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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): September 4, 2024
WORKSPORT
LTD.
(Exact name of registrant as specified in its
charter)
Nevada |
|
001-40681 |
|
35-2696895 |
(State
or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
2500
N America Dr
West
Seneca, New York, United States 14224
(Address of principal executive offices) (ZIP Code)
Registrant’s
telephone number, including area code: (888) 554-8789
Not
Applicable
(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)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbols |
|
Name
of each exchange on which registered |
Common |
|
WKSP |
|
The
Nasdaq Stock Market LLC |
Warrants |
|
WKSPW |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
On
September 4, 2024, Worksport Ltd. (the “Company”), through its wholly owned subsidiary, Worksport USA Operations Corporation, a Colorado corporation (the “Borrower”), entered into a credit and security agreement (the “Agreement”) with Loeb Term Solutions LLC, an Illinois limited
liability company (the “Lender”).
Pursuant
to the terms of the Agreement, Lender provided the Borrower with a loan of $1,487,200, evidenced by a promissory note, dated September
4, 2024, by the Borrower for the benefit of Lender (the “Note”).
The
transaction closed on September 4, 2024 at which time the Company received net proceeds of $1,437,997.98.
The
Note stipulates principal interest payments by the Borrower on a weekly basis at an interest rate equal to the lesser of (i)
the prime rate plus 7.00% per annum and (ii) the maximum rate allowed by law.
The
Company and Worksport New York Operations Corporation, a Colorado corporation (the “Sub”) have separately each provided
a guaranty in favor of the Lender, guaranteeing all obligations of the Borrower under the Agreement (“Guaranties”).
The
Company, Borrower, and Sub have each granted the Lender a security interest in substantially all of its assets, excluding the Company’s
real property located at 2500 North America Drive, Town of West Seneca, Erie County, New York, as collateral security for the obligations
under the Agreement pursuant to security agreements entered with each of them (“Security Agreements”). The Lender holds a
first-priority lien on certain Collateral and a second-priority lien on other Collateral, in accordance with an intercreditor agreement
between the Lender and Amerisource Funding, Inc. (“Amerisource”).
The
Agreement contained customary representations, warranties, covenants, and conditions precedent for transactions of this nature.
This
summary does not purport to be complete and is qualified in its entirety by reference to the Agreement, the Note, the Indemnification
Agreement, the Mortgage Access Agreement, the Guaranties and the Securities Agreements which are filed as exhibits to this Current Report
on Form 8-K.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In
connection with the Agreement described in Item 1.01 of this Current Report on Form 8-K, on September 4, 2024, the Borrower issued the
Lender a term promissory note (the “Note”) for a principal amount of up to $1,487,200. The Note bears interest at the lesser
of (i) the prime rate plus 7.00% per annum and (ii) the maximum rate allowed by law. The Note shall be repayable in 155 weekly installments
of principal and interest on each Wednesday commencing on the first Wednesday after the date of the Note, and then the 156th and final
installment due on the 156th Wednesday after the date of the Note (the “Maturity Date”) of all outstanding principal, accrued
interest, fees and all other amounts due hereunder. The weekly payments will first be applied to payment of interest, second to late
charges and other fees, and the balance, if any, will be applied to the payment of principal.
The
Agreement includes provisions for default, granting the Lender the right to demand immediate payment of the amounts under the Note. The
Note is secured by a mortgage on the Company’s Collateral, and subject to the terms and conditions specified in the Agreement and
related security instruments.
This
summary does not purport to be complete and is qualified in its entirety by reference to the Note, which is filed as an exhibit to this
Current Report on Form 8-K.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
No. |
|
Description |
10.1# |
|
Credit and Security Agreement dated September 4, 2024, between Worksport USA Operations Corporation and Loeb Term Solutions LLC. |
|
|
|
10.2# |
|
Term Promissory Note, dated September 4, 2024, by Worksport USA Operations Corporation to the benefit of Loeb Term Solutions LLC. |
|
|
|
10.3# |
|
Guaranty dated September 4, 2024 by Worksport Ltd. |
|
|
|
10.4# |
|
Guaranty dated September 4, 2024 by Worksport New York Operations Limited. |
|
|
|
10.5# |
|
Security Agreement dated September 4, 2024 by Worksport USA Operations Corporation. |
|
|
|
10.6# |
|
Security Agreement dated September 4, 2024 by Worksport Ltd. |
|
|
|
10.7# |
|
Security Agreement dated September 4, 2024 by Worksport New York Operations Limited. |
|
|
|
104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document). |
#Certain
sections, schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) and Item 601(b)(10) of Regulation
S-K. The Company hereby undertakes to furnish copies of such omitted materials supplementally upon request by the Securities and Exchange
Commission.
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.
|
WORKSPORT
LTD. |
|
|
Date:
September 10, 2024 |
By: |
/s/
Steven Rossi |
|
Name: |
Steven
Rossi |
|
Title: |
Chief
Executive Officer
(Principal Executive Officer) |
Exhibit
10.1
CREDIT
AND SECURITY AGREEMENT
This
Credit and Security Agreement (the “Agreement”) is made and entered into as of the day of ___________________, by Worksport
USA Operations Corporation, a Colorado corporation with its principal place of business located at 2500 N. America Dr., West Seneca,
NY 14224 (“Borrower”), in favor of Loeb Term Solutions LLC, an Illinois limited liability company with an address at 8609
W. Bryn Mawr, Suite 208, Chicago, IL 60631 (“Lender”).
Recitals
This
Agreement, including the Schedule to Credit and Security Agreement of even date herewith as may be amended or restated from time to time,
sets forth the terms and conditions of the term loan or equipment line of credit loan (the “Loan”) and the obligations of
Borrower. Borrower is required to execute the Schedule. The Schedule is incorporated into and made an integral part of this Agreement.
Agreement
In
consideration of and as an inducement to Lender making the Loan to Borrower as evidenced by that certain Term Promissory Note of even
date herewith, as may be amended or restated (the “Note”), and to secure the payment and performance of the Note and of any
and all Obligations and liabilities of Borrower to Lender, whether arising in connection with the Loan or any other loans, advances,
purchases, acquisitions, or other extensions of credit made to or on behalf of Borrower or any other person for whom Borrower serves
as surety or Guarantor in favor of Lender, and whether direct or indirect, absolute or contingent, or now or hereafter existing, or due
or to become due (collectively the “Obligations”), the parties hereto agree as follows:
1.
Terms and Conditions. Borrower and any corporate entity that executes a guaranty of the Obligations in favor of Lender (each
a “Guarantor”), agrees to all of the terms and conditions contained in the Note, this Agreement and the Schedule, and in
any attachments thereto, and in any other documents relating to the Loan or incorporated herein by reference (the “Loan Documents”).
2.
Grant of Security Interest. To secure the payment and performance of the Obligations, Borrower hereby grants to Lender a security
interest in all of Borrower’s right, title and interest in and to the Collateral (defined below).
3.
UCC Provisions.
a.
All capitalized terms not defined herein shall have the meaning given to such terms in the Uniform Commercial Code (“UCC”)
as in effect on the date hereof in the Chosen Forum (as defined in the Schedule), except as required by mandatory provisions of law.
b.
Borrower previously authorized and hereby authorizes Lender to file one or more financing statements, and amendments thereto, relating
to all or any part of the Collateral in the Borrower’s state of organization and in any other states or locations selected by Lender.
Lender may describe the Collateral as “all assets” of Borrower or words of similar effect in such financing statements.
4.
Definition of Collateral. The Collateral is all of the Borrower’s now owned or existing or hereafter acquired or arising:
Accounts, Goods, Inventory, Equipment (including without limitation the equipment described on Exhibit A attached to the Schedule), Chattel
Paper, Instruments, Investment Property, specifically identified Commercial Tort Claims, Documents, Deposit Accounts, Letter of Credit
Rights, General Intangibles, Contract Rights, customer lists, furniture and fixtures, books and records and supporting Obligations for
any of the foregoing, and all Proceeds of the foregoing (the “Collateral”). The Collateral also includes all monies on deposit
with Lender.
5.
Representations and Covenants Relating to the Collateral.
a.
Ownership. Borrower is the owner of the Collateral and shall at all times maintain valid title to the Collateral.
b.
Lien Priority. The security interest granted hereby shall at all times be a valid and perfected first priority security interest,
subject only Permitted Encumbrances, if any, set forth in the Schedule, enforceable against Borrower and all third parties securing the
Obligations. Borrower shall not permit any financing statement or other instruments similar in effect covering all or any part of the
Collateral to be filed or recorded, other than with respect to Permitted Encumbrances, without the prior written consent of Lender. Without
limiting the foregoing, Borrower shall not obtain a merchant cash advance loan or any other arrangement wherein Borrower sells or assigns
its accounts or future cash.
c.
