UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 5, 2014

 

ORYON TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada	001-34212	26-2626737
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

 

4251 Kellway Circle, Addison, Texas 75001

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: (214) 267-1321

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

 

  

Item 1.01

Entry into a Material Definitive Agreement

 

The information set forth under Item 1.03 of this Current Report on Form 8-K (this “Report”) is incorporated into this Item 1.01 by reference.

 

Item 1.03

Bankruptcy or Receivership

 

As previously reported, on May 6, 2014 Oryon Technologies, Inc. (the “Company”) filed a voluntary petition for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the “Court”), Case No. 14-32293. Additionally, on May 16, 2014 Oryon Technologies, LLC, a Texas limited liability company and a wholly-owned subsidiary of the Company, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Court, Case No. 14-32416. On August 27, 2014 the Court entered an order approving joint administration of both bankruptcy cases. All references to the “Company” in this Report also include Oryon Technologies, LLC.

 

Confirmation of Plan of Reorganization

 

On November 7, 2014 (the “Confirmation Date”) the Court entered an order (the “Confirmation Order”), a copy of which is attached as Exhibit 2.1, confirming the Modified First Amended Chapter 11 Plan under Chapter 11 of the Bankruptcy Code (the “Plan”), a copy of which is attached as Exhibit 2.2, proposed by the Company and EFL Tech B.V., a Netherlands corporation and the majority shareholder of the Company (“EFL Tech”). The Plan is subject to certain conditions, including the execution and delivery of the license agreement described below under “Material Features of the Plan,” that must be satisfied prior to the effective date of the Plan (the “Effective Date”).

 

The following is a summary of certain material features of the Plan as confirmed by the Bankruptcy Court pursuant to the Confirmation Order. This summary is not intended to be a complete description of the Plan, and is qualified in its entirely by reference to the full text of the Plan. Capitalized terms used but not defined herein shall have the meanings given to them in the Plan.

 

Material Features of the Plan

 

In General. The Plan provides for payment of the undisputed pre-petition claims listed in the Company’s Plan and all post-petition payables from (A) the proceeds of a $1.37 million cash infusion made by EL Flexible Signs or its affiliates, in exchange for 80 million newly-issued shares of common stock, $0.001 par value (the “Common Stock”), of the Company and a $250,000 payment by EFL Tech, constituting the final payment under the subscription agreement dated January 21, 2014 (the “Subscription Agreement”) pursuant to which EFL Tech was issued 129,832,877 newly-issued shares of Common Stock as specified therein and (B) cash on hand. The Subscription Agreement is incorporated herein by reference to Exhibit 2 to the Schedule 13D dated January 21, 2014 as filed with the Securities and Exchange Commission by EFL Tech and its affiliates on January 31, 2014.

 

The Plan further provides for the waiver of claims held by insiders and the establishment of a disputed claims reserve in the approximate amount of $106,000 for a single claim in dispute. EFL Tech will continue to be the majority shareholder of the Company and the Company will be operated by a new board of directors. The Plan also provides for dismissal of all claims in the litigation pending before the Bankruptcy Court and incorporates a settlement agreement dated September 24, 2014 between the Company, a former officer of the Company, and certain shareholders and their respective affiliates settling various disputes and controversies between the parties, as amended by the Plan (the “Settlement Agreement”). A copy of the Settlement Agreement is attached as Exhibit 2.3.

 

  

Settlement Agreement. Pursuant to the Settlement Agreement the following actions will be effective as of the Effective Date:

 

1.         The Company will pay M. Richard Marcus, the former Chief Executive Officer of the Company and certain of his affiliates, MRM Acquisitions, LLC and Oryon Capital LLC (collectively, “Marcus”), and Myant Capital Partners, Inc., an Ontario, Canada garment manufacturer, and Tony Chahine, the Chief Executive Officer of Myant (collectively, “Myant”) a combined total of $1.7 million, in the form of $600,000 in cash and execute and deliver to Marcus and Myant a promissory note dated November 7, 2014 in the original principal amount of $1.1 million (the “Promissory Note”). The Promissory Note will bear interest at six percent (6%) per annum, mature two (2) years from the date of the Promissory Note, and be secured by the Company’s patents and other intellectual property rights pursuant to a security agreement of even date (the “Security Agreement”). The Promissory Note will provide for principal payments as follows: $500,000 on or before ninety (90) days following the date of the Promissory Note, followed by fifteen (15) equal monthly payments each in the amount of $40,000 beginning ten (10) months after the date of the Promissory Note until maturity. The Promissory Note and Security Agreement are attached as Exhibits 10.1 and 10.2.

 

2.         The Company will execute and deliver to Myant an exclusive license agreement with respect to the Company’s patents covering the geographic region of Canada. The terms of the license agreement are currently under negotiation.

 

3.         Marcus will surrender for cancellation all of their shares of Common Stock in the Company, consisting of 6,205,227 shares of Common Stock owned by Oryon Capital, LLC, 18,289,700 shares of Common Stock owned by MRM Acquisitions, LLC, and 1,300,310 shares of Common Stock owned by M. Richard Marcus, for a combined total of 25,795,237 shares of Common Stock.

 

4.         All parties to the Settlement Agreement will fully release each other and dismiss all legal actions involving the Company.

 

Additional Agreements. Thomas P. Schaeffer, Larry L. Sears, Richard K. Hoesterey, and Clifton Shen, the former members of the board of directors of the Company, and Donald M. Crook (collectively, the “Surrendering Parties”), and the Company, the members of the new board of directors of the Company, and EFL Tech and its affiliates will fully release each other from all legal actions involving the Company. In addition, the Surrendering Parties will surrender all shares of Common Stock and related warrants and options held in their names and in the names of their affiliates and family members. The total outstanding shares of Common Stock surrendered for cancellation by the Surrendering Parties was 8,025,127 shares of Common Stock.

 

Executory Contracts and Unexpired Leases. All pre-petition executory contracts and unexpired leases will be assumed by the Company, except for those executory contracts and/or unexpired leases rejected by the Company on or before the Confirmation Date or otherwise rejected under the Plan.

 

  

Equity Securities of the Company as of the Effective Date. As of the Effective Date the total issued and outstanding shares of Common Stock of the Company will be 428,345,951, after giving effect to the issuance of 209,832,877 shares of Common Stock to EFL Tech and EL Flexible Signs or its assigns and the surrender of 33,820,364 shares of Common Stock by Marcus and the Surrendering Parties.

 

The issuance of such shares of Common Stock described above will be exempt from registration under the Securities Act pursuant to (i) Section 1145 of the Bankruptcy Code, which generally exempts from such registration requirements the issuance of securities under a plan of reorganization, and/or (ii) Section 4(a)(2) of the Securities Act because the issuance does not involve any public offering.

 

Information Regarding Assets and Liabilities of the Company. Information regarding the assets and liabilities of the Company as of the most recent practicable date is hereby incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, as filed with the Securities and Exchange Commission on August 14, 2014.

 

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

 

The information set forth under Item 1.03 of this Report is incorporated into this Item 2.03 by reference.

 

Item 3.02

Unregistered Sales of Equity Securities

 

The information set forth under Item 1.03 of this Report is incorporated into this Item 3.02 by reference.

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

Pursuant to the Plan, the following directors will cease to be members of the board of directors of the Company as of the Effective Date: Thomas P. Schaeffer, Larry L. Sears, Richard K. Hoesterey and Clifton Shen. In addition, Thomas P. Schaeffer will cease to serve as Chief Executive Officer of the Company. Pursuant to the Plan, as of the Effective Date, George Hatzimihail, John Kapeleris and Steven Battaia will be appointed members of the board of directors of the Company. Certain information with respect to the new directors is set forth below:

 

Mr. George Hatzimihail is a serial entrepreneur with over thirty years of international business experience. As a current Chairman and Director of international companies, including EFL Tech International Group NV and EFL Tech BV, and a respected leader and consultant, Mr. Hatzimihail has the experience to help guide the Company and its investors to obtain maximum value and potential growth from the future market applications of electroluminescence. Mr. Hatzimihail brings a wealth of knowledge and experience in board management and governance, business development and value creation.

 

 

 

Dr. John Kapeleris (FAIM, MAICD, BSc(Hons), GradDipMgt, MBA, DBiotech) has over twenty-four years of experience in product development, technology commercialization, business development and executive management. Early in his career, Dr. Kapeleris was responsible for developing and commercializing sixteen new technology products that achieved international market success and as a key member of the executive team that grew Panbio Ltd into a global multi-million dollar organization. Dr. Kapeleris has held numerous roles including R&D Manager, Quality Manager, Business Development Manager, VP Sales & Marketing and Deputy CEO. He has also worked on a number of national and international technology and commercialization projects. Dr. Kapeleris was recently the CEO/Deputy CEO/General Manager of the “Australian Institute for Commercialisation” delivering a range of solutions to industry, academia and government sectors. Dr. Kapeleris has been involved in a number of successful international IP licensing deals, technology commercialization projects and corporate development projects, including seven successful capital raisings and one IPO. Dr. Kapeleris holds director positions on several corporate boards, including EFL Tech International Group NV, Infinity Care Ltd and PraxisCorporation Pty Ltd, and on advisory boards providing corporate governance and strategy advice. Dr. Kapeleris has received numerous awards, including Australian Small Business of the Year, Australian Quality Award, Innovative Exporter Award, Top 100 Fastest Growing Companies and Manager of the Year, Australian Institute of Management Awards.

 

Mr. Steven Battaia is currently the Managing Director of All Metal Solutions, a multi-million dollar custom metal fabricator for a wide range of clients in the mining, manufacturing, agriculture and construction industries, including clients such as BMA, Rio-Tinto, Anglo American, BHP Billiton, OneSteel, Xtrata, Downer EDI, Theiss and Thyssen Krupp. Mr. Battaia is widely experienced in all aspects of the management design and construction as well as project management of metal fabrication projects. He has successfully built a $14.5 million business through his proven ability to develop, motivate and lead management teams to maximize the company’s profitability and efficiency. Mr. Battaia brings a wealth of experience in corporate management, growing manufacturing businesses and market knowledge of the mining, manufacturing and construction industries where electroluminescence technology can be applied.

 

The newly appointed board of directors intends to elect George Hatzimihail to serve as President and Chairman of the Board and Steven Battaia to serve as Secretary and Treasurer of the Company. The directors and officers will serve without compensation until further action by the board of directors.

 

Item 9.01 Financial Statements and Exhibits

 

Exhibit No.

Description

 

2.1

Order Confirming Debtors’ Chapter 11 Plan of Reorganization

 

2.2

Plan Proponents’ Modified First Amended Chapter 11 Plan

 

2.3

Settlement Agreement dated September 14, 2014

 

10.1

Secured Promissory Note dated November 7, 2014

 

10.2

Intellectual Property Security Agreement dated November 7, 2014

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 13, 2014	ORYON TECHNOLOGIES, INC.
	By:	/s/ George Hatzimihail
		George Hatzimihail, Director

 

  

EXHIBIT INDEX

 

Exhibit No.

Description

 

2.1

Order Confirming Debtors’ Chapter 11 Plan of Reorganization

 

2.2

Plan Proponents’ Modified First Amended Chapter 11 Plan

 

2.3

Settlement Agreement dated September 24, 2014

 

10.1

Secured Promissory Note dated November 7, 2014

 

10.2

Intellectual Property Security Agreement dated November 7, 2014

 

 

EXHIBIT 2.1

 

IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION
IN RE:	§
ORYON TECHNOLOGIES, INC.	§	CASE NO. 14-32293
ORYON TECHNOLOGIES, LLC	§	CASE NO. 14-32416
DEBTORS.	§
	§
EIN: 26-2626737; 57-1337314	§
	§
4251 KELLWAY CIRCLE ADDISON, TEXAS 75001	§ §	JOINTly administered under 14-32293

 

ORDER CONFIRMING DEBTORs’ chapter 11 PLAN OF REORGANIZATION

 

Oryon Technologies, Inc. and Oryon Technologies, LLC (“Debtors”) submitted its First Amended Disclosure Statement (“Disclosure Statement”) and First Amended Plan of Reorganization on October 2, 2014.¹ The Court conducted a hearing on November 5, 2014 (“Confirmation Hearing”), to consider the Plan Proponents’ First Amended Chapter 11 Plan of Reorganization as modified (“Plan”).

 

The Court has reviewed and considered the arguments and evidence of counsel. Based on the foregoing and the Court’s ruling on the record at the hearing, the Court finds that the Plan as modified as set forth herein is confirmable and satisfies all confirmation requirements under 11 U.S.C. § 1129 for the reasons stated herein.

 

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. §157(b)(2)(L) and (O) on which this Court can enter a final judgment. This matter is referred to the Court under the District’s Standing Order of Reference. Venue is proper under 28 U.S.C. §§ 1408 and 1409. The following represents the Court’s findings of fact and conclusions of law made pursuant to Federal Rules of Bankruptcy Procedure 7052 and 9014.

 

 

NOW, THEREFORE, THE COURT HEREBY FINDS AND CONCLUDES:

 

A.  Solicitation.

 

On October 3, 2014, copies of the Disclosure Statement and the First Amended Plan of Reorganization, the Ballot approved by this Court, and a notice of the Confirmation Hearing were sent by United States First Class Mail, postage prepaid, to all known Claim Holders and Equity Interest Holders eligible to vote on the Plan in accordance with the Order Granting Debtors’ Motion for an Order (i) Approving Disclosure Statement; (ii) Approval of Form of Ballot; and (iii) Setting Voting and Confirmation Deadlines, entered on October 3, 2014 [Dckt. No. 215].

 

B.  Notice.

 

As approved by the Court, notice of the Confirmation Hearing was provided to parties in interest as described in ¶ A above. Such notice was adequate and sufficient under § 102(1) of the Bankruptcy Code and Bankruptcy Rule 2002.

 

C.  Approval of Modifications.

 

On November 4, 2014, the Debtors filed their Motion to Approve Non-Material Modifications to the First Amended Plan (the “Motion to Modify”) to clarify certain terms of the Plan [Dckt. No. 243]. In addition, this Order contains additional modifications to the terms of the First Amended Plan as is customary to resolve actual and potential objections and to correct and clarify Plan terms. Collectively, this Order and certain of the changes outlined in the Debtors’ Motion to Approve Non-Material Modifications are hereinafter referred to as the “Modifications.” The Debtors’ Modifications are hereby approved, as modified as follows (all references are to the Modified First Amended Plan attached to the Motion to Modify):

 

¹ Capitalized terms not otherwise defined herein shall have the meanings ascribed in the Plan.

 

 

1.

The added language to Section 4.1.2 refers to the $225,000 fee cap agreed to by Jackson Walker and those fees being payable by EFL. Those fees are payable by Oryon, not EFL, and do not include the application of any retainer held by Jackson Walker, but only fees to be paid.

 

2.

The final sentence of the third paragraph of Section 4.2.2 stating “Myant shall be the agent under the note, receiving all payments due thereunder and retaining sole ability to enforce the note against the Debtors” shall be deleted.

 

3.

The final sentence of the third paragraph of Section 4.2.3 stating “Myant shall be the sole party to enforce the note against the debtors or receive payment thereunder” shall be deleted.

 

4.

In Section 4.2.5, the changes shall be modified to clarify that EFL Tech B.V. is receiving 129,832,877 shares in Oryon Technologies, Inc., and EL Flexible Signs or its affiliate(s) will receive 80 million shares in Oryon Technologies, Inc.

 

5.

In Section 6.2, the following sentence shall be added: “This section only applies to those parties to the Plan B Settlement.”

 

6.

The deadline to object to claims contained in Section 11.1 shall be amended from one year to 30 days from the Effective Date.

 

Pursuant to 11 U.S.C. § 1127(a), the Court finds that the Modifications to the Plan after solicitation conformed with 11 U.S.C. §§ 1122, 1123 and 1125, and that the Modifications did not negatively affect the treatment of any Creditor or Class that voted to accept the Plan.

 

D.

Plan Compliance with § 1129(a)(1).

 

As required by § 1129(a)(1) of the Bankruptcy Code, the Plan complies with the applicable provisions of the Bankruptcy Code, including, without limitation, as follows:

 

 

·

As required by Bankruptcy Code § 1123(a)(1), the Plan properly designates classes of Claims and Equity Interests and classifies only substantially similar Claims and Equity Interests in the same Classes pursuant to § 1122 of the Bankruptcy Code. As required by Bankruptcy Code § 1123(a)(2), the Plan properly specifies Classes 1 and 5 as unimpaired, and Classes 2, 3, and 4 as impaired.

 

·

As required by Bankruptcy Code §§ 1123(a)(3)-(4), the Plan provides the treatment which each Holder of an Impaired Claim is to receive, and the Plan provides the same treatment or its economic equivalent for each Claim or Equity Interest by each particular Class.

 

·

As required by Bankruptcy Code § 1123(a)(5), the Plan provides adequate means for its implementation.

 

·

As required by Bankruptcy Code § 1123(a)(6), the charter or similar document of the Debtor will include a provision prohibiting the issuance of nonvoting equity securities and distributing the voting power to the extent required under § 1123(a)(6).

 

E.

Plan Compliance with § 1129(a)(2).

 

As required by Bankruptcy Code § 1129(a)(2), the Debtors have complied with all applicable provisions of the Bankruptcy Code. Simultaneously with the solicitation of acceptances of the Plan, the Debtors timely transmitted a copy of the Disclosure Statement and Plan and forms of Ballot approved by this Court to all known Holders of Claims and Equity Interests eligible to vote on the Plan. As noted above, the Disclosure Statement was found by the Court to contain “adequate information” following notice and a hearing in compliance with Bankruptcy Rule 3017.

 

F.

Compliance with § 1129(a)(3).

 

Based upon the entire record of the proceedings before the Court, the Court finds that the Plan is proposed in good faith, and not by any means forbidden by law, and therefore complies with the requirements of Bankruptcy Code § 1129(a)(3).

 

 

G.

Compliance with § 1129(a)(4).

 

Pursuant to orders previously entered in the Bankruptcy Cases approving the retention of Professionals, payments made or to be made by the estate for services rendered or for costs and expenses incurred in connection with the Bankruptcy Cases or in connection with the Plan and incident to the Bankruptcy Cases, are subject to the approval of the Court as reasonable. Accordingly, the Plan complies with § 1129(a)(4) of the Bankruptcy Code.

 

H.

Plan Compliance with § 1129(a)(5).

 

The Debtors have disclosed the identity and affiliations of the directors and officers proposed to serve as directors and officers, in compliance with § 1129(a)(5)(A) of the Bankruptcy Code. Accordingly, the Plan complies with § 1129(a)(5)(A)(ii) of the Bankruptcy Code. The Debtors have disclosed the identity of any insider that will be employed or retained by the Reorganized Debtors, and the nature of such compensation for such insider. Accordingly, the Plan complies with § 1129(a)(5)(B) of the Bankruptcy Code.

 

I.

Plan Compliance with § 1129(a)(6).

 

The Plan provides for the Reorganized Debtors to conduct the prior business of the Debtors, and there is no governmental regulatory commission with jurisdiction over the rates of the Debtors. Thus, § 1129(a)(6) of the Bankruptcy Code is inapplicable.

 

J.

Plan Compliance with § 1129(a)(7).

 

As required by Bankruptcy Code § 1129(a)(7), and as evidenced by the Liquidation Analysis related to the Disclosure Statement and the testimony at the Confirmation Hearing, each Holder of a Claim or Equity Interest in an Impaired Class either accepted the Plan or will receive or retain property of a value that is not less than the amount that such Holder would receive or retain were the Debtors liquidated under Chapter 7 of the Bankruptcy Code.

 

 

K.

Plan Compliance with § 1129(a)(8).

 

Classes 1 and 5 are unimpaired. Classes 2, 3, 4, are impaired. As set forth in the Ballot Summary filed herein and admitted into evidence at the Confirmation Hearing, Classes 2, 3, and 4 were solicited, and Class 4 voted to accept the Plan. Notwithstanding the existence of Impaired Classes that did not vote to accept the Plan, confirmation is proper under Code § 1129(b), as set forth in ¶ T below.

 

L.

Compliance with § 1129(a)(9).

 

The Plan provides for the treatment of administrative and priority claimants in accordance with the requirements of Bankruptcy Code § 1129(a)(9) (except to the extent that a Holder has agreed otherwise).

 

M.

Compliance with § 1129(a)(10).

 

Based upon the Ballot Summary filed herein and admitted into evidence at the Confirmation Hearing, more than one-half in number and at least two-thirds in amount of those actually voting in Class 4 have voted to accept the Plan.

 

N.

Feasibility (§ 1129(a)(11)).

 

Based upon the testimony offered and exhibits introduced at the Confirmation Hearing, the Debtors demonstrated that the Plan is feasible and is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtors.

 

O.

Compliance with § 1129(a)(12).

 

All fees payable under 28 U.S.C. § 1930 have been paid or will be paid as such fees become due.

 

P.

Compliance with § 1129(a)(13).

 

The Debtors have no retiree benefits subject to § 1114 of the Bankruptcy Code. Therefore, § 1129(a)(13) is inapplicable.

 

Q.

Compliance with § 1129(a)(14).

 

The Debtors are not not required by a judicial or administrative order, or by statute, to pay domestic support obligations. Therefore § 1129(a)(14) is inapplicable.

 

 

R.

Compliance with § 1129(a)(15).

 

The Debtors are not an individual. Therefore § 1129(a)(15) is inapplicable.

 

S.

Compliance with § 1129(a)(16).

 

The Debtors are a moneyed, business or commercial corporation. Therefore, § 1129(a)(16) is inapplicable.

 

T.

Other Requirements.

 

No other Chapter 11 plan has been confirmed in this case and, therefore, the Plan complies with Bankruptcy Code § 1129(c). The principal purpose of the Plan is neither the avoidance of taxes nor the avoidance of the application of § 5 of the Securities Act of 1933, as amended, and, therefore, the Plan complies with § 1129(d) of the Bankruptcy Code.

 

U.

Assumption and Rejection of Executory Contracts and Unexpired Leases.

 

Except as may otherwise be provided in the Plan, all executory contracts and unexpired leases that have not been previously rejected shall, pursuant to § 365 of the Bankruptcy Code, be assumed by the Debtors on the Effective Date.

