the appointment, or Purchaser or Saint James
consents to the appointment, or (C) proceedings are commenced against
Purchaser or Saint James under any bankruptcy, reorganization, liquidation, or
similar laws of any jurisdiction, and they remain undismissed for 60 days after
commencement, or Purchaser or Saint James consents to the commencement of those
proceedings; or
(vi) any
judgment in excess of $200,000 is entered against Purchaser, or any attachment,
levy, or garnishment in excess of $200,000 is issued against any property of
Purchaser.
(b) Upon
and during the continuance of an Event of Default (but only subsequent to the
expiration of any relevant cure period), Sapphire may, at its option, exercise
any one or more of the following remedies, by notice in writing to
Purchaser:
2
(i)
Declare the total unpaid
principal balance of this Note, together with all accrued and unpaid interest
thereon, immediately due and payable;
(ii) Foreclose
its lien arising under the Trademark Security Agreement and the Security
Agreement and exercise any one or more of the rights and remedies accruing
thereunder; or
(iii) Exercise
any other right or remedy available to Sapphire at law or in
equity.
(c) Sapphire’s
remedies under this Note, the Trademark Security Agreement, the Security
Agreement, and the Guaranty shall be cumulative and concurrent and may be
pursued singly, successively, or together against Purchaser, the collateral
described in the Trademark Security Agreement and the Security Agreement or any
portion or combination thereof, and Sapphire may resort to every other right or
remedy available at law or in equity without first exhausting the rights and
remedies contained herein, all in Sapphire’s sole discretion. Failure
of Sapphire, for a period of time or on more than one occasion, to exercise any
right or remedy hereunder shall not constitute a waiver of the right to exercise
the same at any time during the continued existence of the Event of Default or
in the event of any subsequent Event of Default. Sapphire shall not
by any omission or act be deemed to waive any of its rights or remedies
hereunder unless such waiver be in writing and signed by Sapphire, and then only
to the extent specifically set forth therein. A waiver in connection
with one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy in connection with a subsequent event.
(d) Purchaser
hereby waives presentment and demand for payment, notices of nonpayment and of
dishonor, protest of dishonor, and notice of protest.
7. Adjustment of Principal
Amount. In the event Purchaser delivers a Preliminary
Statement of Working Capital (as defined in Section 2.5(b) of the Purchase
Agreement), the outstanding principal amount hereunder shall be increased (or
decreased) pursuant to Section 2.5(e) of the Purchase Agreement, effective
retroactively to the date hereof. In the event the outstanding
principal amount hereunder is increased, any additional payments owed under this
Note as a result of the application of this Section 7 shall be
included ratably in the 24-month payments of principal and interest referenced
in Section 3
hereof. In the event the outstanding principal amount hereunder is
reduced, such reduction shall be deducted ratably from the 24-month payments of
principal and interest referenced in Section 3
hereof.
3
8. Conversion.
(a) Voluntary
Conversion. At any time until the Note is no longer
outstanding, this Note or any portion thereof (inclusive of principal and all
accrued and unpaid interest thereon) shall be convertible, in whole or in part,
into shares of common stock of Saint James (the “Common Stock”) at the option of
Sapphire, at any time and from time to time. Sapphire shall effect
conversions by delivering to Saint James a Notice of Conversion, the form of
which is attached hereto as Annex A (a “Notice of
Conversion”), specifying therein the principal amount and the accrued and unpaid
interest thereon of this Note to be converted and the date on which such
conversion shall be effected (such date, the “Conversion Date”). If
no Conversion Date is specified in a Notice of Conversion, the Conversion Date
shall be the date that such Notice of Conversion is deemed delivered
hereunder. To effect conversions hereunder, Sapphire shall not be
required to surrender this Note to Saint James physically unless the entire
principal amount of this Note, plus all accrued and unpaid interest thereon, has
been so converted. Amounts so converted shall be applied first
against the unpaid interest hereon and then deducted ratably from the 24-month
payments of principal and interest referenced in Section 3
hereof. Sapphire and Saint James shall maintain records showing the
principal amount(s) and the accrued and unpaid interest thereon so converted and
the date of such conversion(s). Saint James may deliver an objection
to any Notice of Conversion within three business days of delivery of such
Notice of Conversion. Sapphire, and any permitted assignee
by acceptance of this Note, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of the Note, the
unpaid and unconverted principal amount of the Note may be less than the amount
stated on the face thereof.