Care of Collateral. Borrower, at its own expense, will maintain, keep and preserve the Collateral in the ordinary course of
business in good repair, working order and condition (reasonable wear and tear excepted), will from time to time make or cause to be
made all needed and appropriate repairs, renewals, replacements, additions, betterments and improvements thereto, will not waste or destroy
the Collateral or any part thereof, will not be negligent in the care and use of any Collateral, and will not use any Collateral, in
violation of applicable law.
d.
Disposition of Collateral. Borrower shall not sell, lease, transfer, assign (by operation of law or otherwise) or otherwise
dispose of all or any part of the Collateral without the prior written consent of Lender, except for Inventory, furniture, and fixtures
in the ordinary course of business.
Credit and Security Agreement | Page 1 of 7 |
e.
Principal place of business and Trade Names. Borrower represents, warrants and covenants that: (i) Borrower’s principal
place of business and the books and records relating to the Collateral are located at Borrower’s principal place of business specified
above; (ii) Borrower has not, within the last five (5) years, transacted business under any trade names other than those specified in
the Schedule; and (iii) Borrower will not move its principal place of business or its books and records, or transact business under any
new trade names, without giving Lender thirty (30) days prior written notice thereof or without having taken all action required by Lender
including but not limited to those in Section 5.f. below with respect to any affected Collateral.
f.
Location of Collateral. Borrower shall not permit the equipment or other tangible Collateral to be located at any location
except at the locations specified in a written Landlord Agreement executed by the landlord and Lender unless:
i.
Borrower gives Lender thirty (30) days prior written notice thereof
ii.
Prior to the move, Borrower obtains from the landlord(s) of the premises of the future location(s) an executed lease and provide
a copy to Lender;
iii.
Prior to the move, Borrower obtains from the landlord(s) of the premises of the future location(s) a landlord agreement, in form
satisfactory to Lender, executed by the landlord and Lender;
iv.
Prior to the move, the machinery mover hired by Borrower names Lender as additional insured, loss payee and Lender loss payee on
its insurance policy and provides a copy to Lender;
v.
Borrower has all of the previously installed equipment re-installed;
vi.
Borrower allows Lender to inspect the equipment at Borrower’s expense to confirm that all previously installed equipment as
shown on Exhibit A is re-installed and operating. The reinspection fee will be pulled via ACH; and
vii.
Within ten (10) days of the completion of the move, Borrower notifies Lender of any surplus equipment left from the move and develops
with Lender a plan to sell the surplus.
g.
Vehicles. If Borrower owns any motor vehicles or construction or earth moving equipment (whether or not registered) (collectively
“Vehicles”), Borrower shall comply with the requirements in the Schedule.
6.
Collection of Accounts. After an event of Default Lender shall have the right to notify the Account debtors of the assignment
of the related Accounts to Lender and to direct such Account debtors to make payment of all amounts due or to become due to Borrower
thereunder directly to Lender, and upon such notification and at the expense of Borrower Lender may enforce collection of any such Accounts,
and adjust, settle or compromise the amount or payment thereof. After the notice from Lender to the account debtors, (i) all amounts
and proceeds (in whatever form) received by Borrower in respect of the Accounts shall be received in trust for the benefit of Lender,
shall be segregated from other funds of Borrower and shall be forthwith paid over to Lender in the same form as so received (with any
necessary endorsement), and applied against the Obligations in such order as Lender shall elect in its sole discretion, and (ii) Borrower
shall not adjust, settle or compromise the amount or payment of any Receivable, or release wholly or partly any account debtor, or allow
any credit or discount thereon without the prior written consent of Lender. Borrower hereby appoints any officer or agent of Lender as
Borrower’s true and lawful attorney-in-fact after an event of Default with power to endorse the name of the Borrower upon any checks
or other instruments of payment or Collateral which may come into possession of Lender. This power of attorney shall be irrevocable for
the term of this Agreement and all transactions hereunder.
7.
Further Assurances. Borrower agrees that it shall from time to time, and at its expense, promptly execute and deliver all
instruments, documents and assignments, and shall take all further actions that Lender may request in order to perfect, protect and continue
any security interest granted or purported to be granted hereby or to enable Lender to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, and shall promptly give to the Lender evidence satisfactory to Lender of such action. Without limiting
the generality of the foregoing, Borrower shall:
a.
Take such steps as Lender may request for Lender (i) to obtain an acknowledgment of any bailee having possession of any of the Collateral
that the bailee holds such Collateral for Lender, or (ii) to obtain “control” of any investment property, deposit accounts,
letter-of-credit rights, electronic chattel paper or other Collateral;
b.
Upon the request of the Lender, deliver and pledge Lender any original Note, Instrument, Chattel Paper, Instrument or other document
evidencing any Collateral and any certificate or instrument evidencing any Security, duly endorsed and accompanied by duly executed instruments
of transfer or assignment, all in forms and substance satisfactory to Lender;
c.
Deliver certificates of title and execute all documentation in order to reflect Lender’s security interest on titled motor
Vehicles and vessels;
d.
Furnish to Lender from time-to-time statements and schedules identifying and describing the Collateral and such other reports and
information concerning the Collateral as Lender may request in its sole discretion; and
e.
Not store, keep or maintain any Collateral at any location other than locations where there is a landlord waiver and/or a mortgagee
waiver in favor of Lender, and in forms acceptable to Lender.
Credit and Security Agreement | Page 2 of 7 |
8.
Reserves. Lender requires, and Borrower shall comply with, the reserve requirements, if any, in the Schedule. Notwithstanding
the establishment of any reserve, the Borrower will pay interest on the full amount of the Note commencing on the date of the initial
funding of the Note. Borrower will not earn interest on any funds held in reserve and the existence of the reserve shall not relieve
Borrower of its Obligation to make payments under this Agreement and the Note. Lender will not use the funds in reserve for any other
Borrower or client.
9.
Insurance. Borrower at all times should have the Collateral insured in the Borrower’s name and in the name of the Lender
against loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards with amounts, under policies and by
insurers acceptable to Lender. Each policy shall include a provision for Lender to receive copies directly from the insurance agent of
all written notices to policy holder including, but not limited to any invoices, statements of account, certificates of insurance, cancellation
or substantial modification. Policies shall show Lender as additional insured, loss payee and Lender’s loss payee in a manner acceptable
to Lender. Borrower shall execute and deliver to Lender simultaneously herewith and at any other time hereafter such assignments of policies
of insurance as Lender shall reasonably require. All premiums shall be paid by Borrower, and the policies shall be delivered to Borrower,
and Certificate of Insurance shall be delivered to Lender. If Borrower fails to do so, Lender may (but shall not be required to) procure
such insurance at the Borrower’s expense. BORROWER ALSO GRANTS PERMISSION FOR LENDER TO SPEAK DIRECTLY WITH INSURANCE AGENT AS
REQUIRED TO CONFIRM PROPER INSURANCE IS IN PLACE AND IS CURRENT.
10.
Inspection; Books, Records and Financial Statements and Reports.
a.
Borrower shall at all times keep accurate and complete records of the Collateral, and, at Borrower’s expense, at any time and
without hindrance or delay, permit Lender to inspect the Collateral, and inspect and make extracts from and copies of its books and all
records, including preventative maintenance records relating to the Collateral.
b.
Borrower shall at all times keep, and if requested provide Lender with copies of or allow Lender to inspect, monthly financial records
prepared in accordance with generally accepted accounting principles and which are true and accurate in all material respects, including
an income statement, balance sheet, statement of cash flows on a consolidated basis, accounts payable aging, accounts receivable aging,
inventory report and payroll report.
c.
Without limiting the foregoing, Borrower shall provide Lender the financial statements and reports set forth in the Schedule.
d.
Lender shall be permitted to discuss with Borrower’s owners, directors, officers, managers and auditors Borrower’s business,
procedures, assets, liabilities, financial positions, results of operations and business prospects.
e.
Borrower shall keep its records concerning the Collateral and other business records at its principal place of business or at such
other location as shall have been notified to Lender upon not less than thirty (30) days written notice. The cost of all such inspections
shall be borne by the Borrower.
11.
Taxes. Borrower shall promptly pay when due all property, payroll and any other taxes, assessments and governmental charges
or levies imposed upon the Collateral, except to the extent the validity thereof is being contested in good faith by Borrower and with
reserves for payment of such charges or levies in any amount satisfactory to Lender. Lender reserves the right to require Borrower to
use an independent payroll service if Borrower is delinquent in paying their payroll taxes on time.
12.