 

V.

Objections to Confirmation.

 

Objections to confirmation of the Plan have been withdrawn, or are hereby OVERRULED for the reasons stated on the record, except as otherwise provided herein.

 

i.

Resolution of Objection by Dallas County

 

The inclusion of this section in this Confirmation Order hereby resolves issues raised by Dallas County related to confirmation of the Plan.

 

 

Dallas County is the holder of an Allowed secured claim for ad valorem business personal property taxes for tax years 2011 and 2014 in the amount of $4,003.93. Dallas County shall receive interest on its claim at the state statuory rate from the petition date through the effective date and from the effective date through the date of payment in full pursuant to 11 U.S.C. §§ 506(b), 511, and 1129. Dallas County shall retain the liens that secure all amounts ultimately due until it receives payment in full of its claim. Dallas County shall receive payment of its claim in equal monthly installments commencing on the effective date. These payments shall occur over a period of months calculated to pay its claim in full no later than the fifth anniversary of the petition date. Section 6.3 of the Plan is supplemented to include that the Reorganized Debtors shall only be entitled to receive 2 notices of default. Upon a third event of default, Dallas County shall be entitled to pursue collection of all amounts owed pursuant to state law outside of the Bankruptcy Court without further notice. Failure to timely pay postpetition taxes prior to the state law delinquency date shall constitute an event of default under the plan solely with regard to Dallas County. All requests pursuant to § 9.3 of the Plan shall be submitted to counsel for Dallas County.

 

W.

Judicial Notice.

 

Judicial notice hereby is taken of the docket of the Bankruptcy Cases maintained by the Clerk of the Bankruptcy Court.

 

X.

Findings and Conclusions.

 

The foregoing findings and conclusions satisfy the requirements of Federal Rule of Bankruptcy Procedure 7052. All findings of facts shall also be deemed to be conclusions of law hereunder and vice versa. All offers of proof and discussions for the record at the Confirmation Hearing shall constitute additional findings and conclusions with respect to this Order.

 

IT IS THEREFORE ORDERED AS FOLLOWS: 

 

A.

Confirmation.

 

The Plan, as attached to this Order, is hereby confirmed. The terms of this Order are controlling if any inconsistency exists between the Plan and this Order.

 

 

 

B.

Binding Effect.

 

The Plan, its provisions and this Order shall be, and hereby are, binding upon the Debtors, any Creditor or Equity Interest Holder of the Debtors and any party provided notice of the Case, whether or not the Claim or Equity Interest of such Creditor, Equity Interest Holder or party is Impaired under the Plan and whether or not such Creditor or Equity Interest Holder has accepted the Plan. The provisions of this Order are nonseverable and mutually dependent. 

 

C.

Effect of Plan.

 

Upon the Effective Date, except as expressly provided in the Plan or this Order, this Order shall permanently bar and enjoin all holders of Liens, Claims, and Equity Interests arising prior to the Effective Date from asserting or continuing to assert against the Debtors, their Estates, or their Assets, any and all Claims or Liens, whether liquidated or unliquidated, contingent or noncontingent, asserted or unasserted, fixed or unfixed, matured or unmatured, legal or equitable or known or unknown, based on any act or omission, transaction or other activity of any kind or nature that occurred prior to the Effective Date. 

 

Except as expressly provided in the Plan or this Order, upon the Effective Date, the entry of this Confirmation Order shall permanently enjoin all Persons that have held, currently hold or may hold a Claim against, or be owed obligations by, the Estates, or who have held, currently hold or may hold Equity Interests in the Debtors, from taking any of the following actions on account of such Claim, obligation, or Equity Interest: (i) commencing, conducting, or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind against the Debtors or the Debtors’ Estates; (ii) enforcing, levying, attaching, collecting, or otherwise recovering in any manner or by any means, directly or indirectly, any judgment, award, decree, or order against the Debtors or the Debtors’ Estates; (iii) creating, perfecting or enforcing in any manner, directly or indirectly, any lien, charge, encumbrance or other Lien of any kind against the Debtors or their Estates, (iv) asserting any setoff, right of subrogation or recoupment of any kind, directly or indirectly, against any debt, liability or obligation due to the Debtors or their Estates; and (v) proceeding in any manner, directly or indirectly, in any place whatsoever against the Debtors or their Estates.

 

  

Except as expressly provided in the Plan or this Order, the rights afforded in the Plan and the payments and Distributions to be made pursuant to the Plan shall be in exchange for and in complete satisfaction and release of all existing Liens or Claims, and shall terminate all Equity Interests of any kind, nature or description whatsoever against or in the Debtors or any of their Assets or properties. Except as expressly provided in the Plan or this Order, all existing Liens or Claims against the Debtors and their Assets, and Equity Interests in the Debtors, shall be, and shall be deemed to be, terminated, and all Holders of such Liens, Claims, or Equity Interests shall be precluded and enjoined from asserting, directly or indirectly, against the Debtors, their Estate, or their Assets, any further Lien, Claim, or Equity Interest based upon any act or omission, transmission, or other activity of any kind or nature that occurred prior to the Effective Date, whether or not such Holder has filed a Proof of Claim or Proof of Equity Interest. 

 

Except as expressly provided in the Plan or this Order, any judgment at any time obtained, to the extent that such judgment is a determination of the liability of the Debtors or their assets with respect to any Lien, Claim, or Equity Interest treated by the Plan and this Order, shall be, and hereby is, declared to be void, other than for Final Orders of this Court allowing Claims or Liens or granting similar relief.

 

As of the Effective Date, and except as otherwise expressly provided in this Order and the Plan, title to the Debtors’ Assets shall be vested in the Reorganized Debtor free and clear of all Liens, Claims, and Equity Interests in accordance with § 1141 of the Bankruptcy Code, with any prohibitions upon such transfer being null and void.. No party shall thereafter seek to create, perfect, or enforce any pre-Effective Date Lien of any nature whatsoever. The vesting of assets shall be deemed not to include any Assets that were abandoned, sold, rejected, or otherwise disposed of prior to the Effective Date.

 

  

The vesting of property in or the transfer of property to the Reorganized Debtor to take place on the Effective Date (i) is a legal, valid and effective transfer of property, (ii) vests the Reorganized Debtor with good title to such property, (iii) does not constitute avoidable transfers under the Bankruptcy Code or under applicable non-bankruptcy law, and (iv) does not subject the Reorganized Debtor, the Debtors, or the Debtors’ Estates, to any liability by reasons of such transfers under the Bankruptcy Code or under applicable non-bankruptcy law, including, without limitation, laws affecting successor or transfer liability.

 

D.

Compromises and Settlements.

 

The Court finds that the compromises and settlements as embodied in each of the Mediation Settlement Agreement and the Plan B Settlement Agreement, as the Plan B Settlement Agreement as modified in the Plan, are fair and appropriate in light of the circumstances of the Bankruptcy Cases and the evidence before the Court. Those compromises and settlements satisfy the requirements of Rule 9019 of the Federal Rules of Bankruptcy Procedure and the standard set forth in In re Jackson Brewing Co., 624 F.2d 599 (5th Cir. 1980) and Matter of Foster Mortgage Corp., 68 F.3d 914 (5th Cir. 1995), and are hereby approved.

 

E.

Releases and Exculpation.

 

The release, exculpation and related provisions set forth in Article 15 of the Plan and otherwise provided for in the Plan are hereby approved.

 

 

The following releases are incorporated herein and shall have the effect of a final judgment on the merits of any claims released therein. The Debtors, EFL, and the Debtors’ Existing Board (Thomas A. Schaeffer, Richard K. Hoesterey, Clifton Kwang-Fu Shen, and Larry L. Sears), Donald M. Crook, and George Hatzimihail, John P. Kapeleris, and Steve Battia (collectively “New Board”) (together with the Debtors, EFL, the Existing Board, and Donald M. Crook, “Plan B Parties”) entered into the Plan B Settlement Agreement.

 

As of the Effective Date and pursuant to the Plan B Settlement Agreement, the Debtors, New Board, and EFL shall be deemed to have released and forever discharged Jackson Walker L.L.P., together with all of its partners, principals, employees, agents, legal representatives, insurers, assignees, predecessors, and successors, and the Existing Board and Crook, together with all of their agents, legal representatives, attorneys, insurers, assignees, successors, heirs, and assigns from any and all claims, debts, demands, actions, causes of actions, suits, controversies, proceedings, accounts, covenants, agreements, promises, judgments, executions, damages, attorney fees, costs (including out-of-pocket expenses, court costs, expert witness fees, etc.) and other liabilities of any nature whatsoever, whether sounding in contract, tort, or otherwise, whether matured or unmatured, accrued or unaccrued, liquidated or unliquidated, absolute or contingent, known or unknown, whether now existing or that might arise hereafter, for, upon, or by reason of any matter, act, omission, action, inaction, conduct, cause, event, happening or thing whatsoever from the beginning of time through the date hereof, which the Debtors, New Board and EFL, or any of their affiliates, employees, agents, and attorneys, and any predecessor or successor thereof could have asserted or could assert against Jackson Walker L.L.P., the Existing Board and Crook related directly or indirectly to EFL, the Debtors, the Bankruptcy Cases, the Subscription Agreement (including all exhibits thereto) and the transactions contemplated thereby, the State Court Case, the Removed Action and any and all litigation, disagreements, controversies, work done, services rendered or actions taken with respect to any of the foregoing, provided however, that the releases contained herein do not apply to any enforcement of any of the Plan B Settlement Agreement Parties’ duties and obligations in the Plan B Settlement Agreement, provided however, that nothing therein shall be construed to be a release (a) of any law firm not a signatory to the Plan B Settlement Agreement, including without limitation, Andrews & Kurth, LLP; (b) of Richard Marcus, MRM Acquisitions, or Oryon Capital, LLC, or (c) and by EFL of Shen.

 

 

As of the Effective Date and pursuant to the Plan B Settlement Agreement, Jackson Walker, L.L.P., the Existing Board, and Crook shall be deemed to have released and forever discharged the Debtors, New Board, and EFL together with all of its partners, principals, employees, agents, legal representatives, insurers, assignees, predecessors, and successors, from any and all claims, debts, demands, actions, causes of actions, suits, controversies, proceedings, accounts, covenants, agreements, promises, judgments, executions, damages, attorney fees, costs (including out-of-pocket expenses, court costs, expert witness fees, etc.) and other liabilities of any nature whatsoever, whether sounding in contract, tort, or otherwise, whether matured or unmatured, accrued or unaccrued, liquidated or unliquidated, absolute or contingent, known or unknown, whether now existing or that might arise hereafter, for, upon, or by reason of any matter, act, omission, action, inaction, conduct, cause, event, happening or thing whatsoever from the beginning of time through the date hereof, which Jackson Walker, L.L.P., the Existing Board, and Crook or any of their affiliates, employees, agents, and attorneys, and any predecessor or successor thereof could have asserted or could assert against the Debtors, New Board, and EFL related directly or indirectly to the Debtors, the Bankruptcy Cases, the Subscription Agreement (including all exhibits thereto) and the transactions contemplated thereby, the State Court Case, the Removed Action and any and all litigation, disagreements, controversies, work done, services rendered or actions taken with respect to any of the foregoing, provided however, that the releases contained therein do not apply to any enforcement of any of the Plan B Settlement Agreement Parties’ duties and obligations in the Plan B Settlement Agreement, provided however, that nothing in the Plan B Settlement Agreement shall be construed to be a release of any law firm not a signatory to the Plan B Settlement Agreement, provided however that no member of the Existing Board is releasing any right to indemnification, defense, or advance of expenses or any other rights against any insurer or reinsurer or under the Great American Insurance Company Exec Pro Public Solution Insurance Group Director and Officer Liability Policy issued May 2, 2013 [Policy No. NSP2380734] with all amendments and endorsements or against any subsequent directors or officers insurance, or against the Debtors, including but not limited to any rights related to any applicable bylaws and/or Nevada Revised Statutes sections, as applicable; and provided however that nothing contained in the Plan B Settlement Agreement shall effectuate a release by Shen of EFL.

 

 

As of the Effective Date and pursuant to the terms of the Mediation Settlement Agreement, the Debtors and their past and current officers and directors, EFL and its past and current officers and directors, Marcus, MRM Acquisition, LLC and its past and current officers and directors, Oryon Capital, LLC and its past and current officers and directors, Tony Chahine, and Myant its past and current officers and directors shall be deemed to have given a full, final, and complete release of each other from all causes of action, any and all claims, demands, or suits, known or unknown, fixed or contingent, liquidated or unliquidated, whether or not asserted in this litigation, from the beginning of time through the Effective Date , arising from or related to the events and transactions which are the subject matter of the Mediation Settlement Agreement including but not limited to the Removed Action. The foregoing release shall run to and inure to the benefit of the attorneys of the Debtors, EFL, Marcus, and Myant (save and except for, in any event, Andrews Kurth, LLP), and each of their agents, employees, insurers, affiliates, officers, directors, shareholders, trustees, partners, heirs, assigns, and legal representatives, including but not limited to members of the Existing Board, provided however, that the releases contained herein do not apply to any enforcement of any of the Mediation Settlement Agreement Parties’ duties and obligations in the Mediated Settlement Agreement. As of the Effective Date, the Removed Action shall be dismissed with prejudice.

 

 

Pursuant to Section 4.2.4 of the Plan and in exchange for the agreement of Akin Gump Strauss Hauer & Feld LLP (“Akin Gump”) to accept a cash payment of $320,000 as payment in full of its Class 4 General Unsecured Claim, each of the Debtors and each of EFL Tech International Group, N.V., a Holland legal entity, EFL Tech B.V., a Holland corporation, EFL Holdings Tech B.V., a Holland legal entity, EFL Holdings Pty Ltd., an Australian legal entity, EFL Tech Pty Ltd., an Australian legal entity, for itself and its representatives, agents, attorneys, predecessors, successors, insurers, administrators and assigns (collectively, the “Akin Gump Releasors”) (i) hereby forever releases, discharges and indemnifies Akin Gump and its partners, principals, employees, agents, advisers, legal representatives, attorneys, insurers, assignees, predecessors, successors, heirs and assigns (collectively, the “Akin Gump Releasees”) from any and all claims, debts, demands, actions, causes of actions, suits, controversies, proceedings, accounts, covenants, agreements, promises, judgments, executions, damages, attorney fees, costs (including out-of-pocket expenses, court costs, expert witness fees, etc.) and other liabilities of any nature whatsoever, whether sounding in contract, tort or otherwise, whether matured or unmatured, accrued or unaccrued, liquidated or unliquidated, absolute or contingent, known or unknown, whether now existing or that might arise hereafter, for, upon or by reason of any matter, act, omission, action, inaction, conduct, cause, event, happening or thing whatsoever from the beginning of time through the date hereof, which any of the Akin Gump Releasors or any of their affiliates, employees, agents and attorneys, and any predecessor or successor thereof have asserted or could assert against any one of the Akin Gump Releasees related directly or indirectly to Akin Gump’s Class 4 General Unsecured Claim, the legal services, promissory note, or receivables underlying such claim, any of the Akin Gump Releasors, or any litigation, disagreements, controversies, work done, services rendered, disputes or actions taken with respect to any of the foregoing. Each Akin Gump Releasor further agrees that it will not initiate against any Akin Gump Releasee any legal, equitable or arbitration proceeding of any nature based on any claim, whether known or unknown, whether in law or equity, whether arising out of contract or tort, existing on or prior to the date of this Order. In granting this release, each Akin Gump Releasor has represented and warranted to Akin Gump that it has not transferred or assigned any claim or cause of action of any kind against any Akin Gump Releasee to any other person or entity.

 

 

Releases by Holders of Claims and Equity Interests. As of the Effective Date, and except as otherwise specifically provided for in the Plan, the Mediation Settlement, or the Plan B Settlement Agreement, to the fullest extent permitted by applicable law, as such law may be extended or interpreted subsequent to the Effective Date, for good and valuable consideration provided by each of the Debtors, the other material contracts, instruments, releases, and agreements entered in connection with the Plan, and the contributions of the Debtors to facilitate the implementation of the Plan, each Holder of a Claim or Equity Interest shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever, released and discharged the Debtors and each of them from any and all Claims, Equity Interests, obligations, rights, suits, damages, causes of action, remedies and liabilities whatsoever, including any derivative claims, asserted or assertable on behalf of the Debtors, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, fixed or contingent, matured or unmatured, existing or hereafter arising, in law, equity or otherwise, that such Person would have been legally entitled to assert (whether individually or collectively) based in whole or in part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, and the Bankruptcy Cases, the Plan, or the Disclosure Statement, or related agreements, instruments or other documents that did or would have given rise to a Claim in the Bankruptcy Cases, other than claims or liabilities arising out of or relating to any act or omission of the Debtors that constitutes gross negligence, fraud or willful misconduct, as determined by a Final Order.

 

 

Exculpation. From and after the Effective Date, the Exculpated Parties shall neither have nor incur any liability to any Person (including, without limitation, any Holder of a Claim or Equity Interest) for any action taken, suffered or omitted to be taken in connection with or related to the Debtors, the Estate, or the Bankruptcy Case, including, but not limited to, formulating, disseminating, implementing, confirming, consummating or administering (a) the Plan (including soliciting acceptances or rejections thereof), (b) the Disclosure Statement or any contract, instrument, release, or other agreement or document entered into or any action taken or omitted to be taken in connection with the Plan and/or (d) any Distributions made pursuant to the Plan, except, in all cases, for acts or omissions constituting willful misconduct or gross negligence as determined by Final Order of a court of competent jurisdiction, and in all respects, such parties shall be entitled to rely upon the advice of Professionals with respect to their duties and responsibilities under the Plan, and such reliance shall form an absolute defense to any claim, cause of action or liability. Without limiting the generality of the foregoing, the Exculpated Parties shall be entitled to and granted the protections of § 1125(e) of the Bankruptcy Code.

 

F.

Corporate Documents.

 

Each of the Debtors’ articles of incorporation and bylaws shall be amended and all necessary corporate action shall be taken in accordance with Section 8 of the Plan.

 

 

Any officer of the Debtors are authorized and empowered to execute documents and take any actions as may be necessary, advisable or appropriate to amend certificates of incorporation, bylaws or to effectuate the Plan with or without the approval of any board of directors. All transactions that are required to occur on the Effective Date under the terms of the Plan are deemed to have occurred simultaneously, and the relevant approvals shall be deemed to have occurred prior to such transactions authorized herein. 

 

The Secretary of State for each relevant jurisdiction is instructed to accept this Order in place of any evidence of resolutions or other corporate actions necessary to amend and restate such certificates of incorporation or other filings which might otherwise be required.

 

Pursuant to §§ 1123(a) and 1142(a) of the Bankruptcy Code and the provisions of this Confirmation Order, the Plan, and all implementing documents, shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law. The Debtors are authorized and empowered to make any and all modifications to any and all documents included as part of the Plan or otherwise that do not materially modify the terms of such documents and are consistent with the Plan. 

 

G.

No Tax or Assessment; Governmental Authorities.

 

Each federal, state, commonwealth, local, foreign or other governmental agency is hereby directed and authorized to accept any and all documents, mortgages, deeds of trust, releases and instruments necessary or appropriate to effectuate, implement or consummate the transactions contemplated by the Plan or this Order.

 

Pursuant to § 1146(a) of the Bankruptcy Code, the issuance, transfer, or exchange of a security, or the making or delivery of an instrument of transfer under the Plan may not be taxed under any law imposing a stamp tax or similar tax.

 

 

The transactions contemplated in the Plan are not subject to and are exempt from any applicable bulk transfer or similar law. 

 

H.

Rejection of Certain Executory Contracts and Unexpired Leases.

 

Except as may otherwise be provided in the Plan, all executory contracts and unexpired leases that have not been previously rejected shall, pursuant to § 365 of the Bankruptcy Code, be assumed by the Debtors on the Effective Date. 

 

I.

Rejection Claims Arising From Executory Contracts and Unexpired Leases.

 

Any and all Claims arising from rejection of any executory contract under the Plan shall constitute general unsecured pre-petition Claims and must be filed within thirty (30) days of the Effective Date. Proofs of Claim for damages allegedly arising from the rejection of any executory contract pursuant to this Plan or the Confirmation Order of any Executory Contract to which a Claimant is a party must be filed with the Bankruptcy Court and served on the Reorganized Debtor not later than thirty (30) days after the Effective Date. All Proofs of Claim for such damages not timely filed and properly served as prescribed herein shall be forever barred and the holder of such a Claim shall not be entitled to participate in any Distribution under the Plan. 

 

J.

Manner of Notices and Distributions.

 

All notices, requests, and Distributions to a holder of a Claim or Equity Interest shall be sent (i) to the address of the Holder set forth in the Schedules, unless superseded by the address set forth on such Holder’s Proof of Claim, Administrative Expense or Proof of Equity Interest, (ii) to such address delivered to the Reorganized Debtors and their counsel in a notice at least ten (10) Business Days before the applicable Distribution Date, or (iii) to the last known address of the Holder according to the books and records of the Debtors. Notices and requests may also be sent to a holder of a Claim or Interest at the fax number or email address provided on the Ballot or in the books and records of the Debtors. Notices and requests shall be deemed received by a holder of a Claim or Interest (i) if sent by mail, on the second Business Day after deposit in the United States mail, postage prepaid; (ii) if sent by overnight courier, on the first Business Day after delivery to such courier; (iii) if sent by fax or email on a Business Day prior to 5:00 p.m. (Prevailing Central Time), on such Business Day (or if after 5:00 p.m., Prevailing Central Time, or not on a Business Day, on the next Business Day).

 

 

In all other respects, Distributions under the Plan shall be made in accordance with Article 9 of the Plan. 

 

K.

Retention of Jurisdiction.

 

The Court shall, and hereby does, retain jurisdiction of this Case for all of the purposes set forth in Article 13 of the Plan, including the enforcement of the Plan B Settlement, and for the purposes provided in §§ 1127(b) and 1142 of the Bankruptcy Code and Bankruptcy Rule 3020(d). 

 

L.

Bar Date for the Filing and Assertion of Administrative Expense Claims, Including Professional Fee Claims but Excluding Ordinary Course Administrative Claims.