(b) Conversion
Price. The conversion price in effect on any Conversion Date
shall be the price determined by the first of the following clauses that
applies: (a) if the common stock is then listed, traded, or
quoted on any stock exchange, the OTC Bulletin Board, the Pink OTC Markets Inc.,
or other interdealer quotation system, the volume weighted average price of the
common stock for the ten trading days immediately preceding such Conversion Date
on the applicable trading market on which the common stock is then listed,
traded, or quoted, as reported by Bloomberg L.P. (or its
successor); (b) if the common stock is not then so listed, traded, or
quoted on any stock exchange, the OTC Bulletin Board, the Pink OTC Markets Inc.,
or other interdealer quotation system but are reported by broker-dealers to
their Self Regulatory Organization (“SRO”) as a trade on the “Other OTC”
(otherwise known as the “Grey Market”) and the SRO distributes the trade data to
market data vendors and financial websites, then, using such data, Saint James
shall manually calculate the volume weighted average price of the common stock
for the ten trading days immediately preceding such Conversion Date; or
(c) in all other cases, the fair market value of a share of common stock as
determined by an independent appraiser selected in good faith by the Sellers and
reasonably acceptable to Saint James, subject to adjustment herein (the
“Conversion Price”).
(c) Mechanics of
Conversion.
(i) Conversion Shares Issuable
Upon Conversion of Principal Amount. The number of shares of
Common Stock issuable upon conversion of the Note (collectively, the “Conversion
Shares”) issuable upon a conversion hereunder shall be determined by the
quotient obtained by dividing (x) the outstanding amount of the Note to be
converted by (y) the Conversion Price.
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(ii) Delivery of Certificate Upon
Conversion. Not later than three trading days after each
Conversion Date (the “Share Delivery Date”), Saint James shall deliver, or cause
to be delivered, to Sapphire a certificate or certificates representing the
Conversion Shares representing the number of Conversion Shares being acquired
upon the conversion of the Note.
(iii) Obligation
Absolute. Subject to Saint James’ right to timely deliver an
objection to Sapphire’s Notice of Conversion pursuant to Section 8(a) and any
rights of setoff under the Purchase Agreement, Saint James’ obligations to issue
and deliver the Conversion Shares upon conversion of the Note in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by Sapphire to enforce the same, any waiver or consent with respect to
any provision hereof, the recovery of any judgment against any person or entity
(either, a “Person”) or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by Sapphire or any other Person of any obligation to Saint James or any
violation or alleged violation of law by Sapphire or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of Saint James to Sapphire in connection with the issuance of such
Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by Saint James of any such action Saint James may
have against Sapphire.
(iv) Reservation of Shares
Issuable Upon Conversion. Purchaser shall cause Saint James to
all times reserve and keep available out of its authorized and unissued shares
of Common Stock for the sole purpose of issuance upon conversion of the Note, as
herein provided, free from preemptive rights or any other actual contingent
purchase rights of Persons other than Sapphire, not less than such aggregate
number of shares of the Common Stock as shall be issuable (taking into account
the adjustments of Section 9) upon the conversion of the outstanding principal
amount of the Note and payment of interest hereunder. Saint James
covenants that all shares of Common Stock that shall be so issuable shall, upon
issue, be duly authorized, validly issued, fully paid and
nonassessable.
(v) Fractional
Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the conversion of the Note. As to any
fraction of a share that Sapphire would otherwise be entitled to purchase upon
such conversion, Saint James shall at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round up to the next whole share.
(vi) Transfer
Taxes. The issuance of certificates for shares of the Common
Stock on conversion of the Note shall be made without charge to Sapphire for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificates, provided that, Saint James shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name
other than that of Sapphire and Saint James shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to Saint James the amount of such tax or shall
have established to the satisfaction of Saint James that such tax has been
paid.