Lender’s Duties and Powers. If Borrower fails to perform any covenant or Agreement contained herein after any applicable
cure and notice period, Lender may (but shall not be obligated to) perform, or cause performance of, such covenant or Agreement at the
Borrower’s expense. The powers conferred on Lender hereunder are to protect Lender’s interest in the Collateral and shall
not impose any duty upon Lender to exercise any such powers.
13.
Loans, Dividends or other Distributions to Equity Owners. Borrower covenants and agrees that until all Obligations to Lender
are paid in full, it will not declare or pay any dividend or make any other distribution or loan of any kind to its shareholders, members
or other equity owners, other than:
a.
Normal salary of guaranteed distributions in lieu of salary paid to an equity owner that is also an employee of Borrower; and
b.
With respect to any year in which Borrower is not taxed by the Internal Revenue Services as a “C” corporation, and provided
that Borrower is not in Default at that time of such payment, Borrower may make a distribution of profits to its equity owners in an
amount not to exceed the sum necessary to enable its equity owners to pay their personal state and federal taxes directly attributable
to the profits earned by Borrower for the applicable year.
14.
Fees and Expenses. Borrower shall upon demand pay to Lender the amount of any and all fees and expenses, including without
limitation, the reasonable fees and disbursements of Lender’s counsel and of any experts and agents, which Lender may incur in
connection with the preparation, administration and enforcement of this Agreement, or the sale, collection, or other realization upon
any of the Collateral. In addition, Borrower shall also pay the fees and expenses set forth in the Schedule.
15.
Default. Each of the following shall constitute an event of Default under this Agreement (a “Default”):
a.
Borrower fails to pay any amounts under the Note or any other Obligations when due, provided, however, weekly payments under the
Note shall have a 48-hour grace period for bank payment processing issues out of Borrower’s control;
b.
Borrower fails to observe or perform any of the terms, covenants, representations, promises or conditions contained in this Agreement
after 30 days’ written notice;
c.
Borrower fails to observe or perform any of the terms, covenants or conditions contained in the Note after 30 days’ written
notice;
Credit and Security Agreement | Page 3 of 7 |
d.
Borrower fails to observe or perform any of the terms, covenants or conditions contained in any Loan Document other than this Agreement
or the Note, or any other contract, instrument or Agreement with Lender, which is not cured within 15 days if it is a type of default
that can be cured;
e.
Any representation or warranty made by Borrower herein is false in any material respect as of the time when made or given;
f.
Borrower or any Guarantor shall make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply
for the appointment of a custodian, receiver or any trustee for Borrower, Guarantor or the Collateral, or shall commence any proceedings
under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statue of any jurisdiction,
whether now or hereafter in effect, or if there shall have been filed any such petition or application, or any such proceeding shall
have been commenced against Borrower or Guarantor, which is not dismissed within sixty (60) days;
g.
Any suit is filed against Borrower or Guarantor seeking damages in excess of $25,000 USD and not disclosed to Lender within thirty
(30) days;
h.
Any judgment is entered against Borrower or Guarantor in excess of $25,000 USD;
i.
Any of the Collateral is taken or sought to be taken by levy, execution, or other process of law;
j.
A default under any guaranty of the Loan;
k.
Borrower or Guarantor liquidates, dissolves, or merges into or consolidates with or into any other entity;
l.
If Borrower opens a new bank account and fails to provide an Automatic ACH Debit Agreement covering such account within five (5)
business days of opening such account;
m.
Any financial statement or report provided to Lender is false in any material respect as of the time when made or given;
n.
Borrower obtains a merchant cash advance loan or any other arrangement wherein Borrower sells or assigns its accounts or future cash;
or
o.
Any circumstance or event of any nature which in Lender’s sole reasonable discretion may materially and adversely affect the
condition, operation, business or assets of Borrower or any Guarantor, or materially impairs the ability of Borrower or any Guarantor
to fulfill their Obligations to Lender.
16.
Remedies. Upon an event of Default, Lender shall have the following remedies which may be exercised cumulatively:
a.
To declare all amounts owing under the Note and all other Obligations immediately due and payable;
b.
To exercise any and all rights and remedies provided under this Agreement, the UCC, in law or at equity, including the right to obtain
an injunction against Borrower or a decree of specific performance;
c.
To immediately apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Collateral, the Borrower
or the Borrower’s business. Borrower consents to any such appointment and agrees not to contest any such motion or appointment;
d.
Without prior demand or notice, set-off against and apply any accounts, items and monies in the possession of Lender or payable by
Lender to Borrower to the Obligations;
e.
With or without judicial process or the aid or assistance of others, enter upon any premises in which Collateral may be located and,
without resistance or interference by Borrower, take physical possession of any items of Collateral and maintain such possession on Borrower’s
premises or move the same or any part thereof to such other places as Lender shall choose without being liable to Borrower on account
of any losses, damage or depreciation that may occur, and may dispose of all or any part of the Collateral on any premises of Borrower,
require Borrower to assemble and make available to Lender or to remove all or any part of the Collateral from any premises in which any
part may be located for the purpose of effecting sale or other disposition thereof; and
f.
Sell any item of the Collateral for cash or other value in any number of lots at a public or private sale without demand or notice
(excepting only that Lender shall give Borrower ten (10) days prior written notice of the time and place of any public sale, or the time
after which a private sale may be made, which notice Borrower agrees is reasonable). At any public sale Lender may bid for and purchase
the whole or any part of the property and rights sold and upon compliance with the terms of such sale may hold or dispose of such property
and rights without further accountability to Borrower. Borrower will execute and deliver, or cause to be executed and delivered, such
instruments, documents, registration statements, assignments, waivers, certificates and affidavits, and will supply or cause to be supplied
such further information and take such further action, as Lender shall require in connection with such sales. Borrower shall be responsible
for all costs of sale or other disposition of the Collateral. The proceeds of all sales and collections hereunder shall be applied against
the Obligations in such order as Lender shall elect in its sole discretion.
Credit and Security Agreement | Page 4 of 7 |
Failure
to exercise any and all rights or remedies Lender may have in the event of any event of Default
shall not constitute a waiver of the right to exercise such rights or remedies in the event
of any subsequent event of Default, whether of the same or different nature. No waiver of
any right or remedy by Lender shall be effective unless made in writing and signed by Lender,
nor shall any waiver on one occasion apply to any future occasion.
17.
Waivers. Borrower and each Guarantor each hereby waive: (a) any requirement for Lender to marshal the Collateral or to resort
to the Collateral in any particular order; (b) the right to extend or excuse performance of any of Borrower’s or Guarantor’s
Obligations based on force majeure; and (c) to the extent permitted by applicable law, the benefits and advantages of any valuation,
stay, appraisement, extension or redemption laws now or hereafter existing which, but for this provision, might be applicable.
18.
Discharge and Payoff. In recognition of the Lender’s right to have its reasonable attorneys’ fees and other expenses
incurred in connection with this Agreement secured by the Collateral, notwithstanding payment in full of all Obligations by Borrower,
Lender shall not be required to file terminations or satisfactions of any of Lender’s liens on the Collateral unless and until
Borrower and all Guarantors shall have provided general releases in favor of Lender, in form satisfactory to Lender. Borrower understands
that this provision constitutes a waiver of its rights under Section 9-513 of the Uniform Commercial Code.
19.
No Waiver; Cumulative Remedies. No failure on the part of Lender to exercise, and no delay on the part of Lender in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power
or remedy by Lender preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies that may be available to Lender, whether at law, in equity or otherwise.
No course of dealing between Borrower and Lender shall operate as a waiver of any rights of Lender under this Agreement or in respect
of the Collateral or the Obligations.
20.
Indemnity. Borrower assumes liability for and does hereby agree to indemnify, protect, save and keep harmless Lender and its
agents, from and against any and all liabilities, claims, losses, Obligations, damages, penalties, actions, and suites of whatsoever
kind and nature imposed on, incurred by or asserted against Lender or its agents, in any way relating to or growing out of this Agreement,
the Note or the Collateral (including without limitation, enforcement of this Agreement and the Note or disposition of the Collateral),
except claims, losses or liabilities resulting solely from Lender’s gross negligence or willful misconduct.
21.
Right of First Refusal. In consideration of the Lender providing the Loan to the Borrower, Borrower hereby agrees that it
will, within two (2) days of receipt, provide a copy of any proposal letter, term sheet, letter of intent or commitment letter from any
Lender offering to Borrower a refinance of the Loan. Lender shall have the right of first refusal to match the offer(s) of such other
Lender(s) within two (2) days of receipt thereof, with a non-response being considered a rejection of such offer(s), and if Lender advises
Borrower that it intends to meet the financial and other material terms set forth in such offer(s), Borrower will be obligated to enter
into an amendment to this Agreement and the Note extending the terms of this Agreement and the Note for at least the term proposed in
such other offer(s), and amending the financial and other material terms set forth in this Agreement and the Note. Notwithstanding the
foregoing, Borrower recognizes that this Agreement and the Note can only be terminated as provided herein and therein. Failure of Lender
to meet the terms set forth in such letter of interest or commitment letter does not relieve the Borrower from its Obligations hereunder.