 

Pursuant to the Plan, the Administrative Claims Bar Date is November 3, 2014. Requests for payment of Administrative Claims included within a proof of claim are of no force and effect, and are disallowed in their entirety. Except for Professional Persons approved by the Bankruptcy Court under § 327, any holder of a claim under §§503 and/or 507 that fails to file their claim(s) by the Administrative Claims Bar Date shall be forever barred from asserting the claim(s) against the Debtors or its estate, and the Debtors and its estate shall be forever discharged from any and all indebtedness or liability with respect to the claim.

 

 

All Professionals requesting compensation or reimbursement of expenses pursuant to §§ 327, 328, 330, 331, 503(b) and 1103 of the Bankruptcy Code for services rendered before the Effective Date (including, without limitation, any compensation requested by any professional or any other entity for making a substantial contribution in the Debtors’ Bankruptcy Cases) shall file and serve on the Reorganized Debtors and the U.S. Trustee an application for allowance of compensation and reimbursement of expenses no later than thirty (30) days after the Confirmation Date. Objections to any Professional application for compensation or reimbursement of expenses must be filed and served on the Reorganized Debtors and the Professional(s) to whose application(s) the objections are addressed no later than fifty (50) days after the Confirmation Date. Any fees of Professionals and reimbursements or expenses incurred by the Debtors subsequent to the Effective Date may not be paid without application to the Bankruptcy Court. 

 

Administrative Expense Claims must be in the form of an application or motion for payment. Such application or motion must filed and be served upon the Reorganized Debtors and its counsel at the addresses set forth in the Plan or in this Order so that it is received no later than five (5) Business Days after the application or motion is filed with the Court.

 

The Debtors shall file on the docket of the Bankruptcy Cases and send a notice of confirmation, notice of the administrative bar date for Professional Claims and the bar date for claims relating to contracts and leases rejected under the Plan to all creditors no later than ten (10) days after the Confirmation Date. 

 

M.

Statutory Fees.

 

Any fees due pursuant to 28 U.S.C. §1930(a)(6) as of the Confirmation Date shall be paid in full on the Effective Date of the Plan. After confirmation, the Reorganized Debtors shall be responsible pursuant to 28 U.S.C. §1930(a)(6) for timely payment of United States Trustee quarterly fees incurred post-confirmation until the Bankruptcy Case is closed by the Court. The Reorganized Debtors shall file with the Court and serve on the United States Trustee a quarterly financial report for each quarter (or portion thereof) that the Bankruptcy Case remains open in a format prescribed by the United States Trustee.

 

 

N.

Nonoccurrence of Effective Date.

 

In the event that the Effective Date does not occur, then (i) the Plan; (ii) the assumption or rejection of executory contracts or unexpired leases pursuant to the Plan; (iii) any document or agreement executed pursuant to the Plan, (iv) any actions, releases, waivers or injunctions authorized by this Confirmation Order; and (v) this Confirmation Order shall be deemed null and void. In such event, nothing herein or in the Plan or acts taken in connection therewith shall be deemed to prejudice in any manner the rights of the Debtors or any party in interest in further proceedings or to constitute an admission, finding of fact, conclusion of law, res judicata or collateral estoppel of any nature. 

 

O.

Notice of Confirmation.

 

Service of the notice of confirmation shall be made by first class mail on or before ten (10) days after the Confirmation Date upon the following: (i) the Office of the United States Trustee; (ii) all known creditors of the Debtors; (iii) all equity security holders of the Debtors; and (iv) all parties having requested notices in these cases. Such notice shall constitute good and sufficient notice of this Order in compliance with the provisions of Rules 3020(c) and 2002 of the Federal Rules of Bankruptcy Procedure. The Debtors shall also file the notice of Confirmation Date on the docket of the Bankruptcy Cases. 

 

P.

Waiver of Stay.

 

The stay of this Order provided by any Bankruptcy Rule (including Bankruptcy Rules 3020(e), 6004(h) and 6006(d), whether for fourteen (14) days or otherwise, is hereby waived, and this Order shall be effective and enforceable immediately upon its entry by the Court.

 

 

Q.

Final Order.

 

This Order is a Final Order, and the period in which an appeal must be filed shall commence upon the entry hereof.

 

R.

Miscellaneous.

 

The Reorganized Debtors shall file a notice of the Effective Date with the Court within five (5) days after the Effective Date.

 

Notice of Professional Fee Requests under section 4.1.1 of the Plan shall be served on the same parties listed in section 16.11 of the Plan.

 

The failure to specifically describe or include any provision of the Plan in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of this Court that the Plan be approved and confirmed in its entirety. Each provision of the Plan shall be deemed authorized and approved by this Order and shall have the same binding effect of every other provision of the Plan, whether or not mentioned in this Order. In the event of any inconsistencies between the Plan and this Order, this Order shall govern.

 

II. CONCLUSION

 

This Court finds that (1) Plan Proponents’ First Amended Chapter 11 Plan meets all of the requirements of 11 U.S.C. § 1129 and of the Bankruptcy Code; (2) and the Plan is feasible. For the reasons stated herein, the Plan is CONFIRMED.

 

###END OF ORDER###

 

 

 

EXHIBIT 2.2

 

Patricia B. Tomasco

State Bar No. 01797600

Bruce J. Ruzinsky

State Bar No. 17469425

Monica S. Blacker

State Bar No. 00796534

Matthew Cavenaugh

State Bar No. 24062656

Jennifer F. Wertz

State Bar No. 24072822

Jackson Walker LLP

901 Main Street, Suite 6000

Dallas, Texas 75201

(214) 953-6000 – Main Telephone

(214) 953-5822 – Main Facsimile

 

Counsel for Debtors

 

Vickie L. Driver

State Bar No. 24026886

Courtney J. Hull

State Bar No. 24061297

Coffin & Driver, PLLC

7557 Rambler Road, Suite 200

Dallas, Texas 75231

(214) 377-4848

(214)377-4858 – Fax

 

Counsel for EFL Tech B.V.

 

IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION
IN RE:	§
ORYON TECHNOLOGIES, INC.	§	CASE NO. 14-32293
ORYON TECHNOLOGIES, LLC	§	CASE NO. 14-32416
DEBTORS.	§
	§
EIN: 26-2626737; 57-1337314	§
	§
4251 KELLWAY CIRCLE ADDISON, TEXAS 75001	§ §	JOINT ADMINISTRATION REQUESTED

PLAN PROPONENTS’ modified FIRST AMENDED CHAPTER 11 PLAN

 

COMES NOW Oryon Technologies, Inc. and Oryon Technologies, LLC (“Debtors”), and EFL Tech B.V. (“EFL” together with the Debtors “Plan Proponents”) pursuant to § 1121(a) propose the following Chapter 11 Plan for the Debtors (the “Plan”).

 

  

article 1

SUMMARY OF THE PLAN¹

 

Generally, the Plan provides for payment of prepetition claims listed in the Debtors’ schedules and post-petition payables from a $1.37 million cash infusion made by EL Flexible Signs in exchange for 80 million shares in Oryon Technologies, Inc., and a $250,000 payment by EFL as the final payment under the Subscription Agreement with Oryon Technologies, Inc. The Plan further provides for the waiver of claims held by insiders and provides for the establishment of a disputed claims reserve for claims in dispute, as well as recapitalization from EFL, who will be the majority shareholder upon confirmation of the Plan. The Plan provides that the Debtors will be operated by a new board of directors (“New Board”) subsequent to confirmation of the Plan. The Plan also provides for dismissal of all claims in the litigation pending before the Bankruptcy Court (“Removed Action”). The Plan incorporates the Plan B Settlement Agreement as the means for implementation of the Plan.

 

The Plan does not anticipate using any future revenues nor any recoveries from any claims or lawsuits in paying any claims under this Plan. The Plan is fully funded through new equity infusions.

 

Additionally, each Executory Contract to which the Debtors are a party shall be assumed as of the Confirmation Date unless the Debtors have rejected a particular Executory Contract before the Confirmation Date, or such Executory Contract is otherwise rejected under the Plan or is the subject of a pending motion to reject such Executory Contract on the Confirmation Date.

 

article 2

DEFINITIONS, CONSTRUCTION, AND INTERPRETATION

 

2.1

Definitions

 

The capitalized terms used herein shall have the respective meanings set forth below:

 

“Administrative Expense” or “Administrative Claim” means any cost or expense of the administration of the Chapter 11 Cases incurred on or before the Effective Date entitled to priority under § 507(a)(2) and Allowed under § 503(b) of the Bankruptcy Code, including all Fee Claims (i.e. allowances of compensation or reimbursement of expenses of Professional Persons to the extent allowed by the Bankruptcy Court under the Bankruptcy Code) and all fees and charges assessed against the Estates pursuant to 28 U.S.C. § 1930.

 

“Administrative Expense Request” means a request for payment of an Administrative Expense.

 

“Allowed” when used with respect to any Claim, except for a Claim that is an Administrative Claim, means (i) such Claim to the extent it is not a Disputed Claim; (ii) such Claim to the extent it may be set forth pursuant to any stipulation or agreement that has been approved by Final Order; or (iii) a Disputed Claim, proof of which was filed timely with the Bankruptcy Court and (a) as to which no objection was filed by the Claim Objection Deadline, unless such Claim is to be determined in a forum other than the Bankruptcy Court, in which case such Claim shall not become Allowed until determined by Final Order of such other forum and Allowed by Final Order of the Bankruptcy Court; or (b) as to which an objection was filed by the Objection Deadline, to the extent Allowed by Final Order. With respect to Administrative Claims, “Allowed” means an Administrative Claim allowable pursuant to section 503 of the Bankruptcy Code and (a) an Administrative Expense Request was filed on or before the applicable Administrative Expense Bar Date or pursuant to other order of the Bankruptcy Court and is allowed by Final Order, (b) for which an Administrative Expense Request is not filed and which is listed in the Schedules and not listed as disputed, contingent or unliquidated or (c) is deemed Allowed under the Plan or by prior order of the Bankruptcy Court.

 

¹ Capitalized terms used but not defined in this summary shall have the meanings ascribed to them in Article 2 of the Plan.

 

 

“Assets” means all assets (and any proceeds thereof) as of the Effective Date of each of the Debtors, of any nature whatsoever, including, without limitation, all property of the Estates under and pursuant to section 541 of the Bankruptcy Code, Cash, Causes of Action, Insurance Policies and each Debtor’s rights, interests and property, real and personal, tangible and intangible.

 

“Avoidance Actions” means any and all rights, claims and Causes of Action arising under any provision of chapter 5 of the Bankruptcy Code or under applicable non-bankruptcy laws to the extent made applicable under chapter 5 of the Bankruptcy Code, including, without limitation claims for payments made to creditors within ninety (90) days of the Petition Date that may be avoidable under 11 U.S.C. § 547.

 

“Ballot” means the ballot form distributed to Holders of Impaired Claims entitled to vote on which such Holders are to cast their votes to accept or reject the Plan.

 

“Bankruptcy Cases” means the above-styled cases commenced by the Debtors under Chapter 11 of the Bankruptcy Code on the Petition Date.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as amended and codified at title 11 of the United States Code.

 

“Bankruptcy Court” means the Bankruptcy Court unit of the United States District Court for the Northern District of Texas, Dallas Division, or such other court having jurisdiction over these Chapter 11 Cases.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as prescribed by the United States Supreme Court pursuant to § 2075 of title 28 of the United States Code, and the Local Rules of the Bankruptcy Court.

 

“Bar Date” means September 16, 2014, the final date for the filing of proofs of Claims set by the Bankruptcy Court or such other date as may apply to a particular Claim pursuant to a duly entered order of the Bankruptcy Court, which may be the Confirmation Order..

 

“Business Day” means any day on which commercial banks and federal courts are open for business in Dallas, Texas.

 

“Cash” means legal tender of the United States of America or Cash equivalents.

 

“Causes of Action” means, without limitation, any and all Claims, actions, adversary proceedings, causes of action (including causes of action arising under any section of the Bankruptcy Code, state, federal or other non-bankruptcy law), counterclaims, cross-claims, liabilities, obligations, rights, suits, debts, sums of money, damages, judgments and demands of any of the Debtors or any of their Estates whatsoever, whether pending or not pending, known or unknown, direct, indirect or derivative, whether or not scheduled as the asset of any Debtors, disputed or undisputed, legal or equitable, absolute or contingent, including, specifically, but without limitation, Causes of Action against Insiders and all other Avoidance Actions.

 

  

“Claim” shall have the meaning set out in § 101 of the Bankruptcy Code.

 

“Claim Objection Deadline” means the deadline for the Debtors to file objections to Claims other than Administrative Claims established under Section 10.1 of the Plan.

 

“Claim Register” shall mean the Claim Register maintained by the Court for the Debtors.

 

“Claimant” or “Creditor” means the Holder of a Claim.

 

“Class” means a group of Claims or Equity Interests classified by the Plan pursuant to § 1122(a)(1) of the Bankruptcy Code.

 

“Collateral” means any property of the Debtors subject to a valid and enforceable Lien or right of setoff permissible under 11 U.S.C. § 553 to secure the payment of a Claim.

 

“Confirmation Date” means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order.

 

“Confirmation Hearing” means the hearing(s) held by the Bankruptcy Court pursuant to § 1128 of the Bankruptcy Code, as it may be continued from time to time, on confirmation of the Plan.

 

“Confirmation Order” means the order of the Bankruptcy Court confirming the Plan pursuant to § 1129 of the Bankruptcy Code.

 

“Court” means the Bankruptcy Court.

 

“Debtors” means Oryon Technologies, Inc. and Oryon Technologies, LLC.

 

“Disallowed” means, with reference to a Claim or Interest, any Claim or Interest, or any portion thereof, that (i) has been Disallowed by a Final Order; (ii) is (x) not Scheduled or is Scheduled as zero or as contingent, disputed or unliquidated, and (y) as to which no Proof of Claim or Proof of Interest has been timely filed or deemed timely filed by the Bankruptcy Court; (iii) has been withdrawn by agreement of the Debtors and the Holder thereof; (iv) has been withdrawn by the Holder thereof; or (v) any Claim or Interest that is not Allowed as of the Final Distribution Date.

 

“Disclosure Statement” means the disclosure statement filed by the Debtors relating to the Plan, including the schedules and exhibits thereto, as the same may be amended from time to time.

 

  

“Disputed” when used with respect to a Claim, means a Claim against the Debtors (i) that is listed in the Debtors’ Schedules as disputed, contingent or unliquidated regardless of whether a proof of claim has been filed or not; (ii) that is listed in the Debtors’ Schedules as undisputed, liquidated and not contingent and as to which a proof of Claim has been filed with the Bankruptcy Court, to the extent the proof of Claim amount exceeds the scheduled amount; (iii) that is not listed in the Debtors’ Schedules, but as to which a proof of Claim has been filed with the Bankruptcy Court; (iv) as to which an objection has been or may be filed; or (v) as to which a request for estimation has been interposed, which request for estimation has not been withdrawn or determined by a Final Order. Notwithstanding the foregoing, after the Claim Objection Deadline, including any extensions thereto, only Claims to which an Objection has been filed shall be deemed Disputed Claims with respect to Claims for which a proof of Claim has been filed.

 

“Disputed Claims Reserve” means the escrow account established by the Debtors on the Effective Date in the amount of the Disputed Claims as estimated prior to confirmation, not to exceed the amount of Andrews Kurth’s Claim, to be funded from the $1.37 million equity contribution by EL Flexible Signs.

 

“Distribution” means a payment and/or distribution of Cash or other consideration to be made to Holders of Allowed Claims in accordance with the terms and conditions of the Plan.

 

“EFL” means EFL Tech International Group, N.V., a Holland corporation; EFL Tech B.V., a Holland corporation; EFL Tech Holdings Tech B.V., a Holland corporation; EFL Tech Pty. Ltd., an Australian corporation; and EFL Holdings Pty. Ltd., an Australian corporation.

 

“Effective Date” means a Business Day as soon as practicable after the Confirmation Date, on which (i) no stay of the Confirmation Order is in effect, and (ii) the conditions to the effectiveness of the Plan specified in Article 5 hereof have been satisfied or waived.

 

“Equity Interest” means the interest represented by an “equity security,” as defined in § 101 of the Bankruptcy Code, including all preferred and common stock in the Debtors.

 

“Estate” or “Estates” means one or more of the Debtors’ estates created pursuant to § 541 of the Bankruptcy Code upon the commencement of the Bankruptcy Cases.

 

“Exculpated Parties” means the Debtors’ and the Debtors’ Professionals, EFL Tech, B.V., and its counsel, Coffin & Driver PLLC.

 

“Executory Contracts” means all unexpired leases and executory contracts as such terms are used within § 365 of the Bankruptcy Code to which any one of the Debtors was a party as of the Petition Date.

 

“Face Amount” means, with reference to any Claim: (a) if the Holder of such Claim has not filed a Proof of Claim by the applicable Bar Date and there is no Final Order fixing the Allowed amount of such Claim, (i) the amount of such Claim that is listed in the Schedules as undisputed, non-contingent and liquidated, or (ii) if no amount is listed in the Schedules, zero ($0) dollars; (b) if the Holder of such Claim has filed a Proof of Claim by the applicable Bar Date, (i) the liquidated amount as stated in such Proof of Claim, or (ii) if no liquidated amount is listed in such Proof of Claim then zero ($0) dollars; (c) an amount fixed or estimated by order of the Bankruptcy Court; or (d) in all other cases, zero ($0) dollars.

 

  

“Fee Application” means an application of a Professional Person under §§ 328, 330, 331 and/or 503 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Chapter 11 Cases.

 

“Fee Claim” means a Claim under §§ 328, 330, 331 or 503 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Chapter 11 Cases.

 

“Final Decree” means the decree contemplated under Bankruptcy Rule 3022.

 

“Final Order” means (i) an order as to which the time to appeal, petition for certiorari or motion for reargument, rehearing, reconsideration, new trial, or to alter or amend findings or judgment has expired and as to which no appeal, petition for certiorari or other proceedings for re-argument, rehearing, reconsideration, new trial, or to alter or amend findings or judgment shall then be pending, or (ii) in the event that an appeal, writ of certiorari, re-argument, rehearing, reconsideration, new trial, or motion to alter or amend findings or judgment thereof has been sought, such order shall have been affirmed by the highest court to which such order was appealed, or certiorari has been denied or from which reargument, rehearing, reconsideration, new trial, or motion to alter or amend findings or judgment was sought, and the time to take any further appeal, petition for certiorari or move for reargument, rehearing, reconsideration, new trial, or to alter or amend findings or judgment shall have expired; provided, however, that no order shall fail to be a Final Order solely because of the possibility that a motion pursuant to Rule 59 or 60 of the Federal Rules of Civil Procedure, or any analogous rule, may be filed with respect to such order.

 

“General Unsecured Claim” means any Claim against the Debtors that is not a Priority Tax Claim, Priority Non-Tax Claim, Secured Claim, Intercompany Claim, Subordinated Claim or an Administrative Expense.

 

“Governmental Unit” means a governmental unit as defined in § 101(27) of the Bankruptcy Code.

 

“Holder” means the beneficial owner of any Claim, Administrative Expense, Equity Interest or other interest or right to receive Distribution under the Plan.

 

“Impaired” has the meaning ascribed to such term in § 1124 of the Bankruptcy Code.

 

“Insider” means an insider as defined in § 101(31) of the Bankruptcy Code.

 

“Insurance Policy” means any policy of insurance and any agreements relating thereto covering one or more of the Debtors or their respective Assets, directors, officers, members, managers, employees and fiduciaries, or that may be available to provide coverage for Claims against the Debtors or any of the foregoing, including, without limitation, any general liability, property, casualty, umbrella or excess liability policy(ies), errors and omissions, director and officer or similar executive, fiduciary and organization liability policy(ies) (A, B or C coverage), and any tail with respect thereto.

 

  

“Intercompany Claim” means (a) any account reflecting intercompany book entries by one Debtor with respect to any other Debtor, (b) any Claim that is not reflected in such book entries and is held by one Debtor against any other Debtor, or (c) any Claim held by an affiliate of a Debtor against a Debtor.

 

“IRS” means the Internal Revenue Service.

 

“Lien” has the meaning ascribed to such term in section 101(37) of the Bankruptcy Code (but a lien that has been avoided under Chapter 5 of the Bankruptcy Code shall not constitute a Lien).

 

“New Board” shall mean the board of directors consisting of George Hatzimihail, John P. Kapeleris, and Steve Battia.

 

“Person” means any individual, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, association, joint venture, estate, unincorporated organization, or a Governmental Unit or any agency or political subdivision thereof.

 

“Petition Date” means May 6, 2014 for the Debtor Oryon Technologies, Inc., and May 16, 2014 for the Debtor Oryon Technologies, LLC.

 

“Plan” means this Chapter 11 Plan, either in its present form or as it may hereafter be altered, amended or modified from time to time.

 

“Plan Documents” means the documents that aid in effectuating the Plan as specifically identified as such herein, which will be substantially in the form filed by the Debtors with the Bankruptcy Court prior to the conclusion of the Confirmation Hearing.

 

“Priority Non-Tax Claim” means any Claim accorded priority in right of payment under § 507(a) of the Bankruptcy Code, other than an Administrative Expense or Priority Tax Claim, to the extent such Claim is entitled to priority in payment under § 507(a).

 

“Priority Tax Claim” means any Claim of a Governmental Unit of the kind specified in §§ 502(i) or 507(a)(8) of the Bankruptcy Code.

 

“Professional” means a person retained or to be compensated pursuant to §§ 327, 328, 330, 503(b) or 1103 of the Bankruptcy Code.

 

“Proof of Claim or Proof of Equity Interest” means a proof of Claim or Interest filed in the Bankruptcy Cases pursuant to § 501 of the Bankruptcy Code and/or any order of the Bankruptcy Court, together with supporting documents.

 

“Pro Rata” means the proportion that the amount of an Allowed Claim in a particular Class of Claims bears to the aggregate amount of all Claims in such Class of Claims, including Disputed Claims, but not including Disallowed Claims.

 

“Representatives” means any officer, director, financial advisor, attorney, law firm, accounting firm, financial advising firm, and other Professional Person.

 

“Scheduled,” with respect to any Claim, means listed on the Schedules.