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9. Certain
Adjustments.
(a) Stock Dividends and Stock
Splits. If Saint James, at any time while the Note is
outstanding: (A) pays a stock dividend or otherwise makes a
distribution or distributions payable in shares of Common Stock on shares of
Common Stock or any Common Stock equivalents (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by Saint James upon
conversion of, or payment of interest on, the Note); (B) subdivides outstanding
shares of Common Stock into a larger number of shares; (C) combines (including
by way of a reverse stock split) outstanding shares of Common Stock into a
smaller number of shares; or (D) issues, in the event of a reclassification of
shares of the Common Stock, any shares of capital stock of Saint James, then the
Conversion Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding any treasury shares of Saint
James) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to this Section shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination, or re-classification.
(b) Fundamental
Transaction. If, at any time while the Note is outstanding,
(A) Saint James effects any merger or consolidation of Saint James with or
into another Person; (B) Saint James effects any sale of all or substantially
all of its assets in one transaction or a series of related transactions; (C)
any tender offer or exchange offer (whether by Saint James or another Person) is
completed, pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property; or (D) Saint James
effects any reclassification of the Common Stock or any compulsory share
exchange, pursuant to which the Common Stock is effectively converted into or
exchanged for other securities, cash, or property (in any such case, a
“Fundamental Transaction”), then, upon any subsequent conversion of the Note,
Sapphire shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction, the same kind and amount of securities, cash, or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”). For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and Saint James shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders
of Common Stock are given any choice as to the securities, cash, or property to
be received in a Fundamental Transaction, then Sapphire shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of the
Note following such Fundamental Transaction. To the extent necessary
to effectuate the foregoing provisions, any successor to Saint James or
surviving entity in such Fundamental Transaction shall issue to Sapphire a new
note consistent with the foregoing provisions and evidencing Sapphire’s right to
convert such note into Alternate Consideration. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this Section 9(b) and ensuring that the Note (or any such
replacement security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.
6
(c) Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a
share, as the case may be. For purposes of this Section 9, the number
of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury
shares of Saint James) issued and outstanding.
(d) Notice to
Sapphire.
(i) Adjustment to Conversion
Price. Whenever the Conversion Price is adjusted pursuant to
any provision of this Section 9, Saint James shall promptly deliver to each
Sapphire a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment.
(ii) Notice to Allow Conversion
by Sapphire. If (A) Saint James shall declare a dividend (or
any other distribution in whatever form) on the Common Stock, (B) Saint James
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock, (C) Saint James shall authorize the granting to all holders of the
Common Stock of rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any
stockholders of Saint James shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which Saint
James is a party, any sale or transfer of all or substantially all of the assets
of Saint James, of any compulsory share exchange, whereby the Common Stock is
converted into other securities, cash, or property, or (E) Saint James shall
authorize the voluntary or involuntary dissolution, liquidation, or winding up
of the affairs of Saint James, then, in each case, Saint James shall cause to be
filed at each office or agency maintained for the purpose of conversion of the
Note, and shall cause to be delivered to Sapphire at its last address as it
shall appear upon the records of the Payee, at least twenty (20) calendar days
prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights, or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are
to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice. Sapphire is entitled to convert the Note during the
20-day period commencing on the date of such notice through the effective date
of the event triggering such notice.
7
10. Assignment. The
rights and obligations of Purchaser and Sapphire in this Note shall be binding
upon and benefit the successors and permitted assigns and transferees of such
parties. This Note is not assignable by any party unless the other
party consents to such assignment, the consent for which assignment or transfer
may be withheld, delayed or denied by the relevant party in its sole and
absolute discretion.
11. Loss, Destruction,
Mutilation. Upon receipt by Purchaser of evidence satisfactory
to it of the loss, theft, destruction or mutilation of this Note, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification,
and (in the case of mutilation) upon surrender and cancellation of this Note,
Purchaser will execute and deliver a new Note, which shall constitute an
additional contractual obligation on the part of Purchaser. The
issuance and delivery of such new Note shall render this Note null and
void.