22.
Use of Borrower’s Name, etc. Provided Lender obtains Borrower’s prior written approval in each instance, Borrower
hereby authorizes Lender to use the Borrower’s name and tradenames together with variants of such names and related logotypes and
the amount of the transaction in advertising that promotes Lender and the business transaction between any Borrower and Lender. Neither
Lender nor any of its subsidiaries, affiliates, officers, employees and advertising agents shall have any liability to Borrower arising
out of or related to the reasonable exercise of the rights hereby granted to Lender.
Credit and Security Agreement | Page 5 of 7 |
23.
Miscellaneous. The invalidity or unenforceability of any term or provision hereof
shall not affect the validity or enforceability of any other term or provision hereof. Neither
this Agreement nor any term hereof may be amended orally, nor may any provision hereof be
waived orally but only by an instrument in writing signed by Lender and, in the case of an
amendment, by Borrower, and any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. This Agreement shall be governed by
and construed in accordance with the law of the Chosen Forum, except as required by mandatory
provisions of law and except to the extent that the validity or perfection of the security
interest hereunder in respect of any particular Collateral are governed by the law of a jurisdiction
other than the Chosen Forum. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all such separate counterparts shall
together constitute but one and the same instrument. Each party acknowledges that is has
reviewed this Agreement, and the parties hereby agree that the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of this Agreement.
24.
Assignments. This Agreement shall bind the parties hereto and their respective successors and assigns. This Agreement and
the Note may be assigned by Lender to a third party, and the Borrower consents to such assignment and agrees that this Agreement and
the Note will be in favor of the assignee(s) upon assignment, without any defenses, counterclaims or setoffs of any kind whatsoever.
All of the terms of this Agreement and the Note shall inure to the benefit of Lender and its successors and assigns and shall be binding
upon each and every one of the Obligors and their respective heirs, executors, administrators, personal representatives, successors and
assigns, jointly and severally. Lender may grant participations in all or any portion of, and may assign all or any part of Lender’s
rights under, this Agreement and the Note. Lender may disclose to any such participant or assignee any and all information held by or
known to Lender at any time with respect to any Obligor.
25.
Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed to have been given
three (3) business days after deposit in the mail, designated as certified mail, return receipt requested, postage-prepaid, one (1) business
day after being entrusted to a reputable commercial overnight delivery service addressed to the party to whom such notice is directed,
or upon sending if sent via electronic mail, each in accordance with the information in the Schedule . Any party hereto may change the
address to which notices shall be directed under this Paragraph by giving three (3) business days written notice of such change to the
other parties.
26.
WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THEY OR ANY OTHER MAY HAVE
TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT AND ANY DOCUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
OR ACTIONS OF EITHER OR ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.
27.
JURISDICTION AND VENUE. THE PARTIES AGREE THAT ANY ACTION TO ENFORCE BORROWER’S OR GUARANTOR’S OBLIGATIONS TO
LENDER OR ANY ACTION RELATING TO OR ARISING OUT OF THE LOAN OR THIS AGREEMENT SHALL BE PROSECUTED IN THE CHOSEN FORUM, AND BORROWER AND
GUARANTOR SUBMIT TO THE JURISDICTION OF THE CHOSEN FORUM. BORROWER AND GUARANTOR WAIVE ANY AND ALL RIGHTS TO CONTEST THE JURISDICTION
AND VENUE OF ANY ACTION BROUGHT IN THIS MATTER AND BORROWER AND GUARANTOR MAY BRING ANY ACTION AGAINST LENDER ONLY IN THE CHOSEN FORUM.
28.
USA Patriot Act Notification The following notification is provided to Borrower pursuant to Section 326 of the USA Patriot
Act of 2001, 31 U.S.C. Section 5318: IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government
fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and
record information that identifies each person or entity that opens an account, including any deposit account, treasury management account,
loan or other extension of credit. Lender may ask for the name, address, date of birth, and other information that will allow us to identify
all Borrowers, principals and owners. Lender may also ask to see your driver’s license or other identifying documents.
Credit and Security Agreement | Page 6 of 7 |
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
Borrower:
Worksport USA Operations Corporation |
|
Guarantor:
Worksport Ltd. |
|
|
|
|
Signature: |
|
|
Signature: |
|
Name: |
Steven
Rossi |
|
Name: |
Steven
Rossi |
Title: |
President |
|
Title: |
CEO |
Date: |
|
|
Date: |
|
|
|
|
|
|
Guarantor:
Worksport New York Operations Corporation |
|
Lender:
LOEB Term Solutions LLC |
|
|
|
Signature: |
|
|
Signature: |
|
Name: |
Steven
Rossi |
|
Name: |
Howard
Newman |
Title: |
President |
|
Title: |
Manager |
Date: |
|
|
Date: |
|
Credit and Security Agreement | Page 7 of 7 |
Exhibit
10.2
TERM
PROMISSORY NOTE
Principal
Loan
Amount: |
|
$1,487,200.00 |
|
City,
State: |
|
Chicago,
IL |
|
|
|
|
Date: |
|
|
FOR
VALUE RECEIVED, Worksport USA Operations Corporation, a Colorado corporation with its principal place of business located at 2500 N.
America Drive, West Seneca, New York 14224 (“Borrower”), promises to pay to the order of Loeb Term Solutions LLC, an Illinois
limited liability company with its principal place of business located at 8609 W. Bryn Mawr, Suite 208, Chicago, Illinois 60631 (“Lender”),
the principal sum of ONE MILLION FOUR HUNDRED EIGHTY-SEVEN THOUSAND TWO HUNDRED AND NO/100 DOLLARS ($1,487,200.00), together with interest
from time to time outstanding at the Prime Rate (as defined below) plus seven percent (7%) per annum (the “Effective Rate”)
or the Maximum Rate (as defined below), whichever is lower. Interest shall be computed based on a 365 day year based on a simple interest
basis. The Prime Rate shall mean the rate of interest quoted in the Wall Street Journal, Money Rates Section as the “Prime Rate”
(currently defined as the base rate on corporate loans posted by at least 75% of the nation’s thirty (30) largest banks). In the
event that the Wall Street Journal quotes more than one rate, or a range of rates as the Prime Rate, then the Prime Rate shall mean the
highest of the quoted rates. In the event that the Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate shall be the
average interest rate of the three largest U.S. money center commercial banks, as determined by Lender. The Effective Rate hereunder
shall change each time there is a change in the Prime Rate. As used herein, the “Maximum Rate” shall mean, on any day, the
highest non-usurious rate of interest permitted by applicable law on such day.
The
proceeds of this Note shall be used exclusively for business purposes and not for household, family or personal use.
Borrower
and all endorsers, sureties, guarantors and any other persons liable or to become liable with respect to the loan (the “Loan”)
evidenced by this Term Promissory Note (the “Note”) are each included in the term “Obligors” as used in this
Note.
This
Note is referred to in and was delivered pursuant to a certain Credit and Security Agreement of even date herewith, as may be amended
or restated from time to time (the “Security Agreement”). Reference is made to the Security Agreement for additional terms
relating to this Note and the security given for this Note. Any capitalized terms used in this Note, if not defined in this Note, will
have the meanings assigned to such terms in the Security Agreement.
From
and after an event of Default (as defined in the Security Agreement) subject to any notice and cure periods provided in the loan documents,
and regardless of whether the Lender elects to accelerate the Maturity Date of this Note, the entire principal remaining unpaid hereunder
shall bear interest at the rate equal to the Effective Rate plus six percent (6%) per annum or the Maximum Rate, whichever is lower.
Borrower
understands and agrees that the weekly payments under this Note are based on a five (5) year amortization (the “Amortization Period”),
but with a balloon payment of all principal, accrued interest and all other amounts owing hereunder due on the three (3) year Maturity
Date (defined below).