 

  

“Schedules” means the Schedules of Assets and Liabilities and the Statements of Financial Affairs filed by the Debtors as required by § 521 of the Bankruptcy Code and Bankruptcy Rule 1007, as such Schedules and Statements have been or may be supplemented or amended.

 

“Secured Claim” means a Claim secured by a Lien or right of setoff allowable under 11 U.S.C. § 553 on property of a Debtor, which Lien is valid, perfected and enforceable under applicable law, is not subject to avoidance under the Bankruptcy Code or other applicable non-bankruptcy law and which is duly established in the Chapter 11 cases, but only to the extent of the value of the Collateral that secures payment of such Claim.

 

“Subordinated Claim” means a Claim that is subordinated to all Allowed Claims, other than a Claim that is (a) subordinated pursuant to section 510(b) or (c) of the Bankruptcy Code, (b) a Non-Compensatory Penalty Claim or (c) an Untimely Claim.

 

“Taxing Authority” means the holder of an Allowed Priority Tax Claim.

 

“Tax Liens” means any statutory liens securing any Allowed Claim of any Taxing Authority.

 

“Tax Regulations” means income tax regulations promulgated under the Internal Revenue Code of 1986, as amended (the “Tax Code”).

 

“Unclaimed Distribution Date” means 120 days after the actual date that a Distribution, or request for information under Section 9.3 of the Plan, is made.

 

“Untimely Claim” means a Claim that was tardily filed after the applicable Bar Date.

 

“U.S. Trustee” means the Office of the United States Trustee for the Northern District of Texas.

 

“Voting Record Date” means that date set by the Bankruptcy Court for determining the holders of claims and interests entitled to vote to accept or reject the Plan.

 

2.2

Interpretation

 

Unless otherwise specified, all section, article, and exhibit references in the Plan are to the respective section in, article of or exhibit to the Plan, as the same may be amended, waived, or modified from time to time. The headings in the Plan are for convenience of reference only and shall not limit or otherwise affect the provisions of the Plan. Words denoting the singular number shall include the plural number and vice versa, and words denoting one gender shall include the other gender. All exhibits and schedules attached to the Plan are incorporated herein by such attachment.

 

  

2.3

Application of Definitions and Rules of Construction Contained in the Bankruptcy Code

 

Words and terms defined in § 101 of the Bankruptcy Code shall have the same meaning when used in the Plan, unless a different definition is given in the Plan. The rules of construction contained in § 102 of the Bankruptcy Code shall apply to the construction of the Plan.

 

2.4

Other Terms

 

The words “herein,” “hereof,” “hereto,” “hereunder” and others of similar import refer to the Plan as a whole and not to any particular section, subsection or clause contained in the Plan. Any reference to a person or Holder of a Claim or Interest includes that person or Holder’s successors and assigns.

 

2.5

Integration Clause

 

This Plan is a complete, whole, and integrated statement of the binding agreement between the Debtors, creditors, Equity Interests and the parties-in-interest upon the matters herein. Parol evidence shall not be admissible in an action regarding this Plan or any of its provisions.

 

2.7

Computation of Time

 

In computing any period of time prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.

 

article 3

CLASSIFICATION AND IMPAIRMENT OF CLAIMS AND EQUITY INTERESTS

 

3.1

Classification

 

Administrative Claims (unclassified)

Priority Tax Claims (unclassified)

Class 1: Priority Non-Tax Claims

Class 2: Claim of Myant Capital Partners, Inc.

Class 3: Claim of the Marcus Group

Class 4: General Unsecured Claims

Class 5: Equity Interests

 

3.2

Impaired Classes of Claims and Equity Interests

 

Classes 2, 3, and 4 are Impaired under the Plan. Class 4 is entitled to receive Distributions. Holders of Claims in Classes 2, 3, and 4 are entitled to vote to accept or reject the Plan. Claims in Class 5 are unimpaired, and therefore, shall not be entitled to vote to accept or reject this Plan.

 

  

3.3

Impairment and Classification Controversies

 

If a controversy arises as to whether any Claim or Equity Interest or any Class of Claims or Class of Equity Interests is Impaired under the Plan or is classified incorrectly, the Bankruptcy Court shall, upon notice and a hearing, determine such controversy on or before the Voting Record Date.

 

3.4

Class Acceptance Requirement

 

A Class of Claims shall have accepted the Plan if it is accepted by at least two-thirds in amount and more than one-half in number of the holders of Allowed Claims in such Class that have voted on the Plan.

 

3.5

Cramdown

 

If any Class of Claims or Equity Interests shall fail to accept the Plan in accordance with § 1126(c) of the Bankruptcy Code, the Bankruptcy Court may still confirm the Plan in accordance with § 1129(b) of the Bankruptcy Code. The Plan Proponents will seek confirmation of the Plan pursuant to § 1129(b) with respect to any non-accepting Class.

 

3.6

Elimination of Classes

 

Any Impaired Class that is not occupied as of the date of the Confirmation Hearing by an Allowed Claim or Allowed Equity Interest or a Claim or Equity Interest temporarily Allowed pursuant to Bankruptcy Rule 3018 shall be deemed deleted from the Plan for purposes of voting on acceptance or rejection of the Plan and determining whether the Plan has been accepted by such class pursuant to 11 U.S.C. § 1129.

 

article 4

PROVISIONS FOR TREATMENT OF CLAIMS

AND EQUITY INTERESTS UNDER THE PLAN

 

Claims against and Equity Interests in the Debtors shall be treated under the Plan as follows:

 

4.1

Unclassified Claims

 

4.1.1 Administrative Claims:

 

General: Subject to the bar date provisions herein, unless a Holder of an Allowed Administrative Claim agrees to different treatment, each Holder of an Allowed Administrative Claim shall receive Cash equal to the unpaid portion of such Allowed Administrative Claim as soon as reasonably practicable after the later of the Effective Date and the date the claim becomes Allowed.

 

Professional Fee Claims: Holders of Allowed Professional Fees shall receive the amount allocated to such Professional on or as soon as reasonably practicable after the later of the Effective Date and the Date the Professional Fee Claim becomes Allowed.

 

Payment of Statutory Fees: All fees payable pursuant to 28 U.S.C. § 1930 shall be Allowed and shall be paid in Cash when due.

 

  

4.1.2 Bar Date for Administrative Claims:

 

Except as otherwise provided in this Article 4, requests for payment of Administrative Claims must be included within a motion or application and filed by a deadline to be set by the Court, which shall be the same date as the deadline for filing objections to confirmation of the Plan (“Administrative Claims Bar Date”). Holders of Administrative Claims that are required to file a request for payment of such Claims and that do not file such requests by the Administrative Claims Bar Date specified in this section shall be forever barred from asserting such Claims against the Debtor or any of its respective property. Requests for payments of Administrative Claims included within a proof of claim are of no force and effect, and are disallowed in their entirety as of the Confirmation Date unless such Administrative Claim is subsequently filed in a timely fashion as provided herein, and allowed. Except for Professional Persons approved by the Bankruptcy Court under 11 U.S.C. § 327, any holder of a claim under 11 U.S.C. §§ 503 and/or 507 that fails to file their claim(s) by the Administrative Claims Bar Date shall be forever barred from asserting the claim(s) against the Debtors or their estates, and the Debtors and their estates will be forever discharged from any and all indebtedness or liability with respect to the claim. Administrative claims for Professional Persons must be filed no later than thirty (30) days after the Confirmation Date. Any cap on the fees and expenses of Jackson Walker L.L.P., as counsel to the Debtors, set forth in the Plan B Settlement Agreement to be paid by Debtors shall be increased to $225,000 for its fees and expenses related to these cases. The payment of this amount shall be made on or before December 20, 2014.

 

4.1.3 Impairment & Voting:

 

Administrative claims are not a true class and are neither impaired nor unimpaired. Acceptance of the Plan from such Claimants will not be solicited.

 

4.1.4 Payment of Statutory Fees: All fees payable pursuant to 28 U.S.C. § 1930 shall be Allowed and shall be paid in Cash when due.

 

4.1.5 Priority Tax Claims:

 

Each holder of an Allowed Priority Tax Claim shall be paid in full, through monthly cash payments commencing on the Effective Date, its Allowed Priority Tax Claims, together with interest at the rate required by 11 U.S.C. § 511, or as otherwise agreed, over a period through the fifth anniversary of the Petition Date.

 

At the Reorganized Debtor’s option, Holders of Allowed Priority Tax Claims shall receive (i) 100% of the Allowed amount of such Claim on or as soon as reasonably practicable after the later of the Effective Date and the date the Claim becomes Allowed; (ii) 100% of the unpaid Allowed amount plus interest to be paid in Cash over a period not later than 5 years from the Petition Date; or (iii) such alternative treatment as leaves unaltered the legal, equitable, and contractual rights of the Holders of such Claims. With respect to payment of Allowed Priority Tax Claims held by the Internal Revenue Service (“IRS”), payment will begin as soon as reasonably practicable after the later of the Effective Date and the Date the Claim becomes Allowed, but no later than a year after entry of an order confirming the Plan.

 

  

As of the date of this Plan, the Claims Register reflects aggregate asserted Priority Tax Claims of $2,077.33. The Dallas County Appraisal District filed a proof of claim in the amount of $3,641.56 on September 9, 2014. The Reorganized Debtor will review, reconcile, and file any necessary objections to Priority Tax Claims.

 

4.2

Classified Claims and Interests

 

4.2.1

Class 1: Allowed Priority Non-Tax Claims

 

Classification: Class 1 consists of Priority Non-Tax Claims.

 

Treatment: Unless the Holder of a Priority Non-Tax Claim agrees to different treatment, each Holder of an Allowed Priority Non-Tax Claim shall receive 100% of its Allowed Priority Non-Tax Claim on or as soon as reasonably practicable after the later of the Effective Date and the date the Priority Non-Tax Claim becomes Allowed.

 

Voting: Class 1 is unimpaired, and Class 1 creditors are conclusively deemed to have accepted the Plan. Class 1 Creditors are not entitled to vote to accept or reject the Plan.

 

4.2.2

Class 2: Claim of Myant

 

Classification: Class 2 consists of the Claim of Myant Capital Partners, Inc.

 

Treatment: The treatment of Myant under the Plan is contained in the Mediation Settlement Agreement, attached hereto as Exhibit A, executed after a mediation of the parties held on September 22 and 23, 2014.

 

The Mediation Settlement Agreement contemplates a $300,000 payment to Myant upon the order of confirmation becoming final. The Mediation Settlement Agreement further provides that the Debtors shall execute a $1.1 million promissory note jointly in favor of Myant and the Marcus Group, and, within 90 days following the execution of such note, the Debtors shall pay Myant $250,000. Myant shall be the agent under the note, receiving all payments due thereunder and retaining sole ability to enforce the note against the Debtors.

 

All of the provisions in the Mediation Settlement Agreement resolve Myant’s Claim in full.

 

Myant’s claim, as filed in the Debtors’ cases, shall be allowed at the value of the amount Myant is to be paid under the Mediation Settlement Agreement, or $850,000, pursuant expressly to the terms of the Mediation Settlement Agreement.

 

Voting: Class 2 is impaired, and Class 2 Creditors are entitled to vote to accept or reject the Plan.

 

4.2.3

Class 3: Claim of the Marcus Group

 

Classification: Class 3 consists of the Claims of Marcus (as defined in the Mediation Settlement Agreement).

 

  

Treatment: The treatment of the Marcus Claims under the Plan is contained in the Mediation Settlement Agreement, attached hereto as Exhibit A, executed after a mediation of the parties held on September 22 and 23, 2014.

 

The Mediation Settlement Agreement contemplates a $300,000 payment to Marcus upon the order of confirmation becoming final. The Mediation Settlement Agreement further provides that the Debtors shall execute a $1.1 million promissory note jointly in favor of Myant and the Marcus Group, and, within 90 days following the execution of such note, the Debtors shall pay the Marcus Group $250,000. Myant shall be the sole party to enforce the note against the debtors or receive payment thereunder.

 

All of the provisions in the Mediation Settlement Agreement resolve the Marcus Claims and the Removed Action as defined in section 13.1(n) herein in full.

 

The Marcus Group claims, as filed in the Debtors’ cases, shall be allowed at the value of the amount the Marcus Group is to be paid under the Mediation Settlement Agreement, or $850,000 pursuant expressly to the terms of the Mediation Settlement Agreement.

 

Voting: Class 3 is impaired, and Class 3 Creditors are entitled to vote to accept or reject the Plan.

 

4.2.4

Class 4: General Unsecured Claims

 

Classification: Class 4 consists of General Unsecured Claims, except those claims waived under the Plan B Settlement Agreement. Class 4 includes the General Unsecured Claim of Akin Gump Strauss Hauer & Feld LLP, deemed to be in the amount of $490,000. Pursuant to the terms of the Plan B Settlement Agreement, incorporated into the Plan, Akin Gump Strauss Hauer & Feld receives a release in exchange for accepting $320,000 as payment in full of their Class 4 claim. Class 4 also includes the General Unsecured Claim of Andrews Kurth, LLP, filed in the amount of $106,488.43, to which the Debtors plan to object to based upon grounds related to the services provided.

 

Treatment: Each Holder of an Allowed General Unsecured Claim shall receive payment in full (including post-petition interest at the Federal Judgment Rate (as set forth at http://www.txnd.uscourts.gov/publications/pjrate.html)) from the Petition Date to the date of payment of its Allowed General Unsecured Claim on the Effective Date, or within ten (10) days of the entry of an Order allowing the Claim, whichever is later.

 

Voting: Class 4 is impaired, and Class 4 Creditors are entitled to vote to accept or reject the Plan.

 

4.2.5

Class 5: Equity Interests

 

Classification: Class 5 consists of Equity Interests.

 

  

Treatment: Holders of Equity interests in the Debtors shall receive or retain any interest in the Debtors to the same extent held prior to the Petition Date. Unless Classes 1, 2, 3, and 4 are paid in full, no distributions shall be made to Equity Interests. The Subscription Agreement dated as of January 21, 2014 by and between Oryon Technologies, Inc. and EFL Tech B.V. (“Subscription Agreement”) shall be consummated on the date of payment of $250,000. As required by the Subscription Agreement, 129,832,877 additional shares shall be issued to EL Flexible Signs or its affiliate(s) in exchange for their $1.37 million equity contribution. These issuances will result in dilution of current equity holders of Oryon Technologies, Inc.; provided, however, that shares issued according to this section or board elections shall be held and issued in accordance with the Debtor(s) bylaws and articles of incorporation.

 

Voting: Class 5 is unimpaired, and therefore, shall not be entitled to vote to accept or reject this Plan. Acceptance of this Plan from holders of Class 5 Claims will not be solicited.

 

article 5

CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS OF THE PLAN

 

5.1

Conditions Precedent to Confirmation of the Plan

 

Confirmation of the Plan is subject, in addition to the requirements provided in § 1129 of the Bankruptcy Code, to satisfaction of the following conditions precedent:

 

a.

A Final Order finding that the Disclosure Statement contains adequate information pursuant to section 1125 of the Bankruptcy Code shall have been entered by the Bankruptcy Court;

 

b.

The Bankruptcy Court shall have entered the Confirmation Order; and

 

c.

All actions, documents, and agreements necessary to implement the Plan shall have been effected or executed.

 

5.2

Vesting of Property of the Estate in the Reorganized Debtor

 

5.2.1.     On the Effective Date of the Plan, the Assets of the Debtors shall vest in the Reorganized Debtors (“Vested Property”).

 

5.2.2     From and after the Effective Date, the Reorganized Debtor may operate the Debtor’s business and may use, acquire, and dispose of property free and clear of any instructions imposed by or under the Bankruptcy Code.

 

5.2.3     The Confirmation Order shall provide the Reorganized Debtor with express authority to convey, transfer, and assign any and all Vested Property and to take all actions necessary to effectuate same.

 

 

 

5.2.4     The Reorganized Debtor shall be responsible for paying any quarterly U.S. Trustee fees that accrue after the Effective Date.

 

5.2.5     After the Effective Date, the affairs of the Reorganized Debtor and all of the assets held or controlled by the Reorganized Debtor shall be managed under the direction of the Reorganized Debtor.

 

5.3

Effect of Non-Occurrence of Confirmation or the Effective Date

 

If the Plan is not confirmed or if the conditions listed in this Article 5 are not satisfied or waived, this Plan shall be null and void in all respects and nothing contained in this Plan or the Disclosure Statement shall (i) constitute a waiver or release of any Claims by or against, or any Equity Interests in, the Debtors’ Estates, (ii) prejudice in any manner the rights of the Debtors or any other Person or (iii) constitute an admission, acknowledgment, offer or undertaking by the Debtors or any other Person.

 

article 6

MEANS FOR IMPLEMENTATION OF THE PLAN

 

6.1

Source of Funds

 

The source of funds to implement the Plan and allow the Reorganized Debtor to satisfy post-Effective Date obligations are (i) the $1.37 million from EL Flexible Signs; (ii) $250,000 from EFL; and (iii) Cash on hand.

 

6.2

Plan B Settlement Agreement – Share Surrender

 

The Plan B Settlement shall be approved and implemented by this Plan and the Confirmation Order. In the event that any holder of shares, warrants or options to be surrendered under the Plan B Settlement shall be unable or unwilling to surrender those requisite stock certificates or other documents within five (5) business days of the Confirmation Date, such shares, warrants and options shall be cancelled.

 

6.3

Default

 

A failure by the Reorganized Debtor to make a payment to a Holder of an Allowed Priority Tax Claim in accordance with the terms of the Plan shall be an event of default under the Plan. If the Reorganized Debtor fails to cure an Event of Default as to such payments within thirty (30) days after service of written notice of default served on the Reorganized Debtor, with a copy to counsel for the Reorganized Debtor, then the Holder of such Allowed Priority Tax Claim may (a) enforce the entire amount of its Allowed Claim, (b) exercise any and all rights and remedies under applicable non-bankruptcy law, and (c) seek such relief as may be appropriate in this Court.

 

  

6.4

Substantive Consolidation

 

The Debtors and their respective Estates shall be substantively consolidated for purposes of voting on, and making Distributions under, this Plan. As a result of the substantive consolidation, (a) all Intercompany Claims (including Intercompany Claims arising from the rejection of any Executory Contract) will either be eliminated or shall remain in place but shall not be entitled to any Distributions under this Plan, (b) any obligation of any of the Debtors and all guarantees thereof executed by any of the Debtors will be deemed to be an obligation of each of the Debtors, and (c) any Claim filed or asserted against any of the Debtors will be deemed a Claim against each of the Debtors. The substantive consolidation contemplated by this section shall not, however, cause any of the Debtors to be liable for any Claim or Equity Interest for which it would not otherwise be liable absent the substantive consolidation under this Plan.

 

On the Effective Date, except as otherwise provided for in this Plan, all Claims based on guaranties of collection, payment, or performance made by any of the Debtors concerning the obligations of another Debtor shall be discharged, released, and without further force or effect. Additionally, Holders of Allowed Claims or Allowed Equity Interests who assert identical Claims against or Equity Interests in multiple Debtors shall be entitled to a single satisfaction of such Claims or Equity Interests.

 

6.5

Establishment of Disputed Claims Reserve

 

On the Effective Date, a Disputed Claims Reserve shall be created and placed into an escrow account. The Disputed Claims Reserve shall be funded by funds from EL Flexible Signs in the amount of the Disputed Claims as estimated prior to confirmation, to be funded from the $1.37 million equity contribution. The final amount of the Disputed Claims Reserve will be determined prior to confirmation, but it will be sufficient to pay all Disputed Claims in full in their estimated amount as determined by the Bankruptcy Court prior to confirmation of the Plan. The only remaining Disputed Claim is that of Andrews Kurth in the amount of $106,488.43, to which the Debtors plan to object to based upon grounds related to the services provided. Notwithstanding anything herein to the contrary, if any portion of a claim is a Disputed Claim, no payment or distribution provided hereunder shall be made on account of such Claim unless and until such Disputed Claim becomes an Allowed Claim. Any disputed claim, once allowed, shall bear interest from the Petition Date to the date of payment at the Federal Judgment Rate set forth at http://www.txnd.uscourts.gov/publications/pjrate.html.

 

article 7

PROVISIONS FOR MANAGEMENT

 

7.1

Corporate Authority

 

All actions and transactions contemplated under the Plan shall be authorized upon confirmation of the Plan. The Confirmation Order shall include provisions directing the Debtors to execute such documents necessary to effectuate the Plan, which documents shall be binding on the Debtors, the Estates, the Debtors’ creditors and all Holders of Claims and Equity Interests.

 

7.2

Professional Fees

 

All Allowed Professional Fee Claims shall be paid in accordance with Article 4.1 of this Plan.

 

  

7.3

Transfer of Powers

 

7.3.1 Directors and Officers

 

Effective as of the Effective Date, the authority, power and incumbency of the Persons then acting as officers and directors of the Debtors shall be terminated and such officers and directors shall be deemed to have resigned, without further action by the Debtors. The Plan will be administered and actions will be taken in the name of the Reorganized Debtor through the New Board.

 

7.3.2 Debtors’ Professionals

 

Upon the Effective Date, the Debtors’ Professionals and agents shall be released from any further duties and responsibilities in the Bankruptcy Cases and under the Bankruptcy Code, except with respect to any: (i) obligations arising under confidentiality agreements, joint interest agreements, and protective orders entered during the Bankruptcy Cases, which shall remain in full force and effect according to their terms; (ii) applications for and/or objections to their Fee Claims; and (iii) motions or other actions seeking enforcement or implementation of the provisions of this Plan or the Confirmation Order. The Professionals retained by the Debtors shall not be entitled to compensation and reimbursement of expenses for services rendered in that capacity after the Effective Date, except for services rendered in connection with fee applications pending on the Effective Date or filed after the Effective Date.

 

article 8

CERTIFICATES OF INCORPORATION AND BY-LAWS

OF THE DEBTORS/RESTRICTION ON TRANSFER OF SHARES

 

8.1

Amendments to Certificates of Incorporation and By-Laws

 

The Confirmation Order shall provide authorization pursuant to applicable corporate law for the filing of amended governing documents to provide that the outstanding equity of the Debtors shall continue as it existed prior to the Petition Date and prohibiting distributions to outstanding equity until Classes 1 through 4 are paid in full under the terms of this Plan; and any changes as necessary to effectuate other provisions of the Plan and § 1123(a)(6) of the Bankruptcy Code.