12. Amendment. Any
provision of this Note may be amended or modified upon the written consent of
Purchaser and Sapphire.
13. Waiver. Any
provision of this Note may be waived only upon the written consent of the
waiving party.
14. Severability. The
parties hereto intend and believe that each provision in this Note comports with
all applicable law. However, if any provision of this Note is found by a
court of law to be in violation of any applicable law, and if such court should
declare such provision of this Note to be unlawful, void or unenforceable as
written, then it is the intent of Purchaser that such provisions shall be given
full force and effect to the fullest possible extent that it is legal, valid and
enforceable, that the remainder of this Note shall be construed as if such
unlawful, void or unenforceable provision were not contained therein, and that
the rights, obligations and interests of Purchaser and Sapphire under the
remainder of this Note shall continue in full force and effect.
15. Notices. Any
notice, request or other communication required or permitted hereunder shall be
in writing and shall be deemed to have been duly given if delivered pursuant to
Section 12.9 of the Purchase Agreement.
8
16. Governing
Law. The validity, construction and interpretation of this
Note shall be governed by the laws of the State of California. The
parties hereto irrevocably agree that all actions or proceedings in any way,
manner or respect, arising out of or from or related to this Note shall be
litigated only in courts having situs in San Francisco,
California. Each party hereby consents and submits to personal
jurisdiction in the San Francisco, California and waives any right such party
may have to transfer the venue of any such action or proceeding.
17. Waiver of Jury
Trial. PURCHASER WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (I) UNDER THIS NOTE, THE
SECURITY AGREEMENT, THE PURCHASE AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT,
AMENDMENT, OR AGREEMENT WHICH MAY BE DELIVERED IN THE FUTURE IN CONNECTION WITH
THIS NOTE; OR (II) ARISING FROM THE TRANSACTIONS CONTEMPLATED BY THIS NOTE, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY. PURCHASER AND SAPPHIRE IRREVOCABLY AGREE THAT ALL
ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT ARISING OUT OF OR FROM OR
RELATED TO THIS NOTE SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN THE
CITY OF SAN FRANCISCO, STATE OF CALIFORNIA. PURCHASER AND SAPPHIRE
HEREBY CONSENT AND SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY LOCAL, STATE OR
FEDERAL COURT LOCATED WITHIN SAID CITY AND STATE. EACH OF PURCHASER
AND SAPPHIRE HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE VENUE OF
ANY SUCH ACTION OR PROCEEDING.
18. Attorneys’
Fees. In the event any suit or action is brought by Sapphire
or Purchaser under this Note to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to recover
its reasonable attorneys’ fees from the non-prevailing party.
19. Heading;
References. All headings used herein are used for convenience
only and shall not be used to construe or interpret this Note. Except
where otherwise indicated, all references herein to Sections refer to Sections
hereof.
IN
WITNESS WHEREOF, Purchaser has caused this Note to be issued as of the date set
forth above.
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Its:
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9
ANNEX
A
NOTICE OF
CONVERSION
The
undersigned hereby elects to convert $__________________________ of outstanding
indebtedness owed under the Secured Promissory Note dated October ___, 2009, by
________________ to the order of Saphire Advisors, LLC, a Delaware limited
liability company, into shares of common stock (the “Common Stock”), of The
Saint James Company (the “Company”) according to the conditions
hereof, as of the date written below. If shares of Common Stock are
to be issued in the name of a person other than the undersigned, the undersigned
will deliver herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith. No fee will be charged to the
holder for any conversion.
The
undersigned agrees to comply with the prospectus delivery requirements under the
applicable securities laws in connection with any transfer of the aforesaid
shares of Common Stock.
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Date
to Effect Conversion:
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Amount
of Note to be Converted: __________________
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Number
of shares of Common Stock to be issued: _________
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Signature:
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Name:
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Address
for Delivery of Common Stock
Certificates:
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