Payments
of principal and interest under this Note shall be payable in lawful money of the United States when due without set-off, counterclaim,
deduction or withholding for any reason whatsoever on the dates and in the amounts specified below:
Payments
of principal and interest shall be made in one hundred and fifty-six (156) consecutive weekly payments as follows: One hundred and fifty-five
(155) weekly installments of principal and interest on each Wednesday commencing on the first Wednesday after the date of this Note,
and then the one hundred and fifty-sixth (156th) and final installment due on the one hundred and fifty-sixth (156th)
Wednesday after the date of this Note (the “Maturity Date”) of all outstanding principal, accrued interest, fees and all
other amounts due hereunder. It is understood and agreed that weekly payments will first be applied to payment of interest, second to
late charges and other fees, and the balance, if any, will be applied to the payment of principal. Borrower understands and agrees that
the weekly payments will not fully amortize the Loan over a period of three (3) years, and that the final balloon payment will be substantially
higher than the regular weekly payments. In addition, in the event that the Prime Rate increases the Lender may require an adjustment
in the weekly payments hereunder by utilizing the Effective Rate in effect on such date and the principal amount outstanding on such
date such that the monthly payments so calculated would pay off the Note in full by the end of the Amortization Period, and which adjusted
amount the Borrower agrees to pay. In the event of such adjustment in the weekly payment, the Amortization Period of the Loan shall not
change. The Lender shall provide Borrower with an amortization table in connection with the Loan closing setting forth, among other things,
the then current weekly payment amount, and shall use reasonable efforts to provide Borrower a revised amortization table when it advises
Borrower of a change in the weekly payment amount.
Term Promissory Note | Page 1 of 3 |
If
any payment falls due on a day other than a Business Day, then such payment shall instead be made on the next succeeding Business Day,
and interest shall accrue accordingly. Any payment received by Lender after 1:00 p.m. (Central Standard Time) shall not be credited against
the indebtedness under this Note until the next succeeding Business Day. “Business Day” means any day excluding Saturday,
Sunday, and any day which is a legal holiday under the laws of the State of Illinois or which is a day on which Lender is otherwise closed
for transacting business. Borrower shall receive immediate credit on payments only if made in the form of a federal wire transfer of
cleared funds.
All
payments to the Lender shall either (a) be made via ACH payment pursuant to an Automatic ACH Debit Agreement, or (b) are payable to the
Lender at the following bank account, or such other account as may be determined by Lender from time to time:
Wiring
Instructions
#
Upon
an event of Default or at any time thereafter, subject to any notice and cure periods provided in the Loan Documents, at the option of
Lender all principal, interest and any other amounts remaining unpaid hereunder shall immediately become due and payable and Lender shall
be entitled to pursue any and all rights and remedies provided by this Note, the Security Agreement and applicable law.
It
is the intent of the parties that any money or other property charged, taken or received as interest, a finance charge or fee for the
Loan, shall not exceed the limits (if any) imposed or provided by applicable law, and Lender hereby waives any right to demand such excess.
In the event that any money or other property charged, taken or received as interest, a finance charge or a fee under this Note exceeds
the Maximum Rate permitted by applicable law, then without further agreement or notice the obligation to be fulfilled shall be automatically
reduced to such limit and all sums received by Lender in excess of those lawfully collectible as interest shall be (a) applied against
the principal of the Loan with the same force and effect as though the payor had specifically designated such extra sums to be so applied
to principal and Lender had agreed to accept such extra payment(s) as a premium-free prepayment or prepayments, and (b) if there are
no outstanding obligations under this Note the remaining amount, if any, shall be refunded to Borrower.
Subject
to any notice and cure periods provided in the Loan Documents, the Obligors hereby severally: (a) waive presentment, protest, notice
of dishonor, and the filing of any suit against or joinder of any other person; (b) waive any exemption of any property, wherever located,
from garnishment, levy, execution, seizure or attachment prior to or in execution of judgment, or sale under execution or other process
for the collection of debts; (c) waive any right to plead laches as a defense in any action or proceeding; (d) consent and agree that,
at any time and from time to time without notice, Lender and any Borrower, Guarantor, or their respective successors and assigns then
primarily liable for the Loan may agree to renew, extend or compromise the Loan in whole or in part or to modify the terms of the Loan
in any respect whatsoever; and (e) agree that until Lender receives all sums due under this Note in immediately available funds, no Obligor
shall be released from liability with respect to the Loan unless Lender expressly releases such Obligor in a writing signed by Lender,
and Lender’s release of any Obligor(s) shall not release any other person liable with respect to the Loan.
This
Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois.
Any
provision of this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
Term Promissory Note | Page 2 of 3 |
If
this Note is signed by more than one person, then the term “Borrower” as used in this Note shall refer to all such persons
jointly and severally, and all agreements, covenants, waivers, consents, representations, warranties and other provisions in this Note
are made by and shall be binding upon each and every undersigned person, jointly and severally. The term “Lender” shall be
deemed to include any subsequent holder(s) of this Note.
This
Note cannot be changed or modified orally. Lender shall have the right unilaterally to correct patent errors or omissions. This Agreement
may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall
together constitute but one and the same instrument.
IN
WITNESS WHEREOF, the Borrower has caused this Term Promissory Note to be executed as of the date first written above.
Borrower: |
|
Worksport
USA Operations Corporation |
|
|
|
|
|
Signature: |
|
|
|
Name: |
|
Steven
Rossi |
|
Title: |
|
President |
|
Date: |
|
|
|
Term Promissory Note | Page 3 of 3 |
Exhibit
10.3
GUARANTY
This
Guaranty (“Guaranty”) is made on __________________, by Worksport Ltd., a Nevada corporation with its principal address
of 2500 N. America Drive, West Seneca (“Guarantor”), in favor of Loeb Term Solutions LLC (“Lender”) to
induce Lender to make a loan and/or extend or continue credit to Worksport USA Operations Corporation, a Colorado corporation
(“Borrower”) and because Guarantor has determined that executing and delivering this Guaranty is in Guarantor’s interest
and to Guarantor’s financial benefit.
1. |
Guaranty.
Guarantor hereby absolutely, irrevocably and unconditionally guarantees to Lender: (a) the full, prompt and unconditional payment
when due of all indebtedness and obligations of Borrower to Lender, including, but not limited to, principal, interest and fees on
that certain Term Promissory Note dated as of the same date hereof (the “Note”), as it may be amended or restated and
whether on demand, at maturity, pursuant to mandatory or optional prepayments, by acceleration or otherwise; and (b) the punctual
and faithful performance and observation by Borrower of all duties, agreements, covenants, representations and obligations of Borrower
contained in the Loan Documents (as defined in Section 3) (the above subsections (a) and (b) being collectively referred to as the
“Indebtedness”). |
|
|
2. |
Absolute,
Unconditional and Continuing Obligation. This Guaranty is an absolute, continuing, unconditional, unlimited, and irrevocable
guaranty. Guarantor will not be relieved from any obligations under this Guaranty until this Guaranty is terminated in accordance
with Section 14. The obligations and liabilities of Guarantor will continue notwithstanding any defect in the genuineness, validity
or enforceability of the Indebtedness or the Loan Documents, or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of the liabilities of a surety or guarantor or which might otherwise limit recourse against Guarantor. |
|
|
3. |
The
Loan Documents. The Note, and the Credit and Security Agreement and all other related documents now existing or hereafter
arising and executed in connection with the loan evidenced by the Note, including all amendments and restatements thereto (collectively,
the “Loan Documents”), are incorporated into and made a part of this Guaranty by reference. |
|
|
4. |
Continuation
of Liability. The liability and obligations of Guarantor will in no way be affected, impaired, diminished or released by
any action or inaction whatsoever other than the indefeasible payment in full and in cash of the Indebtedness. |
|
|
5. |
Recourse/Exercise
of Rights by Lender. At any time when the Indebtedness, or any portion thereof, has not been paid when due (whether by acceleration
or otherwise), subject to any notice and cure periods in the Loan Documents, or in the event that an insolvency proceeding is brought
by or against the Borrower or the Guarantor, Lender can require that Guarantor pay Lender the amounts owing on this Guaranty. |
|
|
6. |
Subordination/Subrogation.
In the event that Guarantor becomes obligated to pay any sums to Borrower, or in the event that Borrower or any subsequent owner
of any Collateral is now or hereafter becomes indebted to Guarantor other than for customary salary and bonuses (collectively, “Debt”),
the Debt will at all times be subordinate as to lien, payment and all other respects, to the Indebtedness, and Guarantor will not,
among other things, accept any payment from Borrower with respect to the Debt without Lender’s prior written consent. Furthermore,
until the Indebtedness is indefeasibly paid in full and in cash, and the Loan Agreement is terminated, Guarantor hereby absolutely,
irrevocably and unconditionally waives all rights Guarantor may have, at law or in equity, to seek or claim subrogation. Lender has
no duty to enforce or protect any rights which the Guarantor may have against Borrower or any other Person, and Guarantor assumes
full responsibility for enforcing and protecting such rights. |
Company Guaranty | Page 1 of 3 |
7. |
Representations
and Warranties. Guarantor represents, warrants and covenants to Lender that: (a) Guarantor has completely read and understands
the Loan Documents and agrees to all those portions which apply to Guarantor; (b) Guarantor was provided an opportunity to review
the Loan Documents with its legal counsel; (c) any financial statements of Guarantor furnished to Lender are true and correct in
all material respects and include all contingent liabilities of Guarantor; (d) since the date of any financial statements furnished
to Lender, no material adverse change has occurred in the financial condition of Guarantor; (e) to Guarantor’s knowledge there
are no pending or threatened legal proceedings or judgments against Guarantor, and no federal or state tax liens have been filed
or threatened against Guarantor; and (f) Guarantor is not in default or claimed default under any agreement for borrowed money. Guarantor
agrees to immediately give Lender written notice of any material adverse change in its financial condition. |
|
|
8. |
Expenses.