 

8.2

Offering

 

It is anticipated that the Reorganized Debtor shall be a publicly traded entity.

 

article 9

PROVISIONS GOVERNING DISTRIBUTIONS

 

9.1

Distribution Record Date

 

As of the close of business on the Distribution Record Date, the Claims Register as maintained by the Court and Debtors shall be deemed closed. The Reorganized Debtor shall have no obligation to recognize any transfer of Claims or Interests occurring on or after the Distribution Record Date. The Reorganized Debtor shall be required to recognize and deal for all purposes hereunder only with those record Holders identified on the Claims Register as of the close of business on the Distribution Record Date, to the extent applicable.

 

  

9.2

Distributions To Be Pro Rata Within Class

 

All Distributions constituting of a partial payment to a Class of Allowed Claims shall be made on a Pro Rata Share to the holders of Allowed Claims in such Class.

 

9.3

Withholding and Reporting Requirements

 

In connection with the Distributions made under the Plan, the Reorganized Debtor shall comply with all withholding and reporting requirements imposed by any federal, state or local taxing authority. As a condition to the Holder of an Allowed Claim or Allowed Interest (if applicable) receiving any Distribution under this Plan, the Reorganized Debtor may require that the Holder provide such Holder’s taxpayer identification number and such other information and certification as the Reorganized Debtor may deem necessary to comply with applicable tax reporting and withholding laws. The failure of a Holder of a Claim or Interest to respond timely to a request by the Reorganized Debtor for tax withholding or reporting information will result in the Holder being treated in the same manner as the Holder of a Claim or Interest for which a Distribution is undeliverable or unclaimed, as described in Sections 9.5 and 9.6 of this Plan.

 

9.4

Delivery of Distributions

 

Subject to Bankruptcy Rule 9010 and the provisions of the Plan, Distributions to Holders of Allowed Claims shall be made at the address of each of such Holder as set forth in the Schedules filed with the Bankruptcy Court, unless superseded by the address set forth on such Holder’s Proof of Claim, or in a written notice delivered to the Reorganized Debtor and its counsel, to the extent that such notice is provided at least ten (10) Business Days before the applicable Distribution Date, by such Holder (or at the last known address of such Holder if no Proof of Claim is filed and there is no address in the Schedules, and the Reorganized Debtor has not been notified in writing of the address). If any Distribution to any Holder is returned as undeliverable, the Reorganized Debtor may, but shall not be required to, use reasonable efforts to determine the current address of such Holder, but no subsequent Distribution to any such Holder shall be made unless and until the Reorganized Debtor has determined the then current address of such Holder, at which time such Distribution shall be made to such Holder without interest. The Reorganized Debtor shall retain all amounts in respect of any undeliverable Distributions made by the Reorganized Debtor until such Distributions are claimed, subject to Section 9.6 herein.

 

9.5

Unclaimed Distributions

 

If any Distribution is not claimed, or remains undeliverable under Section 9.5 of the Plan, by the Unclaimed Distribution Date applicable to such Distribution, such Distribution shall be deemed unclaimed property under § 347(b) of the Bankruptcy Code, and such unclaimed Distribution(s) shall be available for Distribution to other Holders of Allowed Claims as part of the next Distribution, in accordance with the terms of this Plan. The Holder of any Claim or Interest for which a Distribution is deemed unclaimed property hereunder shall not be entitled to receive any future Distributions and shall be deemed to have relinquished all rights to any future Distributions and all such future Distributions shall be available for Distribution to other Holders of Allowed Claims under this Plan.

 

  

9.6

Time Bar to Cash Payments

 

Checks issued by the Reorganized Debtor in respect of Allowed Claims shall be null and void if not negotiated within ninety (90) days after the date of issuance thereof. Requests for reissuance of any check shall be made in writing directly to the Reorganized Debtor by the holder of the Allowed Claim with respect to which or to whom such check originally was issued. All such requests shall be made promptly and in time for the check to be reissued and cashed before the Unclaimed Distribution Date established by section 2.1 of this Plan. Distributions in respect of voided checks shall be treated as unclaimed distributions under this Plan.

 

9.7

Establishment and Administration of Disputed Claims Reserve

 

At the time of the Effective Date, a Disputed Claims Reserve shall be established, which shall be administered by the Reorganized Debtor. A Distribution on account of an Allowed Claim that is held back by the Reorganized Debtor by agreement or to determine the extent of any mitigation shall be reserved for and paid in the same manner as a Disputed Claim. After a Disputed Claim is resolved, the Reorganized Debtor shall no longer account for such Claim in the Disputed Claims Reserve and the amount attributable to the Disallowed portion of the Disputed Claim, if any, shall be deemed to be Cash available for Pro Rata Distribution to Beneficiaries, in accordance with this Plan.

 

9.8

De Minimis Distributions

 

The Reorganized Debtor shall have no obligation to make a Distribution if the amount to be distributed to a Holder of an Allowed Claim or Allowed interest would be less than $50.00 in the aggregate.

 

9.9

No Distributions Pending Allowance

 

Notwithstanding any other provision of the Plan, no payment or Distribution shall be made with respect to (a) any Claim to the extent it is a Disputed Claim unless and until such Disputed Claim becomes an Allowed Claim, (b) Claimants who are defendants in Avoidance Actions and other parties subject to the application of § 502(d) of the Bankruptcy Code, and (c) reclamation claims pursuant to § 546(c)(2)(A) of the Bankruptcy Code which are not Allowed Claims.

 

article 10

PROCEDURES FOR TREATING DISPUTED CLAIMS

 

10.1

Objections

 

The Debtors’ rights to object to, oppose, and defend against all Claims on any basis are fully preserved as provided in Article 11 herein.

 

  

10.2

Estimation of Claims

 

The Debtors may request that the Bankruptcy Court estimate any contingent, unliquidated, or Disputed Claim, to the extent permitted by the Bankruptcy Code and Bankruptcy Rules, regardless of whether such Debtor previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain exclusive jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including, without limitation, during the pendency of any appeal relating to such objection. In the event that the Bankruptcy Court estimates any contingent, unliquidated, or Disputed Claim, the amount so estimated may constitute (i) the Allowed amount of such Claim; (ii) a maximum limitation on such Claim; (iii) the amount to be reserved in respect of such Claim in the Disputed Claims Reserve, or (iv) the amount of such Claim for voting purposes as determined by the Bankruptcy Court, in accordance with the Bankruptcy Code and Bankruptcy Rules. All of the aforementioned objection, estimation, and resolution procedures shall be cumulative and not exclusive of one another. Claims may be estimated and subsequently disallowed, reduced, compromised, settled, withdrawn, or resolved by any mechanism approved by the Bankruptcy Court.

 

article 11

PROCEDURES FOR RESOLVING AND TREATINGDISPUTED CLAIMS

 

11.1

Claim Objection Deadline

 

Except for any deadlines established for objecting to Administrative Claims (including Fee Claims) under Article 4.1.2 of the Plan, as soon as practicable, but in no event later than one year after the Effective Date (the “Claim Objection Deadline”), unless extended by order of the Bankruptcy Court on motion, objections to Claims shall be filed with the Bankruptcy Court and served upon holders of each of the Claims to which objections are made.

 

11.2

Prosecution of Objections

 

On and after the Effective Date, except as the Bankruptcy Court may otherwise order, the filing, litigation, settlement, or withdrawal of all objections to claims may be made by the Reorganized Debtor.

 

11.3

Distributions Upon Allowance of Contested Claims Entitled to Payment in Full in One Payment

 

The Holder of a Claim entitled to payment in full on one specific payment date, which Claim is a Disputed Claim on such payment date, but which Claim subsequently becomes an Allowed Claim, shall receive payment of its Allowed Claim within thirty (30) Business Days following the date on which such Claim becomes a Allowed Claim pursuant to a Final Order.

 

11.4

Distributions Upon Allowance of Disputed Claims Entitled to Payment in Full in Installment Payments

 

The Holder of a Claim entitled to payment in installments, which Claim is a Disputed Claim on the initial or any later date the installment would otherwise be made, but which Claim subsequently becomes an Allowed Claim, shall receive the amount of any missed installments on the first date payments to other Holders of Claims in the same Class are scheduled to be made that arises after the date on which such Claim becomes an Allowed Claim by Final Order. If such Claim does not become an Allowed Claim until after all the other Claims in the Class have received their total Distributions as authorized under the Plan, then the holder thereof shall receive payment of its Allowed Claim within ten (10) Business Days following the date on which such Claim becomes an Allowed Claim pursuant to a Final Order.

 

  

article 12

PROVISIONS GOVERNING EXECUTORY CONTRACTS AND UNEXPIRED

LEASES; REJECTION CLAIMS BAR DATE

 

12.1

Executory Contracts and Unexpired Leases

 

The Plan constitutes a motion by the Debtors to assume, as of the Confirmation Date, all Executory Contracts, which were not rejected prior to the Effective Date and/or that are not assumed herein. All insurance policies and indemnity agreements in which the Debtors or the Debtors’ property are insured and/or indemnified against loss (whether for potential liability or the costs of defense), which were not assigned are hereby assumed and assigned to the Reorganized Debtor.

 

12.2

Bar to Rejection Damages

 

If the rejection of an Executory Contract results in damages to the other party or parties to such Executory Contract, a Claim for such damages, if not heretofore evidenced by a filed Proof of Claim, shall be forever barred and shall not be enforceable against the Debtors, the Estates, their respective properties or their agents, successors or assigns, unless a Proof of Claim is filed with the Bankruptcy Court and served upon the Debtors or Reorganized Debtor (as applicable) and their counsel on or before thirty (30) days after the Confirmation Date or such later date as may be ordered by the Bankruptcy Court with respect to such Claim.

 

article 13

RETENTION OF JURISDICTION

 

13.1

Scope of Jurisdiction

 

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, and to the extent permitted by applicable law, pursuant to §§ 1334 and 157 of title 28 of the United States Code, the Bankruptcy Court shall retain and have jurisdiction over all matters arising in, arising under and related to the Bankruptcy Cases or the Plan after Confirmation including, without limitation, jurisdiction to:

 

a.

hear and determine pending applications for the assumption or rejection of Executory Contracts and the allowance of Claims resulting therefrom;

 

b.

hear and determine any and all adversary proceedings, applications and contested matters, including any remands of appeals;

 

c.

ensure that Distributions to Holders of Allowed Claims are accomplished as provided herein;

 

d.

hear and determine any timely objections to or applications concerning Claims or the allowance, classification, priority, estimation or payment of any Claim;

 

e.

enter and implement such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, modified, reversed or vacated;

 

f.

enter and implement such orders as may be necessary or appropriate to execute, interpret, implement, consummate or enforce the Plan and the transactions contemplated thereunder;

 

  

g.

consider any modification of the Plan pursuant to § 1127 of the Bankruptcy Code, to cure any defect or omission or to reconcile any inconsistency in any order of the Bankruptcy Court, including, without limitation, the Confirmation Order;

 

h.

hear and determine all Fee Applications and Fee Claims;

 

i.

hear and determine disputes arising in connection with the execution, interpretation, implementation, consummation or enforcement of the Plan;

 

j.

enter and implement orders or take such other actions as may be necessary or appropriate to restrain interference by any entity with the consummation or implementation of the Plan, including, without limitation, to issue, administer and enforce injunctions provided for in the Plan and the Confirmation Order;

 

k.

recover all assets of the Debtors and property of the Estates, wherever located;

 

l.

hear and determine matters concerning state, local and federal taxes in accordance with §§ 346, 505 and 1146 of the Bankruptcy Code;

 

m.

hear and determine any other matter not inconsistent with the Bankruptcy Code and title 28 of the United States Code that may arise in connection with or related to the Plan;

 

n.

hear and determine all Causes of Action, including, without limitation, M. Richard Marcus v. Oryon Technologies, Inc., Oryon Technologies, LLC, Thomas P. Schaeffer, Larry L. Sears, Richard K. Hoesterey, Clifton Kwang-Fu Shen, EFL Tech B.V., and EFL Holdings Tech, B.V., Adv. No. 14-03087 (“Removed Action”).

 

o.

hear and determine all actions to enforce the releases, exculpation and injunctive provisions in the Plan;

 

p.

to determine all matters and disputes arising out of, or relating to, the conduct of the Reorganized Debtor and/or the administration and operation of the Reorganized Debtor; and

 

q.

enter a Final Decree closing the Chapter 11 cases.

 

13.2

Failure of the Bankruptcy Court to Exercise Jurisdiction

 

If the Bankruptcy Court abstains from exercising, or declines to exercise, jurisdiction or is otherwise without jurisdiction over any matter arising in, arising under or related to the Chapter 11 case, including the matters set forth in Section 13.1 of the Plan, this Article 13 shall have no effect upon and shall not control, prohibit or limit the exercise of jurisdiction by any other court having jurisdiction with respect to such matter.

 

  

article 14

EFFECT OF CONFIRMATION OF THE PLAN

 

14.1

Discharge of Debtors

 

The rights afforded in the Plan and the treatment of all Claims and Interests shall be in exchange for and in complete satisfaction, discharge and release of all Claims of any nature whatsoever against the Debtors and any of their property, and except, as otherwise provided herein, upon the Effective Date, the Debtors shall be deemed discharged and released to the extent permitted by § 1141 of the Bankruptcy Code from any and all Claims, including but not limited to demands and liabilities that arose before the Effective Date, and all debts of the kind specified in §§ 502(g), 502(h), or 502(i) of the Bankruptcy Code, whether or not (a) a Proof of Claim based upon such debt is filed or deemed filed under § 501 of the Bankruptcy Code; (b) a Claim based upon such debt is allowed under § 502 of the Bankruptcy Code; or (c) the holder of a Claim based upon such debt has accepted the Plan. Except as provided herein, the Confirmation Order shall be a judicial determination of discharge of all liabilities of the Debtors. As provided in § 524 of the Bankruptcy Code, such discharge shall void any judgment against the Debtors at any time obtained to the extent it relates to a claim discharged, and operates as an injunction against the prosecution of any action against the Debtors, or their property, to the extent it relates to a Claim discharged.

 

14.2

Binding Effect.

 

On and after the Effective Date, the provisions of this Plan shall bind all present and former Holders of Claims against, or Equity Interests in, the Debtors and such Holders’ successors and assigns, whether the Claim or Interest of such Holder is Impaired under the Plan and whether such Holder has filed a Proof of Claim or Proof of Interest or has accepted the Plan. The Confirmation Order shall survive and remain effective after entry of any order converting the Bankruptcy Cases to cases under chapter 7 of the Bankruptcy Code, and the terms and provisions of this Plan shall continue to be effective in this or any superseding case under the Bankruptcy Code.

 

14.3

Certain Activities Enjoined

 

Except as expressly provided herein, at all times on and after the Effective Date, all Persons who have been, are, or may be holders of Claims against or Equity Interests in the Debtors arising prior to the Effective Date, shall be enjoined from taking any of the following actions against or affecting the Debtors, their estate, or their property, with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan):

 

(1)      commencing, conducting or continuing in any manner, directly or indirectly any suit, action, or other proceeding of any kind against the Debtors, their estate, or their property, (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date which shall be deemed to be withdrawn or dismissed with prejudice);

 

(2)       enforcing, levying, attaching, collecting, or otherwise recovering by any manner or means whether directly or indirectly any judgment, award, decree, or order against the Debtors, their estate, or their property;

 

(3)       creating, perfecting, or otherwise enforcing in any manner, directly or indirectly, any Lien against the Debtors, their estate, or their property, except as otherwise provided in the Plan or the Mediation Settlement Agreement;

 

(4)       asserting any right of subrogation, or recoupment of any kind, directly or indirectly against any obligation due the Debtors, their estate, or their property; and

 

(5)       proceeding in any manner in any place whatsoever that does not conform to or comply with the provisions of the Plan.

 

  

article 15

SETTLEMENT, RELEASE, EXCULPATION AND INJUNCTIONS

 

15.1

Approval of the Plan B Settlement Agreement and the Mediation Settlement Agreement

 

The Debtors seek approval of the Plan B Settlement Agreement and the Mediation Settlement Agreement, including the releases of the parties thereto and their respective officers and directors as provided thereunder.

 

15.2

Exculpation

 

From and after the Effective Date, the Exculpated Parties shall neither have nor incur any liability to any Person (including, without limitation, any Holder of a Claim or Equity Interest) for any action taken, suffered or omitted to be taken in connection with or related to the Debtors, the Estate, or the Bankruptcy Cases, including, but not limited to, formulating, preparing, disseminating, implementing, confirming, consummating or administering (a) the Plan (including soliciting acceptances or rejections thereof), (b) the Disclosure Statement or any contract, instrument, release, or other agreement or document entered into or any action taken or omitted to be taken in connection with the Plan, and/or (c) any Distributions made pursuant to the Plan, except, in all cases, for acts or omissions constituting willful misconduct or gross negligence as determined by Final Order of a court of competent jurisdiction, and in all respects such parties shall be entitled to rely upon the advice of Professionals with respect to their duties and responsibilities under the Plan, and such reliance shall form an absolute defense to any Claim, cause of action or liability. Without limiting the generality of the foregoing, the Exculpated Parties shall be entitled to and granted the protections of § 1125(e) of the Bankruptcy Code, and nothing in the Article 14.4 shall limit the applicability of § 1125(e) of the Bankruptcy Code to any other Person.

 

article 16

MISCELLANEOUS PROVISIONS

 

16.1

Setoff and Other Rights

 

In the event that the Debtors have a claim of any nature whatsoever against the holder of a Claim, the Reorganized Debtor may, but is not required to, setoff against the Claim (and any payments or other distributions to be made in respect of such Claim hereunder), subject to the provisions of § 553 of the Bankruptcy Code, except as limited in the Plan or pursuant to the Plan B Settlement Agreement or the Mediation Settlement Agreement. Neither the failure to setoff nor the allowance of any Claim under the Plan shall constitute a waiver or release by the Debtors of any Claim that the Debtors have against the holder of a Claim. No holder of a Claim (who has not asserted by timely filing a Proof of Claim asserting setoff or recoupment) may, on account of a pre-Effective Date Claim against the Debtors, setoff, offset, suspend, freeze, or recoup any amount from funds or other payments that such claimant may owe to the Debtors or the Estates, except as provided by the Plan or pursuant to the Plan B Settlement Agreement or the Mediation Settlement Agreement. The Confirmation Order shall include an injunction prohibiting any such setoff, offset, suspense, freeze, or recoupment.

 

  

16.2

Injunctions

 

The Confirmation Order shall contain such injunctions as may be necessary and helpful to effectuate the Plan. Without limiting the generality of the foregoing, such injunctions shall include an absolute prohibition from collecting Claims in any manner other than as provided for in the Plan.

 

16.3

Lawsuits

 

On the Effective Date, all lawsuits, litigations, administrative actions, or other proceedings, judicial or administrative, in connection with the assertion of a Claim against the Debtor, shall be dismissed, except proofs of claim and/or objections thereto pending in the Bankruptcy Court. All parties to any action shall be enjoined by the Bankruptcy Court in the Confirmation Order from taking any action to impede the immediate and unconditional dismissal of such actions. All lawsuits, litigations, administrative actions, or other proceedings, judicial or administrative, in connection with the assertion(s) of a claim by the Debtors or any entity proceeding in the name of or for the benefit of the Debtor against a person shall remain in place only with respect to the claim(s) asserted by the Debtor or such other entity, and shall become property of the Reorganized Debtor to prosecute, settle, or dismiss, as the Reorganized Debtors sees fit, provided however that any and all lawsuits, litigation, administrative actions or other proceedings that comprise or relate to the Myant Claims, the Marcus Claims or the Removed Action shall be dismissed with prejudice as to all parties thereto on the Effective Date of the Plan.

 

16.4

Payment of Statutory Fees/U.S. Trustee Reports

 

All fees payable pursuant to § 1930 of title 28 of the United States Code shall be paid through the entry of a Final Decree in the applicable Bankruptcy Case. The Reorganized Debtor shall be responsible for paying any quarterly fees under § 1930 that accrue after the Effective Date. The Reorganized Debtor shall also file such quarterly reports for each Debtor that is still required to submit such a report in the applicable quarter to the U.S. Trustee, setting forth all receipts and disbursements of the Reorganized Debtor, as required by its guidelines.

 

16.5

Governing Law

 

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or the law of the jurisdiction of organization of any entity, the internal laws of the State of Texas shall govern the construction and implementation of the Plan and any agreements, documents and instruments executed in connection with the Plan or the Chapter 11 cases, including the documents executed pursuant to the Plan.

 

16.6

Modification of Plan

 

The Debtors may propose modifications of the Plan in writing at any time before the Confirmation Date, provided that (a) the Plan, as modified, meets the requirements of §§ 1122 and 1123 of the Bankruptcy Code and (b) the Debtors shall have complied with § 1125 of the Bankruptcy Code. The Plan may be modified at any time after the Confirmation Date and before substantial consummation by the Debtors, provided that (i) the Plan, as modified, meets the requirements of §§ 1122 and 1123 of the Bankruptcy Code, (ii) the Bankruptcy Court, after notice and a hearing, confirms the Plan as modified, under § 1129 of the Bankruptcy Code and (iii) the circumstances warrant such modifications. A Holder of a Claim that has accepted the Plan shall be deemed to have accepted the Plan as modified if the modification does not materially and adversely change the treatment of the Claim of such Holder.

 

  

16.7

Creditor Defaults

 

An act or omission by a creditor in contravention of a provision within this Plan shall be deemed an event of default under this Plan. Upon an event of default, the Reorganized Debtor seek to hold the defaulting party in contempt of the Confirmation Order. If such creditor is found to be in default under the Plan, such party shall pay the reasonable attorneys’ fees and costs of the Reorganized Debtor in pursuing such matter. Furthermore, upon the finding of such a default by a creditor, the Bankruptcy Court may (a) designate a party to appear, sign and/or accept the documents required under the Plan on behalf of the defaulting party, in accordance with Rule 70 of the Federal Rules of Civil Procedure, (b) may enforce the Plan by order of specific performance, (c) may award judgment against such defaulting creditor in favor of the Reorganized Debtor in an amount, including interest, to compensate the Reorganized Debtor for the damages caused by such default; and (d) make such other order as may be equitable that does not materially alter the terms of the Plan as confirmed.

 

16.8

Controlling Documents

 

To the extent the Plan is inconsistent with the Disclosure Statement, the terms of the Plan shall control. To the extent the Plan is inconsistent with the Confirmation Order, the Confirmation Order shall control.

 

16.9

Integration

 

The Plan Documents, including the Plan B Settlement Agreement, are incorporated and are a part of the Plan as if set forth in full herein.

 

16.10

Severability

 

Should the Bankruptcy Court determine that any provision of the Plan is unenforceable either on its face or as applied to any Claim or Equity Interest or transaction, the Debtors may modify the Plan in accordance with § 15.10 of the Plan so that such provision shall not be applicable to the Holder of any Claim or Equity Interest. Such a determination of unenforceability shall not (a) limit or affect the enforceability and operative effect of any other provision of the Plan, or (b) require the resolicitation of any acceptance or rejection of the Plan.

 

16.11

Notices

 

All notices, requests, and demands to or upon the Debtors to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows:

 

To the Debtors:

 

Patricia Baron Tomasco

Jackson Walker L.L.P.

100 Congress Avenue, Suite 1100

Austin, Texas 78701

(512) 236-2276 (direct line)

(512) 691-4438 (direct fax)

ptomasco@jw.com

 

  

To the U.S. Trustee:

 

Nancy Resnick

Assistant U.S. Trustee

Office of the United States Trustee

1100 Commerce St. Room 976

Dallas, Texas 75242

(214) 767-1075 (telephone)

(214) 767-8971 (fax)

nancy.resnick@usdoj.gov

 

To EFL:

 

Vickie L. Driver

Coffin & Driver, PLLC

7557 Rambler Road, Suite 200

Dallas, Texas 75231

(214) 377-4848

(214) 377-4858 (fax)

vdriver @coffindriverlaw.com

 

	Respectfully submitted,
	JACKSON WALKER L.L.P.
	901 Main Street, Suite 6000
	Dallas, Texas 75201
	(214) 953-6000 – Main Telephone
	(214) 953-5822 – Main Facsimile
	www.jw.com
	By:	/s/ Patricia B. Tomasco
		Patricia B. Tomasco
		State Bar No. 01797600
		(512) 236-2076 – Direct Phone
		(512) 691-4438 – Direct Fax
		Email address:  ptomasco@jw.com
		Bruce J. Ruzinsky
		State Bar No. 17469425
		(713) 752-4204 – Direct Telephone
		(713) 308-4155 – Direct Facsimile
		Email: bruzinsky@jw.com
		Monica S. Blacker
		State Bar No. 00796534
		(214) 953-5824 – Direct Phone
		(214) 661-6647 – Direct Fax
		Email address: mblacker@jw.com

 

  

		Matthew D. Cavenaugh
		State Bar No. 24062656
		(713) 752-4284 – Direct Telephone
		(713) 308-4184 – Direct Facsimile
		Email: mcavenaugh@jw.com
		Jennifer F. Wertz
		State Bar No. 24072822
		(512) 236-2247 – Direct Phone
		(512) 391-2147 – Direct Fax
		Email address: jwertz@jw.com
		COUNSEL FOR DEBTORS
	Vickie L. Driver
	State Bar No, 24026886
	Courtney J. Hull
	State Bar No. 24061297
	Coffin & Driver, PLLC
	7557 Rambler Road, Suite 200
	Dallas, Texas 75231
	(214) 377-4848
	(214) 377-4858 (fax)
	vdriver@coffindriverlaw.com
	chull@coffindriverlaw.com
	COUNSEL FOR EFL TECH, B.V.

 

 

EXHIBIT A

 

See the Settlement Agreement attached as Exhibit 2.3 to this Current Report on Form 8-K.

 

 

EXHIBIT 2.3

 

settlement agreement

 

The parties hereto agree on this 24th day of September, 2014, that the following matters set forth below (the “Matters”) and all other claims and controversies between them of any kind, are hereby settled in accordance with the following terms and conditions, subject only to such approval as may be required by, or reasonably requested in, the court presiding over the matter. The parties (the “Parties”) are:

 

·

Oryon Technologies, Inc., a Nevada corporation (“Oryon Inc.”), Oryon Technologies, LLC, a Texas Limited Liability Company (“Oryon LLC”), Oryon Technologies Licensing, LLC, and Oryon Technologies Development, LLC (each such company also being referred to individually as a “Debtor”, and collectively as the “Debtors”),

 

·

EFL Tech International Group, N.V., a Netherlands Corporation, EFL Holdings B.V., a Netherlands Corporation, EFL Tech B.V., a Netherlands Corporation, EFL Holdings Tech B.V., a Netherlands Corporation, EFL Tech Pty. Ltd., an Australian Corporation, and EFL Holdings Pty. Ltd., an Australian Corporation (collectively, “EFL”),

 

·

M. Richard Marcus, MRM Acquisitions, LLC, (“MRM, LLC”), Oryon Capital, LLC (“OC LLC”) (collectively “Marcus”), and

 

·

Myant Capital Partners, Inc. and Tony Chahine, individually and in all other capacities (collectively “Myant”).

 

The Matters are herein defined as:

 

In re Oryon Technologies, Inc., Case No. 14-32293 (Bankr. N.D. Tex.);

 

In re Oryon Technologies, LLC, Case No. 14-32416 (Bankr. N.D. Tex.);

 

Oryon Technologies Inc., v. M. Richard Marcus, Adversary Proceeding 14-03077 (Bankr. N.D. Tex.);

 

M. Richard Marcus v. Oryon Technologies, Inc., et al., Cause No. DC-14-01252, 193rd Judicial District Court, Dallas County, Texas;

 

M. Richard Marcus v. Oryon Technologies, LLC, Case No. 01-14-0000-4377, in binding arbitration before the American Arbitration Association;

 

M. Richard Marcus v. Oryon Technologies, Inc., no case number yet assigned, in binding arbitration before the American Arbitration Association;

 

 

Oryon Technologies, Inc., et al. Mediation

 

Myant Capital Partners v. EFL Tech B.V., Claim No. 01-14-0001-2139, in binding arbitration before the International Centre for Dispute Resolution.

 

The Parties acknowledge that bona fide disputes and controversies exist between them, both as to liability and the amount thereof, if any, and by reason of such disputes and controversies they desire to compromise and settle all claims and causes of action of any kind whatsoever which the parties have or may have, known or hereafter discovered, arising out of the transaction(s) or occurrence(s) which are the subject of the Matters. It is further expressly understood and agreed that this is a compromise of disputed claims, and nothing contained herein shall be construed as an admission of liability by any Party, all such liability being expressly denied.

 

Each signatory hereby warrants and represents that such person has authority to bind the Party or Parties for whom such person acts, and that the claims, suits, rights, and/or interests which are the subject matter of this litigation are owned by the Party asserting same and have not been assigned, pledged, transferred or sold.

 

This Settlement Agreement is not subject to revocation by any signatory Party hereto. Subject thereto, each settling Party agree to settle and compromise each and every dispute existing between them on the following terms:

 

1.            Settlement Payment. Debtors shall pay to Myant and Marcus $1.7 million as follows:

 

(a)

Cash payment. The Debtors shall cause to be paid on the date of confirmation of the Debtors’ plan of reorganization (the “Confirmation Date”), the sum of $600,000 to the trust account of Bryan Cave, LLP, which sums shall be released in a payment of $300,000to Myant and $300,000 to Marcus or his designee upon the order of confirmation becoming final and nonappealable.

 

(b)

Promissory Note. On the Confirmation Date, the Debtors shall execute and deliver a Promissory Note in favor of Myant and Marcus (or his designees), which shall be joint and several and in the principal amount of $1.1 million (the “Note”), with interest at 6% per annum, due and payable over two years from the Confirmation Date. The Note shall be secured by the intellectual property of the Debtors and all subsidiaries or affiliates (excluding EFL). The Note shall have the following payment terms: on or before 90 days following the execution of the Note, the Debtors shall pay $250,000 each to Myant and Marcus or his designee, which shall be credited against the Note. On the 10th month following the execution of the Note, and every month thereafter, the Debtors shall pay equal payments such that on the 24th month anniversary of the date of execution of the Note, the Note shall be paid in full.

 

 

Oryon Technologies, Inc., et al. Mediation

 

(c)

Security Agreement. The Debtors shall execute a Security Agreement, in the same general form as the Security Agreement previously negotiated and finalized between the Debtor and Akin Gump, in favor of Myant and Marcus, to secure the full payment and performance of the Note.

 

2.            License Agreement. On the Confirmation Date, the Debtors shall grant an exclusive license agreement for the geographic region of Canada to Myant with respect to the Elastolite Patents that are owned by Oryon (the “License Agreement”). The license shall be royalty free for the first six (6) months after execution. Thereafter, a royalty fee of 10% of the cost of the licensed technology multiplied by 1.1, shall be due to the licensor. The license fee shall be paid quarterly, within two weeks after the end of each quarter. The license agreement shall be consistent with reasonably commercial terms, and shall be governed by Canadian law. In the event the Debtors and Myant have a disagreement during the documentation of this License Agreement as to what terms are deemed reasonably commercial terms, such disagreement shall be decided fully and finally by the mediator in this matter, Judge Leif Clark. No royalty shall be payable in the event of a breach of the payment obligations on the Note in paragraph 1 above.

 

3.            In and for consideration given and actually received, Richard Marcus, MRM LLC, and OC LLC shall surrender, transfer and convey all of their stock in Oryon Technologies, Inc., as instructed by the Debtors, consistent with the requirements of federal securities laws.

 

4.            The Parties agree that, upon the execution and delivery of the Note, Security Agreement, License Agreement, and stock conveyance, and the release of the cash payments to Myant and Marcus, as provided in paragraph (1)(a), they shall contemporaneously execute a full, final, and complete release of all Parties from all causes of action, any and all claims, demands, or suits, known or unknown, fixed or contingent, liquidated or unliquidated, whether or not asserted in this litigation, from the beginning of time through the effective date of the executed releases, arising from or related to the events and transactions which are the subject matter of this settlement agreement. This release shall also run to and inure to the benefit of each Party’s attorneys (save and except for, in any event, Andrews Kurth, LLP), agents, employees, insurers, affiliates, officers, directors, shareholders, trustees, partners, heirs, assigns, and legal representatives.

 

5.            The Parties agree to amend the disclosure statement and plan of reorganization filed in the Oryon bankruptcy matters to reflect the terms set forth herein. All Parties agree to support the approval of the amended disclosure statement.

 

6.            The Parties agree to support confirmation of a Plan, which Plan shall be fully consistent with the terms of this settlement agreement. The Parties further agree that they will not purchase claims in the Debtors’ cases, nor will they encourage other claimants to contest confirmation of the Plan.

 

 

Oryon Technologies, Inc., et al. Mediation

 

7.            Upon court approval of this agreement, and upon confirmation of a Plan, and upon the execution and delivery of the Note, Security Agreement, License Agreement, the stock conveyance, and the tender and release of the initial payment as provided in subparagraph (1)(a) of this Settlement Agreement, the Parties agree to present appropriate settlement or dismissal pleadings to all courts and tribunals of all causes of action as listed in this settlement agreement. Prior to the Confirmation Date of the Plan, the Parties agree to abate, continue or postpone litigation of any of the Matters (other than the bankruptcy cases).

 

8.            The Parties agree to enter into a mutual non-disparagement agreement.

 

The Parties contemplate additional documentation, specifically a Promissory Note, Security Agreement, and License Agreement. Accordingly, counsel shall promptly exchange and negotiate drafts of such further documentation on or before September 30, 2014. The Parties and their counsel agree to fully cooperate in the drafting and execution of such additional documents as are reasonably necessary to implement the provisions and spirit of this Settlement Agreement and to obtain court approval, Notwithstanding such additional documents, the parties confirm that this is a written Settlement Agreement as contemplated by Section 154.071 of the Texas Civil Practice and Remedies Code, is a complete, valid and binding contract, is intended to be an enforceable agreement as contemplated by Rule 11, Texas Rules of Civil Procedure and/or any similar provisions of the Federal Rules of Civil Procedure, and may be used as the basis for a motion for judgment, motion for summary judgment, motion to enforce, or a suit on this Settlement Agreement, with each party waiving all rights to a jury trial.

 

Although the Mediator had previously provided a draft of this Settlement Agreement to counsel as a courtesy to facilitate and assist in the final resolution of these disputes, the parties and their counsel have thoroughly reviewed such outline of essential terms and have, where necessary, modified all previous versions to conform this Settlement Agreement to the precise terms of their settlement. All signatories to this Settlement Agreement hereby release the Mediator from any and all responsibility arising from the drafting of this Settlement Agreement, and by signing this Settlement Agreement acknowledge that they have been advised by the Mediator in writing that this Settlement Agreement should be independently reviewed by counsel before executing it.

 

The parties and their counsel expressly agree that the Mediator shall not be called as a witness in the event of any dispute over this Settlement Agreement or otherwise, in accordance with Section 154.073 of the Civil Practice and Remedies Code, and further agree that in the event any attempt is made by any Party to this agreement to call the Mediator as a witness, that Party shall be obligated to a) compensate the Mediator for all of his time involvement (at his then-applicable rate) in any way caused by or relating in any way thereto, and b) reimburse all attorney's fees, expenses and costs incurred by the Mediator in connection therewith.

 

 

Oryon Technologies, Inc., et al. Mediation

 

The Parties represent and warrant that: (i) each has carefully reviewed this Settlement Agreement, (ii) each has consulted with his, her or its attorney(s) concerning this Settlement Agreement, (iii) any questions that each has pertaining to this Settlement Agreement have been answered and fully explained by counsel, (iv) their decision to execute this Settlement Agreement is not based upon any statement or representation, either written or oral, made by any person or entity other than those statements contained in this Settlement Agreement, and specifically is not based on or induced by any statement or representation made by the opposing Party, its counsel or the Mediator, but provided further that the signature of Richard Marcus for MRM LLC andOC LLC and the effectiveness of his agreement is expressly conditioned upon the confirmation of this Agreement by the members of MRM LLC and OC LLC and this Agreement shall not be effective unless the members of MRM LLC and OC LLC ratify and confirm this Agreement; (v) this Settlement Agreement constitutes the entire agreement and understanding between all parties as to settlement and compromise of these disputes and (vi) all prior and contemporaneous agreements, understandings, representations and statements, whether written or oral, are merged herein and superseded hereby. Each signatory Party hereto expressly warrants and represents that no promise or agreement which is not herein expressed has been made to him, her or it, and that in executing the releases contained in this Settlement Agreement and in entering into the covenants contained herein, they are not relying upon any statement or representation made by the Mediator, any of the parties, any representative of a Party or by such Party’s counsel.

 

This Settlement Agreement may be executed in counterparts and by facsimile copies, is made and performable in Dallas County, Texas, and shall be construed in accordance with the laws of the State of Texas.

 

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement as of the date first above written.

 

Oryon Technologies, Inc., Oryon Technologies, LLC, Oryon Technologies Licensing, LLC, Oryon Technologies Development, LLC (“Oryon”),			Jackson Walker, LLP Counsel for Oryon
By:	/s/ Thomas P. Schaeffer		By:	/s/ Monica Blacker
	Thomas P. Schaeffer			Monica Blacker, Partner
	Chief Executive Officer

 

 

 

 

EFL Tech International Group, N.V.   By: /s/ John Kapeleris John Kapeleris, Director   By: /s/ Georgios Hatzimihail Georgios Hatzimihail, Director
EFL Tech B.V.   By: /s/ John Kapeleris John Kapeleris, Director   By: /s/ Georgios Hatzimihail Georgios Hatzimihail Director
EFL Tech Holdings B.V.   By: /s/ John Kapeleris John Kapeleris Director   By: /s/ Georgios Hatzimihail Georgios Hatzimihail Director

 

 

EFL Holdings B.V.   By: /s/ John Kapeleris John Kapeleris Director   By: /s/ Georgios Hatzimihail Georgios Hatzimihail Director
EFL Holdings Pty Ltd.   By: /s/ Alexios Hatzimihail Alexios Hatzimihail Director
EFL Tech Pty Ltd.   By: /s/ Alexios Hatzimihail Alexios Hatzimihail Director
Tony Chahine, Individually (and in all former capacities, current capacities and prior names)   By: /s/ Tony Chahine Tony Chahine
Myant Capital Partners, Inc.   By: /s/ Tony Chahine Tony Chahine, Its Authorized Agent
Richard Marcus, individually   By: /s/ Richard Marcus Richard Marcus
MRM Acquisitions, LLC, and Oryon Capital, LLC   By: /s/ Richard Marcus Richard Marcus Their Authorized Agent

 

 

EXHIBIT 10.1

 

SECURED PROMISSORY NOTE

 

$1,100,000.00

November 7, 2014

 

For value received, the undersigned, Oryon Technologies, Inc. (“Oryon”), a Nevada corporation, and OryonTechnologies, LLC, a Texas limited liability company, (individually, a “Maker” and collectively, “Makers”), as co-makers, hereby jointly and severally promise to pay to the order of Myant Capital Partners, Inc. and Tony Chahine (collectively, the “Myant Payees”) and M. Richard Marcus, MRM Acquisitions, LLC, and Oryon Capital, LLC (collectively, the “Marcus Payees”) in the City of Dallas, Dallas County, Texas (individually, a “Payee” and collectively, the “Payees”), on or before November, 2016 (the “Maturity Date”), the sum of $1,100,000.00 with interest as specified herein.

 

This Promissory Note (this “Note”) is subject to the following additional provisions, terms and conditions:

 

1.          Settlement Agreement; Certain Definitions. This Note is the Promissory Note referenced in that certain Settlement Agreement dated September 24, 2014, by and among Makers and Payees (the “Settlement Agreement”). Terms defined in the Settlement Agreement are used herein as so defined unless otherwise defined herein.

 

2.          Payment Schedule. Makers hereby agree to make an initial payment to the Myant Payees in the amount of $250,000.00 and the Marcus Payees in the amount of $250,000.00 on or before 90 days following the date of the execution of this Note (collectively, the “Initial Note Payment”). The Initial Note Payment shall be made by wire transfer to the bank account identified in paragraph 5 below.

 

3.          Principal. The principal amount of this Note, following the payment of the Initial Note Payment set forth in paragraph two above, shall be paid as set forth herein. Beginning on the tenth (10th) month following the execution of this Note, and on every month thereafter, the Makers shall pay equal payments such that on the twenty-fourth (24th) month anniversary of the date of the execution of this Note, the Note shall be paid in full.

 

To the extent not previously paid, the entire unpaid principal balance hereof plus all accrued but unpaid interest thereon shall be due and payable on the Maturity Date. All principal payments shall be accompanied by accrued interest on the outstanding principal amount of this Note to the date of payment. Makers may at any time and from time to time prepay all or any part of the unpaid principal balance of this Note without premium or penalty. All payments received by Payee shall be applied first to the payment of accrued unpaid interest and thereafter to the payment of principal.

 

 

Anything to the contrary notwithstanding, the “Accelerated Balance of this Note” (as defined below) shall automatically and immediately become due and payable, upon the occurrence of any of the following events: (i) a sale, license or other disposition of all or substantially all of the assets of Oryon or its subsidiaries, as applicable; (ii) a merger, consolidation, recapitalization or other transaction, or series of related transactions, in which any Person who is not an owner of more than fifty percent (50%) of the combined voting power of the capital stock or all interests in Oryon, as applicable, immediately prior to the closing of such transaction becomes the beneficial owner, directly or indirectly, individually or collectively with any other Person acting jointly or as a group, of fifty percent (50%) or more of the combined voting power of the capital stock or all interests in Oryon, as applicable; or (iii) the liquidation, dissolution or winding up of a Maker (collectively, an “Acceleration Event”). For the purpose of this Note, the “Accelerated Balance of this Note” means (i) the entire unpaid principal balance of this Note, together with all accrued but unpaid interest thereon if the conditions set forth in the preceding clause (i) are not met.

 

Makers shall provide prompt written notice to Payees of any event constituting an Acceleration Event no later than five (5) Business Days after the date of the occurrence of an Acceleration Event. For the purpose of this Note, a “Business Day” is any day other than Saturday or Sunday that commercial banks are open for business in Dallas, Texas.

 

4.          Interest.

 

(a)          Makers agree to pay interest in respect of the unpaid principal amount of this Note from the date hereof to maturity at a rate per annum equal to six percent (6%) per annum. Matured unpaid principal and interest shall bear interest from date of maturity until paid at a rate per annum equal to the Maximum Lawful Rate. The term "Maximum Lawful Rate", as used in this Note, means the maximum rate of non-usurious interest, and the term "Maximum Lawful Amount" means the maximum amount of non-usurious interest, permitted with respect to the indebtedness evidenced by this Note from time to time by applicable law after taking into account any and all fees, payments, and other charges that constitute interest under applicable law.

 

(b)          Interest on the principal of this Note shall accrue from and including the date hereof to but excluding the date of any repayment thereof and shall be payable (i) on each date that a payment of principal is due under Section 3 of this Note; (ii) on the outstanding unpaid principal balance at the maturity of this Note; and (iii) after maturity on demand.

 

5.          Payments in General. The Initial Note Payment shall be paid consistent with the provisions of Article 2 by Makers. All other payments under this Note shall be made to Payee not later than 3:00 p.m. (central time) on the date when due and shall be made in lawful money of the United States of America in immediately available funds. Unless otherwise specified in writing by Myant Capital Partners, all payments under this Note shall be made by wire transfer to the Payees to the bank account held on the name of Myant Capital Partners, Inc. at The Bank of Nova Scotia. The Payees shall allocate the distribution of the payments among themselves. Whenever any payment to be made under this Note shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable during such extension.

 

6.          Security Agreement. This Note is secured pursuant to a Intellectual Property Security Agreement of even date by Makers (the “Security Agreement’).