Guarantor agrees to pay all reasonable expenses (including reasonable attorneys’ fees) incurred by Lender in connection with
the enforcement of Lender’s rights under the Loan Documents, this Guaranty, and the collection of the Indebtedness. |
|
|
9. |
Transfer
of Assets. Guarantor further agrees that until the Indebtedness is indefeasibly paid in full, and in cash, and the Loan Agreement
is terminated, Guarantor will not, without Lender’s prior written consent: (i) make any voluntary transfer of any of Guarantor’s
assets which would have the effect of materially diminishing Guarantor’s present net worth or (ii) guaranty the debts or obligations
of any other person or entity. |
|
|
10. |
Reinstatement.
This Guaranty will continue to be effective or will be automatically reinstated, as the case may be, if at any time payment
of all or part of the Indebtedness is rescinded or must otherwise be restored or returned by Lender, including in connection with
Borrower’s bankruptcy or insolvency. |
|
|
11. |
Joint
and Several Liability. The term “Guarantor” shall mean each entity executing this Guaranty, each individually
and together collectively, and the obligations of Guarantor and any other guarantor executing a guaranty of all or any portion of
the Indebtedness will be joint and several. |
|
|
12. |
Assignability/Binding
Effect. This Guaranty shall be assignable by Lender without notice to Guarantor and shall inure to the benefit of Lender
and to any subsequent successors and assigns. |
|
|
13. |
Termination.
Notwithstanding anything contained herein to the contrary, the liability of Guarantor will be terminated only in the event that (i)
Borrower or Guarantor has indefeasibly paid Lender in cash and in full the Indebtedness and (ii) the Loan Agreement is terminated.
|
|
|
14. |
Severability.
If any provision of this Guaranty is in conflict with any statute or rule of law or is otherwise unenforceable for any reason, then
that provision will be deemed null and void to the extent of the conflict or unenforceability and will be deemed severable, but it
will not invalidate any other provision of this Guaranty. |
|
|
15. |
Complete
Agreement. This Guaranty, and any collateral document executed in favor of Lender, are the final, complete and exclusive
expression of the agreement between Guarantor and Lender with respect to the subject matter of this Guaranty. This Guaranty cannot
be modified or amended except in a writing signed by both Guarantor and Lender. This Guaranty may be assigned by Lender to a third
party in connection with an assignment of the Indebtedness, and the Guarantor consents to such assignment and agrees that this Guaranty
will be in favor of the assignee upon assignment, without any defenses, counterclaims or setoffs of any kind whatsoever. |
|
|
16. |
Cumulative
Rights. All rights, powers and remedies of Lender hereunder and under the Loan Documents are cumulative and not alternative
and shall be in addition to all rights, powers and remedies given to Lender by law and by agreement. |
Company Guaranty | Page 2 of 3 |
17. |
Choice
of Law, Jurisdiction and Venue. This Guaranty shall be governed by and construed in accordance with the laws of the State
of Illinois except as required by mandatory provisions of law, and shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns. Neither this Guaranty nor any term hereof may be amended orally, nor may any provision hereof
be waived orally but only by an instrument in writing signed by Lender and, in the case of an amendment, by Guarantor and any such
waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. The parties agree
that any action to enforce Guarantor’s obligations to Lender or any action relating to or arising out of this Guaranty shall
be prosecuted in any federal, state or local court situated in the County of Cook, State of Illinois (unless Lender, in its sole
discretion, elects some other jurisdiction), and Guarantor submits to the jurisdiction of any such court selected by Lender. Guarantor
waives any and all rights to contest the jurisdiction and venue of any action brought in this matter, and Guarantor may bring any
action against Lender only in the state or federal courts located in the State of Illinois. |
|
|
18. |
WAIVER
OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THEY OR ANY OTHER MAY HAVE TO
A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY AND ANY DOCUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
OR ACTIONS OF EITHER OR ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PROVIDING THE FINANCING TO BORROWER AND
ACCEPTING THIS GUARANTY FROM GUARANTOR. |
|
|
19. |
SIGNATURES.
This Guaranty may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one and the same instrument. Each party acknowledges that it has reviewed this Guaranty,
and the parties that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Guaranty. Delivery of this Guaranty or an executed counterpart hereof shall be
deemed a good and valid execution and delivery hereof or thereof. |
|
|
20. |
NOTICE.
All notices required to be given to Guarantor shall be deemed given upon the first to occur of (i) deposit thereof in a receptacle
under the control of the United States Postal Service, (ii) transmittal by electronic means to a receiver under the control of such
party; or (iii) actual receipt by such party or an employee or agent of such party. All notices to Lender shall be deemed given upon
actual receipt by a responsible officer of Lender. For the purposes hereof, notices hereunder shall be sent to the following addresses
or to such other addresses as each such party may in writing hereafter indicate: |
GUARANTOR:
|
|
Worksport
Ltd. |
|
LENDER: |
|
Loeb
Term Solutions LLC |
|
|
|
|
|
|
|
Address: |
|
2500
N. America Dr. |
|
Address: |
|
8609
W. Bryn Mawr, Suite 208 |
City,
State & Zip: |
|
West
Seneca, NY 14224 |
|
City,
State & Zip: |
|
Chicago,
IL 60631 |
Office
Number: |
|
|
|
Office
Number: |
|
|
Mobile
Number: |
|
|
|
Mobile
Number: |
|
|
Email
Address: |
|
|
|
Email
Address: |
|
|
The
Guarantor executes this Guaranty as of the day and year first above written by its duly authorized representative.
GUARANTOR: |
Worksport
Ltd. |
|
|
|
|
Signature: |
|
|
Print
Name: |
Steven
Rossi |
|
Title: |
CEO |
|
Company Guaranty | Page 3 of 3 |
Exhibit
10.4
GUARANTY
This
Guaranty (“Guaranty”) is made on __________________, by Worksport New York Operations Corporation, a New York corporation
with its principal address of 2500 N. America Drive, West Seneca (“Guarantor”), in favor of Loeb Term Solutions LLC
(“Lender”) to induce Lender to make a loan and/or extend or continue credit to Worksport USA Operations Corporation, a
Colorado corporation (“Borrower”) and because Guarantor has determined that executing and delivering this Guaranty is in
Guarantor’s interest and to Guarantor’s financial benefit.
1. |
Guaranty.
Guarantor hereby absolutely, irrevocably and unconditionally guarantees to Lender: (a) the full, prompt and unconditional payment
when due of all indebtedness and obligations of Borrower to Lender, including, but not limited to, principal, interest and fees on
that certain Term Promissory Note dated as of the same date hereof (the “Note”), as it may be amended or restated and
whether on demand, at maturity, pursuant to mandatory or optional prepayments, by acceleration or otherwise; and (b) the punctual
and faithful performance and observation by Borrower of all duties, agreements, covenants, representations and obligations of Borrower
contained in the Loan Documents (as defined in Section 3) (the above subsections (a) and (b) being collectively referred to as the
“Indebtedness”). |
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2. |
Absolute,
Unconditional and Continuing Obligation. This Guaranty is an absolute, continuing, unconditional, unlimited, and irrevocable
guaranty. Guarantor will not be relieved from any obligations under this Guaranty until this Guaranty is terminated in accordance
with Section 14. The obligations and liabilities of Guarantor will continue notwithstanding any defect in the genuineness, validity
or enforceability of the Indebtedness or the Loan Documents, or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of the liabilities of a surety or guarantor or which might otherwise limit recourse against Guarantor. |
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3. |
The
Loan Documents. The Note, and the Credit and Security Agreement and all other related documents now existing or hereafter
arising and executed in connection with the loan evidenced by the Note, including all amendments and restatements thereto (collectively,
the “Loan Documents”), are incorporated into and made a part of this Guaranty by reference. |
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4. |
Continuation
of Liability. The liability and obligations of Guarantor will in no way be affected, impaired, diminished or released by
any action or inaction whatsoever other than the indefeasible payment in full and in cash of the Indebtedness. |
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5. |
Recourse/Exercise
of Rights by Lender. At any time when the Indebtedness, or any portion thereof, has not been paid when due (whether by acceleration
or otherwise), subject to any notice and cure periods in the Loan Documents, or in the event that an insolvency proceeding is brought
by or against the Borrower or the Guarantor, Lender can require that Guarantor pay Lender the amounts owing on this Guaranty. |
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6. |
Subordination/Subrogation.