 

7.          Events of Default. The occurrence of any of the following events shall constitute an “Event of Default” under this Note:

 

 

 

(a)          Makers shall fail to pay any principal of or interest on this Note when and as the same shall become due and payable, whether on the date of this Note, an installment date, at the Maturity Date, by acceleration hereof or otherwise, and with respect to payments other than the Initial Note Payment (which shall have no cure period) such default shall continue unremedied for five (5) consecutive Business Days after receipt by Makers of written notice of such default;

 

(b)          A Maker’s breach of any representation, warranty or covenant under this Note (other than the failure to pay any principal or interest on this Note when and as the same shall become due and payable), the Settlement Agreement or the Security Agreement and such breach shall continue unremedied for five (5) consecutive Business Days after receipt by such Maker of written notice of such default;

 

(c)          Upon the occurrence of any event of default under any other loan or security agreement between any lender and a Maker; or

 

(d)          A Maker:

 

(i)          shall file for relief under any bankruptcy, insolvency or similar law or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it;

 

(ii)         shall be the subject of an involuntary petition under any such law and such involuntary petition is not stayed or dismissed within sixty (60) days after the date thereof;

 

(iii)        shall apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property;

 

(iv)        shall make a general assignment for the benefit of any of its creditors;

 

(v)         shall be dissolved or liquidated;

 

(vi)        shall assign, transfer, sell or hypothecate any property serving as security for this Note;

 

(vii)       shall be subject to a proceeding or case, without the application or consent of a Maker, in any court of competent jurisdiction, seeking (a) its reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its debts, (b) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of such Maker or of all or any substantial part of its property or assets, or (c) similar relief in respect of such maker under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts, and such proceeding or case shall continue without being dismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue without being stayed and in effect for a period of sixty (60) or more days, or an order for relief against such Maker shall be entered in an involuntary case under the Federal Bankruptcy Code;

 

 

 

(viii)      admit in writing its inability to pay its debts as such debts become due, or Payee shall, in good faith, believe that any Maker is generally unable to pay its debts as such debts become due (and written notice thereof is provided to Makers); or

 

(ix)         shall take any action for the purpose of affecting any of the foregoing.

 

Makers shall provide prompt written notice to Payee of any event constituting an Event of Default (or, that, but for the passage of time, would constitute an Event of Default) under Section 7(c), and in no event later than three (3) Business Days after the date of the occurrence of any of the foregoing.

 

8.          Remedies. At any time following an Event of Default under Section 7(a), Section 7(b) or Section 7(c), Payees may declare the entire unpaid principal balance of this Note, together with all accrued but unpaid interest thereon, immediately due and payable, and may proceed to enforce payment of the same and to exercise any and all of the rights and remedies afforded herein as well as all other rights and remedies possessed by Payee by law or otherwise. Upon the occurrence of an Event of Default under Section 7(c), the entire unpaid principal balance of this Note, together with all accrued but unpaid interest thereon, shall automatically and immediately become due and payable, and thereafter Payee may proceed to enforce payment of the same as the joint and several obligation of Makers and exercise any and all of the rights and remedies afforded herein as well as all other rights and remedies possessed by Payee by law or otherwise.

 

9.          Limitation on Interest. The Parties hereto intend to conform strictly to the applicable usury laws. In no event shall interest contracted for, charged or received hereunder, plus any other charges in connection herewith which constitute interest, exceed the maximum interest permitted by applicable law. The amounts of such interest or other charges previously paid to the Payee in excess of the amounts permitted by applicable law shall be applied by the holder of this Note to reduce the principal of the indebtedness evidenced by this Note, or, at the option of the holder of this Note, be refunded. To the extent permitted by applicable law, determination of the legal maximum amount of interest shall at all times be made by amortizing, pro rating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness, all interest at any time contracted for, charged or received from the undersigned or any Maker (or successor thereto) in connection with the indebtedness evidenced hereby, so that the actual rate of interest on account of such indebtedness is uniform throughout the term hereof.

 

10.         No Waiver by Payee. No failure or delay on the part of a Payee in exercising any right, power or privilege hereunder and no course of dealing between a Maker and a Payee shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

11.         Waivers. Except as otherwise expressly provided for herein, Makers, signers, sureties, guarantors, and endorsers of this Note severally waive notice of acceptance of this Note, notice of extension of credit, demand, presentment, notice of presentment, notice of dishonor, notice of intent to demand or accelerate payment hereof, notice of demand, notice of acceleration, diligence in collecting, grace, notice and protest, and agree to one or more renewals or extensions for any period or periods of time, partial payments and releases or substitutions of security, in whole or in part, with or without notice, before or after maturity.

 

 

 

12.         Amendments, Waivers, Etc. No provision of this Note may be waived, changed, modified or discharged without an agreement in writing signed by the party against whom enforcement of such waiver, change, modification or discharge is sought, and then such waiver, change, modification or discharge shall be effective only in the specific instance and for the specific purpose for which given.

 

13.         Successors and Assigns. All of the covenants, stipulations, promises and agreements in this Note contained by or on behalf of Makers shall bind their successors and assigns, whether so expressed or not; provided, however, that Makers may not, without the prior written consent of all Payees, assign any rights, duties or obligations under this Note. Without the consent of Makers, the Payees may, in its sole discretion, at any time or from time to time while any portion of the indebtedness evidenced hereby remains unpaid, transfer, sell, assign or pledge this Note (or any portion thereof), the Intellectual Property Security Agreement and any of the other documents or agreements executed by Makers to secure this Note.

 

14.         Notices. Any notice, request, demand, claim, or other communication required or permitted hereunder shall be in writing and the address for any such notice, request, claim or other communication or delivery shall be as follows:

 

	If to Makers:	Oryon Technologies, Inc.
		OryonTechnologies, LLC
		4251 Kellway Circle
		Addison, Texas 75001
		Attn: President
	With a copy (that shall not
	constitute notice) to:	Coffin & Driver PLLC
		7557 Rambler Road, Suite 200
		Dallas, Texas 75231
		Attn: Vickie L. Driver
		Fax: (214) 377-4858
		E-mail: vdriver@coffindriverlaw.com
	If to the Myant Payees:	Myant Capital Partners, Inc.
		183 Wellington St. W.
		Suite 2903
		Toronto, Ontatio M5V 0A1
		Attn: Tony Chahine
		Email: tony@myant.ca

 

 

 

	With a copy (that shall not
	constitute notice) to:	Bryan Cave LLP
		Attn:  Keith M. Aurzada
		2200 Ross Ave., Suite 3300
		Dallas, Texas 75201
		Telephone (214) 721-8000
		Facsimile (214) 721-8100
		Email keith.aurzada@bryancave.com
	If to the Marcus Payees:	MRM Acquisitions, LLC
		Oryon Capital, LLC
		M. Richard Marcus
		5330 Alpha Road
		Dallas, Texas 75240-1311
		Attn:  M. Richard Marcus
		Email:  mrmarcus@themarcuscompany.com
	With a copy (that shall not
	constitute notice) to:	Goldfarb PLLC
		Attn:  Jeffrey Goldfarb
		2501 N. Harwood Street, Suite 1801
		Dallas, Texas 75201
		Telephone (214) 583-2233
		Facsimile (214) 583-2234
		Email: jgoldfarb@goldfarbpllc.com

 

Any Party may send any notice, request, demand, claim or other communication hereunder to the intended recipient at the address set forth above by personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail or electronic mail. Each notice or other communication will be treated as effective and as having been given and received (i) if sent by mail, at the earlier of its receipt or three (3) days after such notice or other communication has been deposited in a regularly maintained receptacle for deposit of United States mail; (ii) if sent by facsimile or electronic mail, upon confirmation of facsimile transfer or electronic mail confirmation of transmission; (iii) if delivered personally by hand, upon written confirmation of delivery from the person delivering such notice or other communication; or (iv) if sent by nationally recognized overnight delivery service, upon written confirmation of delivery from such service.

 

15.         Headings. Article, section and paragraph headings are for reference only and do not affect the interpretation or meaning of any provisions of this Note.

 

16.         Severability. If any provision or provisions, or if any portion of any provision or provisions, in this Note is found by a court of law to be in violation of any applicable local, state or Federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all Parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interests of Makers and Payees under the remainder of this Note shall continue to be in full force and effect.

 

 

 

17.         Choice of Law; Jurisdiction; Venue. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS. JURISDICTION FOR ALL MATTERS ARISING OUT OF THIS NOTE SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN DALLAS COUNTY, TEXAS, AND EACH MAKER HEREBY IRREVOCABLY SUBMITS ITSELF TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND AGREES AND CONSENTS NOT TO ASSERT IN ANY PROCEEDING, THAT ANY SUCH PROCESS IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND FURTHER AGREES TO A TRANSFER OF SUCH PROCEEDING TO THE COURTS SITTING IN DALLAS COUNTY, TEXAS.

 

18.         Expenses. Makers, jointly and severally, shall pay (i) all out-of-pocket expenses of Payees, including reasonable fees and disbursements of counsel for Payees, in connection with the enforcement of this Note, any waiver or consent hereunder or any amendment hereof, or any Event of Default or alleged Event of Default hereunder and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by Payees, including fees and disbursements of counsel in connection with such Event of Default and collection and other enforcement proceedings resulting therefrom, fees of auditors and consultants incurred in connection therewith, and investigation expenses incurred by Payees in connection therewith, including any appeals. Any amount to be paid hereunder by Makers to Payees, to the extent not prohibited by applicable law, shall bear interest from the date of expenditure until reimbursed to Payees by Makers at the rate of interest which may be applicable from time to time during the period such funds remain unpaid as provided in this Note.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

EXECUTED as of the date first set forth above.

 

	ORYON TECHNOLOGIES, INC.
	By:
	Name:
	Title:
	ORYONTECHNOLOGIES, LLC
	By:
	Name:
	Title:

 

Signature Page to

Secured Promissory Note

 

 

 

 

EXHIBIT 10.2

 

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This Intellectual Property Security Agreement (together with all amendments, if any, from time to time, this “Agreement”), dated as of November 7, 2014, is made by OryonTechnologies, LLC, (“Oryon”), a Texas limited liability company, and Oryon Technologies, Inc., (“Parent”), a Nevada corporation and their affiliates (including Oryon Technologies Licensing, LLC) (collectively, the “Grantors”, and each a “Grantor”) (but excluding EFL Tech International Group, N.V., a Netherlands Corporation, EFL Tech B.V., a Netherlands Corporation, EFL Tech Pty. Ltd., an Australian Corporation, and EFL Holdings Pty. Ltd., an Australian Corporation (collectively, “EFL”)) in favor of Myant Capital Partners, Inc., M. Richard Marcus, MRM Acquisitions, LLC, and Oryon Capital, LLC (each, a “Secured Party” and collectively, the “Secured Parties”).

 

RECITALS

 

A.           Grantors are makers of a promissory note of even date herewith, payable to the order of the Secured Parties (the “Secured Note”).

 

B.           The Secured Note is secured pursuant to the terms of this Intellectual Property Security Agreement.

 

C.           In order to induce each Secured Party to enter into a Settlement Agreement and accept the Secured Note, Grantors have agreed to enter into this Agreement.

 

STATEMENT OF AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.            Defined Terms. All terms contained in this Agreement, unless the context indicates otherwise, and not defined herein have the meanings provided for by the UCC to the extent the same are used or defined therein. In addition, as used herein, the following terms shall have (unless otherwise provided elsewhere in this Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural form of the terms defined):

 

“Copyright Licenses” means all licenses, contracts or other agreements, whether written or oral, now owned by a Grantor, naming a Grantor as licensee or licensor and providing for the grant of any right to use or sell any works covered by any Copyright or Copyright registration (including, without limitation, all Copyright Licenses set forth in Schedule III hereto) and any receivables derived from the Copyrights.

 

“Copyrights” means all of the following in which a Grantor now holds any interest: all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights, including revisions, derivative works, works-in-progress, or unfinished works throughout the universe in any and all media, in and to all original works of authorship fixed in any tangible medium of expression, used by a Grantor (including, without limitation, all registered copyrights described in Schedule III hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof).

 

 

“Licenses” means any Copyright Licenses, Trademark Licenses, Patent Licenses or other license of rights, entire interests and partial interests now held by a Grantor.

 

“Patent Licenses” means all licenses, contracts, patent rights or other agreements, whether written or oral, now owned by a Grantor, naming a Grantor as licensee or licensor and providing for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses set forth in Schedule I hereto) or otherwise granting rights with respect to any invention on which a Patent is in existence.

 

“Obligations” means the prompt payment by the Grantors, as and when due and payable, of all amounts of principal and interest from time to time owing by them in request of the Secured Note and the due performance and observance by each Grantor of all of its other obligations from time to time existing in respect of the Secured Note.

 

“Other Intellectual Property” means industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general intangibles of like nature, now existing.

 

“Patents” means all of the following in which a Grantor now holds any interest: (a) all domestic and foreign letters patent, design patents, and utility patents now existing (including, without limitation, all domestic and foreign letters patent, design patents, and utility patents described in Schedule I hereto), (b) all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), and (c) all reissues, reexaminations, divisions, continuations, continuations in part, extensions or renewals thereof, and any other applications or patents claiming priority thereof, or applications for claimed inventions reasonably determined to be enabled thereby, filed after the date of this Agreement.

 

“Secured Note” means that certain Secured Note, dated as of the date hereof, made by Grantors payable to the order of the Secured Parties as referenced in the Recitals.

 

“Trademark Licenses” means all licenses, contracts or other agreements, whether written or oral, now owned by a Grantor, naming a Grantor as licensor or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark licenses, contracts or agreements (including, without limitation, all Trademark Licenses described in Schedule II hereto).

 

 

“Trademarks” means all of the following in which a Grantor now holds: (a) all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names, trade styles, design marks, logos and other source or business identifiers and all general intangibles of like nature, now owned or used by a Grantor (including, without limitation, all registered domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, Internet domain names, trade styles, design marks, logos and other source or business identifiers described in Schedule II hereto), (b) all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), and (c) all extensions or renewals thereof, together with the goodwill of the products or services symbolized by such marks.

 

The following terms shall have the respective meanings provided for in the UCC: “Cash Proceeds”, “Noncash Proceeds”, and “Proceeds”.

 

2.            Grant of Security Interest in Intellectual Property Collateral. To secure the prompt and complete payment, performance and observance of all the Obligations, Grantors hereby grant, assign, convey, mortgage, pledge, hypothecate and transfer to each Secured Party a continuing security interest in and Lien upon all of its right, title and interest in, to and under the following, whether owned or consigned by or to, or licensed to, a Grantor (collectively, the “Intellectual Property Collateral” or “Collateral”):

 

(a)          all of its Patents and Patent Licenses to which it is a party, including those referred to on Schedule I hereto;

 

(b)          all of its Trademarks and Trademark Licenses to which it is a party, including those referred to on Schedule II hereto;

 

(c)          all of its Copyrights and Copyright Licenses to which it is a party, including those referred to on Schedule III hereto;

 

(d)          the goodwill of the products or services symbolized by the Trademarks;

 

(e)          all Other Intellectual Property;

 

(f)          all divisionals, reissues, renewals, continuations or extensions, as may be appropriate, of the foregoing; and

 

(g)          all Proceeds of the foregoing, including, without limitation, any authorized claim by a Grantor against third parties for past or present (i) infringement of any Patent or Patent licensed under any Patent License; (ii) infringement or dilution of any Trademark or Trademark licensed under any Trademark License; (iii) injury to the goodwill associated with any Trademark or any Trademark licensed under any Trademark License; (iv) infringement of any Copyright or Copyright licensed under any Copyright License.

 

 

3.            Representations and Warranties. Each Grantor represents and warrants that such Grantor does not have any interest in, or title to, any registered or issued Patent, Trademark or Copyright, or pending applications for registration or issuance of any Patent, Trademark, or Copyright, except as set forth in Schedule I, Schedule II and Schedule III, respectively, hereto. This Agreement is effective to create a valid and continuing Lien on and, upon the filing hereof with the United States Patent and Trademark Office and the United States Copyright Office and the filing of appropriate financing statements pursuant to this Security Agreement, perfected security interests in favor of Secured Parties in all of a Grantor’s Intellectual Property Collateral and such perfected security interests are enforceable as such as against any and all creditors of, and purchasers from, a Grantor. Upon the filing by a Secured Party of this Agreement with the United States Patent and Trademark Office and the United States Copyright Office and the filing of appropriate financing statements pursuant to this Security Agreement, all action necessary to protect and perfect Secured Parties’ Lien on a Grantor’s Intellectual Property Collateral shall have been duly taken.

 

4.            Covenants. Each Grantor covenants and agrees with each Secured Party, for the benefit of Secured Parties, that from and after the date of this Agreement and until this Agreement is terminated pursuant to Section 13(l) hereof:

 

(a)          Except as otherwise provided in Section 4(c), each Grantor shall take all reasonable actions necessary to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of the Patents or Trademarks (now or hereafter existing), including the filing of renewals, Section 8 affidavits of use, Section 15 affidavits of non-contestability, opposition, interference and cancellation proceedings in all jurisdictions where any application or registration for any Patent or Trademark has been filed by a Grantor and such Grantor shall timely pay all fees and expenses associated therewith, including, but not limited to, maintenance fees, delay fees or other fees payable in any jurisdiction to obtain or maintain any rights related to the Intellectual Property Collateral. Grantors shall immediately disclose to Secured Parties any failure by Grantors to maintain all of a Grantor’s rights in and to any Intellectual Property Collateral, including any failure to pay when due any filing, maintenance or fees or expenditures required to be paid in any jurisdiction to maintain a Grantor’s rights to any Intellectual Property Collateral. Grantors acknowledge that a Secured Party may, in its sole discretion, advance any fees payable by Grantors to obtain or maintain any rights with respect to Intellectual Property Collateral and the amount of any such advances shall constitute an Obligation of Grantors payable to the Secured Party on demand and secured by the Intellectual Property Collateral.

 

(b)          Except as otherwise provided in Section 4(c), each Grantor shall notify Secured Party promptly, in writing, if it knows or has reason to know that any application or registration relating to any Intellectual Property Collateral (now or hereafter existing) may become abandoned or dedicated to the public (other than through expiration of the statutory term of Patents and Copyrights), or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or any governmental authority or court of any state or foreign jurisdiction) regarding a Grantor’s ownership of any Intellectual Property Collateral, its right to register the same, or to keep and maintain the same.

 

(c)          Notwithstanding Sections 4(a) and (b), if in the ordinary course of business, Grantors elect to discontinue using or not begin use of any of the Trademarks, the obligations relating to notice of abandonment or dedication to the public of the Trademarks, and the obligations to maintain, pursue, and obtain Trademarks, as set forth in Sections 4(a) and (b), shall not apply. Grantors shall provide twenty (20) days advance notice of their intent to discontinue use or abandon any of the Trademarks. Section 4(c) shall apply only to Trademarks.

 

  

(d)          If a Grantor, either directly or through any agent, employee, licensee or designee, files an application for the registration of any Intellectual Property Collateral with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency of any state or foreign jurisdiction, such Grantor shall give Secured Party written notice of such filed applications within twenty (20) days after such application was made and such Grantor shall execute and deliver a supplement hereto (in form of Exhibit A attached hereto) to evidence Secured Party’s Lien on such Intellectual Property Collateral.

 

(e)          In the event that any of the Intellectual Property Collateral is infringed upon, or misappropriated or diluted by a third party, Grantors shall notify Secured Parties in writing reasonably promptly after a Grantor learns thereof. Grantor, at its sole discretion and with the advice of counsel of its choice, shall promptly take such reasonable and appropriate actions to enforce its rights and protect such Intellectual Property Collateral, whether by action, suit, proceeding or otherwise.

 

5.            Covenants as to the Intellectual Property Collateral. So long as any of the Obligations under the Secured Note remain outstanding or unless each Secured Party shall otherwise consent in writing:

 

(a)          Further Assurances. Subject to the terms and conditions of this Agreement, each Grantor will at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that may be reasonably necessary or appropriate or that a Secured Party may reasonably request in order to (i) perfect and protect the security interest purported to be created hereby; (ii) enable a Secured Party to exercise and enforce its rights and remedies hereunder in respect of the Intellectual Property Collateral; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously each License and, at the request of a Secured Party, each of its Records pertaining to the Intellectual Property Collateral with a legend, in form and substance satisfactory to a Secured Party, indicating that such License or Intellectual Property Collateral is subject to the security interest created hereby, (B) executing and filing (to the extent, if any, that Grantor’s signature is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, as may be necessary or desirable or that a Secured Party may request in order to perfect and preserve the security interest purported to be created hereby, (C) furnishing to a Secured Party from time to time statements and schedules further identifying and describing the Intellectual Property Collateral and such other reports in connection with the Collateral as a Secured Party may reasonably request, all in reasonable detail, (D) if any Intellectual Property Collateral shall be in the possession of a third party, notifying such Person of a Secured Party security interest created hereby and obtaining a written acknowledgment from such Person that such Person holds possession of the Collateral for the benefit of a Secured Party, which such written acknowledgement shall be in form and substance satisfactory to a Secured Party, (E) if required by Section 7 herein, executing and delivering an assignment for security relating to the Intellectual Property Collateral, and (F) taking all actions required by applicable law or by other law as applicable in any foreign jurisdiction.

 

  

(b)          Maintenance of Intellectual Property Collateral. Grantors shall not, without the express prior written consent of a Secured Party, sell, encumber, pledge, hypothecate, dispose of or grant any other security interest in the Intellectual Property Collateral, regardless of whether same is allegedly or expressly inferior to the security interest granted hereby. Grantors shall pay, at the cost and expense of Grantors, prior to delinquency, any tax, charge, lien or assessment against the Intellectual Property Collateral. Subject to Sections 4(c) and 4(d) herein, Grantors shall take all actions necessary or reasonable to maintain the value of all Intellectual Property Collateral, including, but not limited to, the payment of all fees and expenses required to be paid to maintain, renew, file, document or otherwise maintain in effect all Patents, Trademarks, Copyrights and other Intellectual Property Collateral in all jurisdictions where such Intellectual Property Collateral has been filed or where any patent applications have been made or filed. Grantors shall perform all covenants and obligations of Grantors under the Intellectual Property Security Agreement. Any licenses of the Intellectual Property Collateral shall be on commercially reasonable terms.

 

(c)          Conduct of Business. Subject to the terms and conditions of this Agreement, each Grantor shall: (i) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises, including, but not limited to, all its Patent rights; (ii) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities; (iii) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment , charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and (iv) keep adequate records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied.

 

6.            Additional Provisions Concerning the Collateral.

 

(a)          Each Grantor hereby authorizes Secured Parties to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral. A photocopy or other reproduction of this Agreement or any financing statement covering the Intellectual Property Collateral or any part thereof shall be sufficient as a financing statement or other filing with the U.S. Patent and Trademark Office where permitted by law.

 

(b)          Each Grantor hereby irrevocably appoints Secured Parties as its attorneys-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time in Secured Parties’ discretion, to take any action and to execute any instrument which any Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (i) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys past due and currently due and to become due under or in respect of any Collateral; (ii) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper in connection with clause (i) above; (iii) to file any claims or take any action or institute any proceedings which any Secured Party may deem necessary to enforce the rights of Secured Parties’ with respect to any Collateral; and (iv) to execute assignments, licenses and other documents to enforce the rights of Secured Parties with respect to any Collateral. This power is coupled with an interest and is irrevocable until all of the Obligations are paid in full after the termination of the Secured Note.

 

  

(c)          For the purpose of enabling Secured Parties to exercise rights and remedies hereunder, only at such time as any Secured Party shall be lawfully entitled to exercise such rights and remedies, and subject to the terms and conditions of this Agreement, and for no other purpose, each Grantor hereby grants to each Secured Party, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor) to use, assign, license or sublicense any Intellectual Property Collateral owned by such Grantor, with the exception of the exclusive license granted to Myant Capital Partners, Inc. in Canadian Patents No. 2,276,448, wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof. Upon the payment in full of all of the Obligations after the cancellation or termination of the Secured Note, each Secured Party (subject to Section 13(l) hereof) shall release and reassign to the applicable Grantor (exercisable without payment of royalty or other compensation to such Secured Party) all of Secured Party’s right, title and interest in and to the Intellectual Property Collateral, and the Licenses, all without recourse, representation or warranty whatsoever and at such Grantor’s sole expense. Each Grantor hereby releases Secured Parties from any claims, causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by any Secured Party under the powers of attorney granted herein other than actions taken or omitted to be taken through any Secured Party’s gross negligence or willful misconduct, as determined by a final determination of a court of competent jurisdiction.

 

(d)          If any Grantor fails to perform any agreement or covenant contained herein, Secured Party may itself perform, or cause performance of, such agreement or obligation, in the name of Grantors, or any one of them, or any Secured Party, and the expenses of any Secured Party incurred in connection therewith, including, but not limited to, the amount of any fees or expenses advanced by any Secured Party, in its sole discretion, to maintain any Patent or Trademark rights or filings in any jurisdiction, shall be payable by Grantors pursuant to Section 8 hereof and shall be secured by the Collateral.

 

(e)          The powers conferred on each Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Parties shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with respect to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed; (ii) the exercise by any Secured Party of any of its rights hereunder shall not release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral; and (iii) Secured Parties’ agents shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other Collateral, nor shall any Secured Party be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

 

7.            Remedies Upon Default. If any Default or Event of Default shall have occurred and be continuing:

 

  

(a)          any Secured Party may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the UCC (whether or not the UCC applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into Secured Parties’ names or into the name of their nominee or nominees (to the extent a Secured Party has not theretofore done so) and thereafter receive, for the benefit of any Secured Party, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof; (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of any Secured Party forthwith, assemble all or part of the Collateral as directed by Secured Party and make it available to Secured Party at a place or places to be designated by mutual agreement, and a Secured Party may enter into and occupy during normal business hours any premises owned or leased by the Grantors, or any one of them, where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate Secured Parties’ rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation; and (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Secured Party’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as Secured Party may deem commercially reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as Secured Party may deem commercially reasonable. Secured Party may be the purchaser of all or any part of the Collateral so sold and may purchase Collateral by set-off against the amount of Obligations secured hereby. Each Grantor agrees that, to the extent notice of sale or any other disposition of the Collateral shall be required by law, at least twenty (20) days’ notice to Grantors, or any one of them, of the time and place of any public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute reasonable notification. A Secured Party shall not be obligated to make any sale or other disposition of Collateral regardless of notice of sale having been given. A Secured Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the Secured Parties arising by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Obligations, even if a Secured Party is the purchaser or accepts the first offer received and does not offer the Collateral to more than one offeree, and waives all rights that any Grantor may have to require that all or any part of the Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of the Collateral by Secured Party shall be made without warranty; (ii) a Secured Party may specifically disclaim any warranties of title, possession, quiet enjoyment or the like; and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness of any such sale of the Collateral. Upon any such sale, a Secured Party shall have the right to deliver, assign and transfer to the purchaser the Collateral. Each purchaser at any such sale shall hold the purchased property absolutely free from any claim or right of any nature, including any equity or right of redemption, of a Grantor, and each Grantor specifically waives all rights of redemption, stay or appraisal which such Grantor has or may have hereunder under any rule or law or statute. In addition to the foregoing, (i) upon written notice to any Grantor from a Secured Party, each Grantor shall cease any use of the Intellectual Property Collateral or any trademark, patent or copyright similar thereto for any purpose described in such notice; (ii) a Secured Party may, at any time and from time to time, upon twenty (20) days’ prior notice to any Grantor, license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, subject to any preexisting Licenses, any of the Intellectual Property Collateral, throughout the universe for such term or terms, on such conditions, and in such manner, as Secured Party shall, in its sole discretion, determine; and (iii) Secured Party may, at any time, pursuant to the authority granted in Section 6 hereof (such authority being effective upon the occurrence of a Default or an Event of Default execute and deliver on behalf of the Grantors, or any one of them, one or more instruments of assignment of the Intellectual Property Collateral (or any application or registration thereof), in form suitable for filing, recording or registration in any country.

 

  

(b)          All Cash Proceeds received by a Secured Party in respect of any sale of or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of a Secured Party, be held by a Secured Party as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to Secured Party pursuant to Section 8 hereof) in whole or in part by a Secured Party against, all or any part of the Obligations in such order as the Secured Party shall elect. Any surplus of such cash or Cash Proceeds held by a Secured Party and remaining after payment in full of all of the Obligations after termination of the Secured Note shall be paid over to Grantors or whomsoever shall be contractually and/or lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

 

(c)          In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which Secured Parties are legally entitled, each Grantor shall be liable for the deficiency, together with interest thereon at the rate specified in the Secured Note for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the reasonable costs of collection and the reasonable fees, costs, expenses and other client charges of any attorneys employed by any Secured Party to collect such deficiency.

 

(d)          Each Grantor hereby acknowledges that if a Secured Party complies with any applicable state or federal law requirements in connection with a disposition of the Collateral (including, but not limited to, complying with private placement offering restrictions and requiring investment representatives from purchasers of the Pledged Interests or other securities), such compliance will not adversely affect the commercial reasonableness of any sale or other disposition of the Collateral.

 

(e)          Secured Parties shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement and the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of Secured Party’s rights hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent that the Grantors lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of Secured Party’s rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waive the benefits of all such laws.

 

  

8.            Indemnity and Expenses.

 

(a)          Each Grantor agrees to defend, protect, indemnify and hold harmless each Secured Party (and its partners, officers, directors, employees, attorneys, consultants and agents) from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including, without limitation, reasonable legal fees, costs, expenses and disbursements of a Secured Party’s counsel) to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities resulting solely and directly from a Secured Party’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction.

 

(b)          Each Grantor agrees to pay to Secured Parties upon demand the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for a Secured Party and of any experts (including, without limitation, any collateral trustee which may act as collateral agents of Secured Party), which a Secured Party may incur in connection with (i) the termination of this Agreement; (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral; (iii) the enforcement of any of the rights of Secured Parties hereunder; or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.

 

9.            Security Interest Absolute. All rights of Secured Parties, all Liens and all obligations of Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Secured Note or any other agreement or instrument relating thereto, (b) any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Obligations, or any other amendment, modification or waiver of or consent to any departure from the Secured Note, (c) any exchange or release of, or non-perfection of any Lien on any Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations. All authorizations and agencies contained herein with respect to any of the Collateral are irrevocable and powers coupled with an interest.

 

10.          Reinstatement. This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against a Grantor for liquidation or reorganization, should a Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of a Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

  

11.          Notices. Whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give or serve upon another any such communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be addressed to the party to be notified at the address set forth in this Security Agreement, and given in the manner required by this Security Agreement.

 

12.          Advice of Counsel. Each of the parties represents to each other party hereto that it has discussed this Agreement with its counsel.

 

13.          Miscellaneous.

 

(a)          No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by Grantors and each Secured Party, and no waiver of any provision of this Agreement, and no consent to any departure by a party, or any one of them, therefrom, shall be effective unless it is in writing and signed by the other party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(b)          No failure on the part of Secured Party to exercise, and no delay in exercising, any right hereunder or on the part of Secured Party to exercise, and no delay in exercising, any rights under the Secured Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of each Secured Party provided in the Secured Note are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of each Secured Party under the Secured Note against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights under the Secured Note against such party or against any other Person, including, but not limited to, each Grantor.

 

(c)          Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

(d)          THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.

 

  

(e)          ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF TEXAS, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE AUTHORITY TO GRANT SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

 

(f)          Each Grantor irrevocably consents to the service of process of any of the aforesaid courts in any such action, suit or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail); postage prepaid, to the Grantors at its address provided herein, such service to become effective ten (10) days after such mailing.

 

(g)          Nothing contained herein shall affect the right of Secured Party to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against the Grantors, or any one of them, or any property of any Grantor in any other jurisdiction.

 

(h)          Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

(i)          EACH GRANTOR AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) SECURED PARTY WAIVE ANY RIGHT THEY MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE SECURED NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

 

(j)          All of the covenants, stipulations, promises and agreements in this Agreement contained by or on behalf of Grantors shall bind their successors and assigns, whether so expressed or not; provided, however, that Grantors may not, without the prior written consent of Secured Party, assign any rights, duties or obligations under this Agreement. Without the consent of Grantors, a Secured Party may, in its sole discretion, at any time or from time to time while any portion of the indebtedness evidenced hereby remains unpaid, transfer, sell, assign or pledge this Agreement (or any portion thereof), the Secured Note, and any of the other documents or agreements executed by Grantors to secure the Secured Note.

 

(k)          This Agreement shall create a continuing security interest in each of the Grantor’s Collateral and shall (i) remain in full force and effect until the later of (A) the payment in full of the Obligations and (B) the termination of the Secured Note and (ii) be binding on each Grantor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the UCC and shall inure, together with all rights and remedies of Secured Party hereunder, to the benefit of Secured Party and its successors, transferees and assigns.

 

  

(l)          Upon the satisfaction in full of the Obligations and the payment in full of the Secured Note, (i) this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall revert to Grantors and (ii) each Secured Party will, upon Grantors’ request and at Grantors’ expense, without any representation, warranty or recourse whatsoever, (A) return to Grantors such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to Grantors such documents as Grantors shall reasonably request to evidence such termination.

 

(m)          Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

(n)          This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one in the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be equally effective as delivery of an original executed counterpart.

 

[SIGNATURE PAGE FOLLOWS]

 

  

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

 

	GRANTORS:
	ORYON TECHNOLOGIES, LLC

  

	By:
	Name:
	Title:

  

ORYON TECHNOLOGIES, INC.

  

	By:
	Name:
	Title:

  

ORYON TECHNOLOGIES LICENSING LLC

  

	By:
	Name:
	Title:

  

	SECURED PARTY:
	MYANT CAPITAL PARTNERS, INC.

  

	By:
	Name:
	Title:

  

Signature Page to

Intellectual Property Security Agreement

  

   

	SECURED PARTY:
	TONY CHAHINE

  

	By:
	Name:
	Title:

  

	SECURED PARTY:
	M. RICHARD MARCUS

  

	By:
	Name:
	Title:

  

	SECURED PARTY:
	MRM ACQUISITIONS, LLC

  

	By:
	Name:
	Title:

  

	SECURED PARTY:
	ORYON CAPITAL, LLC

  

	By:
	Name:
	Title:

 

Signature Page to

Intellectual Property Security Agreement

 

  

ACKNOWLEDGEMENT OF GRANTORS

 

STATE OF

§

§

COUNTY OF

§

 

On this _____ day of November, 2014, before me personally appeared                              , proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of Oryon Technologies, Inc., a Nevada corporation, who being by me duly sworn did depose and say that he is an authorized officer of said corporation, the said instrument was signed on behalf of said corporation as authorized by its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation.

 

	Notary Public in and for the State of

 

STATE OF

§

§

COUNTY OF

§

 

On this _____ day of November, 2014, before me personally appeared                                , proved to me on the basis of satisfactory evidence to be the person who executed the foregoing instrument on behalf of Oryon Technologies, LLC, a Texas limited liability company, who being by me duly sworn did depose and say that he is an authorized officer of said limited liability company, the said instrument was signed on behalf of said limited liability company as authorized by its Board of Managers and that he acknowledged said instrument to be the free act and deed of said limited liability company.

 

	Notary Public in and for the State of

 

Acknowledgment of Grantors to

Intellectual Property Security Agreement

  

  

EXHIBIT A

 

SUPPLEMENT TO
INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

This supplement, dated _____________________, 2014, is delivered pursuant to Section 4(b) of that certain Intellectual Property Security Agreement, dated as of July __, 2014 (as from time to time amended, modified or supplemented, the “Agreement”; the terms defined therein and not otherwise defined herein being used as therein defined), made by Oryon Technologies, LLC and Oryon Technologies, Inc. in favor of Myant Capital Partners, Inc., Tony Chahine, M. Richard Marcus, MRM Acquisitions, LLC, and Oryon Capital, LLC. The undersigned hereby agrees that (i) this supplement may be attached to the Agreement; (ii) that it is a Grantor under the Agreement; and (iii) that it will comply with and be subject to, including representations and warranties, all the terms and conditions of the Agreement, including its schedules as supplemented hereby.

 

Schedules I, II and III of the Agreement are hereby supplemented with the information relating to the undersigned set forth as Schedules I, II and III hereto, respectively. All references in the Agreement to such Schedules shall be deemed to refer to such Schedules, as supplemented hereby.

 

 

[NAME OF GRANTOR]

  

	By:
	Name:
	Title:

 

Exhibit A to

Intellectual Property Security Agreement

 

 

Schedule I – Patents and Patent Licenses

 

		Name				Country		patent No.		Application Number
1		Addressable PTF Receptor for Irradiated Images (Biometrics)				US		6936335		10/450,708
2		Addressable PTF Receptor for Irradiated Images (Biometrics)				PCT				PCT/US2001/050573 EPO 2001/987,503.8
3		Alerting System Using Elastomeric EL Lamp Structure				US		6271631		09/482,389
4		Alerting System Using Elastomeric EL Lamp Structure				Taiwan		NI-147212		90100634
5		Deployment of EL Structures on Porous or Fibrous Substrates				US		6551726		09/870,184
6		Elastomeric EL Lamp on Apparel				US		6309764		09/523,434
7		Elastomeric Electroluminescent Lamp		Main Patent		US		5856030		08/774,743
8		Elastomeric Electroluminescent Lamp		Main Patent		South Korea		0307474		1999-7006007
9		Elastomeric Electroluminescent Lamp		Main Patent		Brazil		P099467
10		Elastomeric Electroluminescent Lamp		Main Patent		Australia		727172		57243/98
11		Elastomeric Electroluminescent Lamp		Main Patent		Belgium		0958713		97953511.9
12		Elastomeric Electroluminescent Lamp		Main Patent		France		0958713		97953511.9
13		Elastomeric Electroluminescent Lamp		Main Patent		Great Britain		0958713		97953511.9

 

  

		Name				Country		patent No.		Application Number
14		Elastomeric Electroluminescent Lamp		Main Patent		italy		0958713		97953511.9
15		Elastomeric Electroluminescent Lamp		Main Patent		Netherlands		0958713		97953511.9
16		Elastomeric Electroluminescent Lamp		Main Patent		Canada				2276448
17		Elastomeric Electroluminescent Lamp		Main Patent		Germany		69739899.4		97953511.9
18		Elastomeric Electroluminescent Lamp		Main Patent		Spain		0958713		97953511.9
19		Elastomeric Electroluminescent Lamp		Main Patent		Hong Kong		1023902		00102904.1
20		Elastomeric Electroluminescent Lamp		Main Patent		Mexico		216800		996183
21		Electroluminescent Lamp Membrane Switch (Continuation)				US		7,186,936		11/438,182
22		Electroluminescent Lamp Membrane Switch (Continuation)				EPO				6749406.2
23		Electroluminescent Lamp Membrane Switch (Continuation)				China		200680020154		200680020154
24		Electroluminescent Lamp Membrane Switch (Continuation)				Japan				Patent applicat 2008-515691
25		Electroluminescent Lamp Membrane Switch				US		7,049,536		11/148,216
26		Electroluminescent Lamp Membrane Switch (CIP)				US		58068114.54		11/452,441

 

 

		Name				Country		patent No.		Application Number
27		Electroluminescent Lamp Membrane Switch (CIP)				China				200780026715.2
28		Electroluminescent Lamp Membrane Switch (CIP)				Taiwan				096121099
29		Electroluminescent Lamp Membrane Switch (CIP)				EU				App No. 07835790.2
30		Electroluminescent System in Monolithic Structure				US		5,856,029		08/656,435
31		Electroluminescent System in Monolithic Structure				Spain		97928691.1		97928691.1
32		Electroluminescent System in Monolithic Structure				Great Britain		0906714		97928691.1
33		Electroluminescent System in Monolithic Structure				Germany		69729867.1		97928691.1
34		Electroluminescent System in Monolithic Structure				Hong Kong		1019184		99104302.7
35		Irradiated Images Described by Electrical Contact				US		6091838		09/093,549
36		Irradiated Images Described by Electrical Contact				Singapore		77972		200007177.9
37		Irradiated Images Described by Electrical Contact				Taiwan		NI-169617		88121056
38		Irradiated Images Described by Electrical Contact				Canada				2334620
39		Irradiated Images Described by Electrical Contact				Japan		4508417		2000-553915
40		Irradiated Images Described by Electrical Contact				South Korea		0603917		2000-7013978

 

  

		Name				Country		patent No.		Application Number
41		Irradiated Images Described by Electrical Contact				EPC				99927327.9
42		Membranous EL System in UV-Cured Urethane Envelope				US		6717361		09/974,941
43		Membranous EL System in UV-Cured Urethane Envelope				china		01817197.4		01817197.4
44		Membranous EL System in UV-Cured Urethane Envelope				EU				01988130.9 PCT/US01/42660
45		Membranous EL System in UV-Cured Urethane Envelope				Taiwan		NI-185118		90125110
46		Membranous EL System in UV-Cured Urethane Envelope				Japan				2002-548747 is JP app. no.  PCT/US01/42660
47		Membranous Monolithic EL Structure with Urethane Carrier Patent				US		6696786		09/974,918
48		Membranous Monolithic EL Structure with Urethane Carrier Patent				Japan		4190884		2000-5354006
49		Membranous Monolithic EL Structure with Urethane Carrier Patent				Taiwan		NI-185542		90125106
50		Membranous Monolithic EL Structure with Urethane Carrier Patent				China		01817193.1		01817193.1

 

 

		Name				Country		patent No.		Application Number
51		Method of Construction of Elastomeric EL Lamp				US		6270834		09/173,404
52		Method of Construction of Elastomeric EL Lamp				China		99125456.2		99125456.2
53		Method and Apparatus for Illuminating a Key Pad				US		6824288		10/163,749
54		Method for Constructing EL System in Monoithic Structure				US		5980976		09173104
55		PTF Touch Enabled Image Generator				US		6606399		09/924,436
56		UV-Curable Inks for PTF Laminates (Including Flexible Circuitry)				US				10/476,494
57		UV-Curable Inks for PTF Laminates (Including Flexible Circuitry)				Japan		2003-505946
58		UV-Curable Inks for PTF Laminates (Including Flexible Circuitry)				China		02802649.7		02802649.7
59		Transparent EL Lamp Patent				US		8,106,578		11/638,304
60		Highly Transmissive Electroluminescent Lamp				PCT				PCT/US2007/024820
61		Translucent Layer including Metal/Metal Oxide				US		6,261,633		09/173,521

 

 

		Name				Country		patent No.		Application Number
62		Elastomeric Electroluminescent Lamp				Japan				530275/98
63		Electroluminescent Lamp Graphic Overlay				US				11/148,215
64		Electroluminescent Lamp Membrane Switch				PCT		2006/012801
65		Electroluminescent Lamp Membrane Switch				US		8,110,765 B2		11/452,441
66		Hybrid Electroluminescent Assembly				US		8,727,550		12/402,648
67		Flexible Interconnect Circuitry System				US				14/252,027
68		Electroluminescent Lamp Membrane Switch (CIP)				Hong Kong				Pending

 

Patent Licenses

 

The License Agreement referenced in the Subscription Agreement by and between Oryon Technologies, Inc. and EFL Tech, B.V., and attached thereto as Exhibit G.

License Agreement by and among Oryon Technologies, Inc., Oryon Technologies, LLC, and Oryon Technologies Licensing, LLC and Calmatech B.V., made as of March 28, 2104 (the “Calmatech License”), provided however that Grantors state that the Calmatech License is void, terminated, and not in effect and therefore the Calmatech License will be deemed removed from this schedule if Grantors provide evidence of its termination and voidness, or provide representations and warranties of its termination and voidness.

 

  

Schedule II - Trademarks

 

Serial Number		Reg. Number		Word Mark		Check Status		Live/Dead		Registered Under
85762309		4499030		E Elastolite Personal Lighting System		TSDR		LIVE		OryonTechnologies, LLC
85762301		4499029		Elastolite Personal Lighting System		TSDR		LIVE		OryonTechnologies, LLC
78847064		3327569		Elastolite		TSDR		LIVE		OryonTechnologies, LLC
75894559		2687776		Elastolite		TSDR		LIVE		OryonTechnologies, LLC

 

  

Schedule III – Copyrights and Copyright Licenses

 

None