In the event that Guarantor becomes obligated to pay any sums to Borrower, or in the event that Borrower or any subsequent owner
of any Collateral is now or hereafter becomes indebted to Guarantor other than for customary salary and bonuses (collectively, “Debt”),
the Debt will at all times be subordinate as to lien, payment and all other respects, to the Indebtedness, and Guarantor will not,
among other things, accept any payment from Borrower with respect to the Debt without Lender’s prior written consent. Furthermore,
until the Indebtedness is indefeasibly paid in full and in cash, and the Loan Agreement is terminated, Guarantor hereby absolutely,
irrevocably and unconditionally waives all rights Guarantor may have, at law or in equity, to seek or claim subrogation. Lender has
no duty to enforce or protect any rights which the Guarantor may have against Borrower or any other Person, and Guarantor assumes
full responsibility for enforcing and protecting such rights. |
Company Guaranty | Page 1 of 3 |
7. |
Representations
and Warranties. Guarantor represents, warrants and covenants to Lender that: (a) Guarantor has completely read and understands
the Loan Documents and agrees to all those portions which apply to Guarantor; (b) Guarantor was provided an opportunity to review
the Loan Documents with its legal counsel; (c) any financial statements of Guarantor furnished to Lender are true and correct in
all material respects and include all contingent liabilities of Guarantor; (d) since the date of any financial statements furnished
to Lender, no material adverse change has occurred in the financial condition of Guarantor; (e) to Guarantor’s knowledge there
are no pending or threatened legal proceedings or judgments against Guarantor, and no federal or state tax liens have been filed
or threatened against Guarantor; and (f) Guarantor is not in default or claimed default under any agreement for borrowed money. Guarantor
agrees to immediately give Lender written notice of any material adverse change in its financial condition. |
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8. |
Expenses.
Guarantor agrees to pay all reasonable expenses (including reasonable attorneys’ fees) incurred by Lender in connection with
the enforcement of Lender’s rights under the Loan Documents, this Guaranty, and the collection of the Indebtedness. |
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9. |
Transfer
of Assets. Guarantor further agrees that until the Indebtedness is indefeasibly paid in full, and in cash, and the Loan Agreement
is terminated, Guarantor will not, without Lender’s prior written consent: (i) make any voluntary transfer of any of Guarantor’s
assets which would have the effect of materially diminishing Guarantor’s present net worth or (ii) guaranty the debts or obligations
of any other person or entity. |
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10. |
Reinstatement.
This Guaranty will continue to be effective or will be automatically reinstated, as the case may be, if at any time payment
of all or part of the Indebtedness is rescinded or must otherwise be restored or returned by Lender, including in connection with
Borrower’s bankruptcy or insolvency. |
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11. |
Joint
and Several Liability. The term “Guarantor” shall mean each entity executing this Guaranty, each individually
and together collectively, and the obligations of Guarantor and any other guarantor executing a guaranty of all or any portion of
the Indebtedness will be joint and several. |
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12. |
Assignability/Binding
Effect. This Guaranty shall be assignable by Lender without notice to Guarantor and shall inure to the benefit of Lender
and to any subsequent successors and assigns. |
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13. |
Termination.
Notwithstanding anything contained herein to the contrary, the liability of Guarantor will be terminated only in the event that (i)
Borrower or Guarantor has indefeasibly paid Lender in cash and in full the Indebtedness and (ii) the Loan Agreement is terminated.
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14. |
Severability.
If any provision of this Guaranty is in conflict with any statute or rule of law or is otherwise unenforceable for any reason, then
that provision will be deemed null and void to the extent of the conflict or unenforceability and will be deemed severable, but it
will not invalidate any other provision of this Guaranty. |
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15. |
Complete
Agreement. This Guaranty, and any collateral document executed in favor of Lender, are the final, complete and exclusive
expression of the agreement between Guarantor and Lender with respect to the subject matter of this Guaranty. This Guaranty cannot
be modified or amended except in a writing signed by both Guarantor and Lender. This Guaranty may be assigned by Lender to a third
party in connection with an assignment of the Indebtedness, and the Guarantor consents to such assignment and agrees that this Guaranty
will be in favor of the assignee upon assignment, without any defenses, counterclaims or setoffs of any kind whatsoever. |
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16. |
Cumulative
Rights. All rights, powers and remedies of Lender hereunder and under the Loan Documents are cumulative and not alternative
and shall be in addition to all rights, powers and remedies given to Lender by law and by agreement. |
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17. |
Choice
of Law, Jurisdiction and Venue. This Guaranty shall be governed by and construed in accordance with the laws of the State
of Illinois except as required by mandatory provisions of law, and shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns. Neither this Guaranty nor any term hereof may be amended orally, nor may any provision hereof
be waived orally but only by an instrument in writing signed by Lender and, in the case of an amendment, by Guarantor and any such
waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. The parties agree
that any action to enforce Guarantor’s obligations to Lender or any action relating to or arising out of this Guaranty shall
be prosecuted in any federal, state or local court situated in the County of Cook, State of Illinois (unless Lender, in its sole
discretion, elects some other jurisdiction), and Guarantor submits to the jurisdiction of any such court selected by Lender. Guarantor
waives any and all rights to contest the jurisdiction and venue of any action brought in this matter and Guarantor may bring any
action against Lender only in the state or federal courts located in the State of Illinois. |
Company Guaranty | Page 2 of 3 |
18. |
WAIVER
OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THEY OR ANY OTHER MAY HAVE TO
A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY AND ANY DOCUMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
OR ACTIONS OF EITHER OR ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PROVIDING THE FINANCING TO BORROWER AND
ACCEPTING THIS GUARANTY FROM GUARANTOR. |
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19. |
SIGNATURES.
This Guaranty may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one and the same instrument. Each party acknowledges that it has reviewed this Guaranty,
and the parties that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Guaranty. Delivery of this Guaranty or an executed counterpart hereof shall be
deemed a good and valid execution and delivery hereof or thereof. |
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20. |
NOTICE.
All notices required to be given to Guarantor shall be deemed given upon the first to occur of (i) deposit thereof in a receptacle
under the control of the United States Postal Service, (ii) transmittal by electronic means to a receiver under the control of such
party; or (iii) actual receipt by such party or an employee or agent of such party. All notices to Lender shall be deemed given upon
actual receipt by a responsible officer of Lender. For the purposes hereof, notices hereunder shall be sent to the following addresses
or to such other addresses as each such party may in writing hereafter indicate: |
GUARANTOR:
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Worksport
New York Operations Corporation |
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LENDER: |
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Loeb
Term Solutions LLC |
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Address: |
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2500
N. America Dr. |
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Address: |
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8609
W. Bryn Mawr, Suite 208 |
City,
State & Zip: |
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West
Seneca, NY 14224 |
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City,
State & Zip: |
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Chicago,
IL 60631 |
Office
Number: |
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888-554-8789 |
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Office
Number: |
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Mobile
Number: |
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Mobile
Number: |
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Email
Address: |
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Email
Address: |
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The
Guarantor executes this Guaranty as of the day and year first above written by its duly authorized representative.
GUARANTOR: |
Worksport
New York Operations Corporation |
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Signature: |
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Print
Name: |
Steven
Rossi |
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Title: |
President |
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Company Guaranty | Page 3 of 3 |
Exhibit
10.5
Date:
_____________________
Loeb
Term Solutions LLC (“LTS”)
8609
W. Bryn Mawr, Suite 208
Chicago,
IL 60631
RE:
Worksport USA Operations Corporation (the “Borrower”)
Ladies
and Gentlemen:
The
undersigned (“Indemnitor”) is entering into this Indemnification Agreement (this “Agreement”) to induce LTS
to extend or continue to extend financial accommodations to or for the benefit of the Borrower pursuant to the terms of a
Term Promissory Note and Security Agreement both dated as of the date hereof between LTS and Borrower, as may be amended
or restated (collectively the “Credit Agreement”). All obligations of the Borrower to LTS, whether pursuant
to the Credit Agreement, or otherwise, are hereinafter referred to as the “Obligations”. Any capitalized term not defined
herein shall have the meaning ascribed thereto in the Credit Agreement.
Indemnitor
hereby continuously covenants, represents and warrants to LTS that:
| A. | Financial
Statements and Reports. All financial statements – excluding projections and
any forward-looking statements – and other final reports made or to be made by the
Borrower, or by any direct or indirect, absolute or contingent obligor on the Obligations,
to LTS are and shall remain true and correct in all material respects. |
| i. | All
representations made by Borrower to LTS, and all documents and schedules given
by Borrower to LTS, relating to the description, quantity, quality, condition
and valuation of the Machinery & Equipment (“M&E”) are and shall be materially
true and correct. |
| ii. | Borrower
has marked all M&E funded by LTS and/or has segregated it from all other M&E. |
| iii. | All
M&E is located only at the address or addresses of Borrower which have been disclosed
to LTS in writing, and landlord, warehouse and mortgagee waivers, as applicable, for
all such locations have been provided to LTS. |
| iv. | No
M&E will be moved from its current location without prior written notice to LTS. |
| v. | All
M&E will be properly maintained in accordance with manufacturers’ requirements. |
| vi. | All
M&E will be insured as required in the Credit Agreement or as otherwise required by LTS. |
| C. | Title
to Collateral. Borrower: |
| i. | Is
the owner of all collateral heretofore or hereafter pledged by Borrower to LTS
(the “Collateral”), free of all security interests, liens or other encumbrances,
except LTS’s security interest therein and any other liens which have been approved
in writing by LTS, including any liens held by Amerisource Funding, Inc. |
| ii. | Has
the unconditional authority to grant LTS a security interest in the Collateral. |
| iii. | Will
not take or fail to take any action (specifically including but not limited to the suffering
of any federal tax lien) which will adversely affect the priority of LTS’s security
interest in the Collateral. |
| iv. | Will
not transfer the Collateral to any other person or entity, without the prior written consent
of LTS. |
Indemnitor
indemnifies LTS from any loss or damage, including any actual, consequential or incidental loss or damage, suffered by LTS
as a result of, or arising out of, the breach of any covenants, warranties or representations (in whole or part) made by Indemnitor
to LTS in this Agreement. Indemnitor further indemnifies LTS against, and agrees to reimburse LTS for, all costs
and expenses incurred (including reasonable attorneys’ fees) in the negotiation, preparation, administration and/or enforcement
of this Agreement.
Validity Guaranty | Page 1 of 2 |
Indemnitor
obligations hereunder shall not be affected by, and Indemnitor waives any and all claims and defenses arising out of, any of the following:
| ● | Any
failure to perfect or continue the perfection of any security interest in or other lien upon
any Collateral. |
| ● | The
invalidity, unenforceability, impropriety of manner of enforcement of, or loss or change
in priority of, any security interest or lien in the Collateral. |
| ● | The
failure to protect, preserve or insure any Collateral. |
| ● | Any
failure of the Indemnitor to receive notice of presentment, demand, protest, default, non-payment,
partial payment, any intended disposition of any of the Collateral, the acceptance of this
Agreement or the Credit Agreement, any extension of credit by LTS to Debtor,
and all other notices to which Indemnitor might be otherwise entitled. |
| ● | Any
failure, negligence or omission by LTS in enforcing LTS’s claims against
the Borrower or the Collateral. |
| ● | Any
amendment, release, settlement or compromise of the Obligations. |
| ● | Any
amendment, modification or termination of the Credit Agreement or related documents. |
| ● | The
invalidity or unenforceability of the Obligations. |
| ● | The
filing of an insolvency proceeding by or against Borrower. |
This
Agreement shall remain in full force and effect until the later to occur of termination of the Credit Agreement or repayment in full
of the Obligations.
In
the event of any litigation arising hereunder, the prevailing party shall recover its attorney’s fees and expenses from the unsuccessful
party. Any action arising hereunder may, at LTS’s election, be prosecuted in any court located in Illinois (the “Acceptable
Forums”). We agree that such forum is convenient to us, and we submit to such jurisdiction and waive any objections to jurisdiction
or venue. Should we commence an action in any other forum; we waive any right to oppose LTS’s motion or application to transfer
such proceeding to a court in the Acceptable Forums.
WE
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT WE MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. WE ACKNOWLEDGE THAT
THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO LTS IN EXTENDING CREDIT OR CONTINING TO EXTEND FINANCIAL ACCOMMODATIONS
TO THE BORROWER, THAT LTS WOULD NOT HAVE EXTENDED SUCH CREDIT OR FINANCIAL ACCOMMODATIONS WITHOUT THIS JURY TRIAL WAIVER,
AND THAT WE HAVE BEEN REPRESENTED BY AN ATTORNEY OR HAVE HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY
TRIAL WAIVER AND UNDERSTAND THE LEGAL EFFECT OF THIS WAIVER.
This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. Each party acknowledges that is has reviewed this Agreement, and the parties
hereby agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement. Delivery of this Agreement or an executed counterpart hereof shall be deemed
a good and valid execution and delivery hereof or thereof
Name: |
Steven Rossi |
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Address: |
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Sincerely, |
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STEVEN ROSSI, Individually |
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Validity Guaranty | Page 2 of 2 |
Exhibit
10.6
SECURITY
AGREEMENT
THIS
SECURITY AGREEMENT (this “Agreement”) is made and entered into as of ____________, by Worksport Ltd., a Nevada corporation
with its principal place of business and chief executive offices at 2500 N. America Drive, West Seneca, New York 14224 (“Debtor”),
in favor of Loeb Term Solutions LLC, an Illinois limited liability company, with an address at 8609 W. Bryn Mawr, Suite 208, Chicago,
IL 60631 (“Lender”).
In
consideration of and as an inducement to Lender making or continuing to make certain loans or financial accommodations (the “Loan”)
to Worksport USA Operations Corporation (“Borrower”), which loans have been or will be guaranteed by the Debtor
pursuant to that certain Guaranty from the Debtor to the Lender, as may have been or hereafter may be amended and/or
restated from time to time (the “Guaranty”), and to secure the payment and performance of the Guaranty and
of any and all other obligations and liabilities of Debtor and Borrower to Lender, whether arising in connection
with loans, advances, guarantees, purchases, acquisitions, or other extensions of credit made to or on behalf of Debtor, Borrower
or any other person for whom Debtor serves as surety or guarantor, and whether direct or indirect, absolute or contingent,
or now or hereafter existing, or due or to become due (collectively the “Obligations”), the parties hereto agree as
follows:
| 1. | Grant
of Security Interest. To secure the payment and performance of the Obligations,
Debtor hereby grants to Lender a security interest in all of Debtor’s
right, title and interest in and to the Collateral (defined below). |
| a. | All
capitalized terms not defined herein shall have the meaning given to such terms in the Uniform
Commercial Code (“UCC”) as in effect on the date hereof in the state of
Illinois, unless the context requires a different meaning. |
| b. | Debtor
previously authorized and hereby authorizes Lender to file one or more financing
statements, and amendments thereto, relating to all or any part of the Collateral in the
Debtor’s state of organization and in any other states or locations selected
by Lender. Lender may describe the Collateral as “all assets” of
Debtor or words of similar effect in such financing statements. |
| 3. | Definition
of Collateral. The Collateral is all of the Debtor’s now owned or existing
or hereafter acquired or arising: Accounts, Goods, Inventory, Equipment (including without
limitation the equipment described on Exhibit A attached hereto), Chattel Paper, Instruments,
Investment Property, specifically identified Commercial Tort Claims, Documents, Deposit Accounts,
Letter of Credit Rights, General Intangibles, Intellectual Property, Contract Rights, customer
lists, furniture and fixtures, books and records and supporting obligations for any of the
foregoing, and all Proceeds of the foregoing (the “Collateral”). The Collateral
also includes all monies on deposit or held in reserve with Lender. |
| 4. | Representations
and Covenants Relating to the Collateral. |
| a. | Ownership.
Debtor is the owner of the Collateral and shall at all times maintain valid
title to the Collateral. |
| b. | Lien
Priority. The security interest granted hereby shall at all times be a valid and perfected
first priority security interest, subject to the terms of any intercreditor agreement executed
by Lender, enforceable against Debtor and all third parties, securing the Obligations.
Debtor shall not permit any financing statement or other instruments similar in effect
covering all or any part of the Collateral to be filed or recorded unless subject
to an intercreditor agreement or subordination agreement executed by Lender, without
the prior written consent of Lender. Without limiting the foregoing, Debtor shall
not enter into any merchant cash advance loans or any other agreements or loans wherein Debtor
sells or assigns its accounts or future cash. |
| c. | Care
of Collateral. Debtor, at its own expense, will maintain, keep and preserve the
Collateral in the ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) and from time to time make or cause to be made all needed
and appropriate repairs, renewals, replacements, additions, betterments and improvements
thereto and will not waste or destroy the Collateral or any part thereof and will
not be negligent in the care and use of any Collateral and will not use any Collateral
in violation of applicable law. |
| d. | Disposition
of Collateral. Debtor shall not sell, lease, transfer, assign (by operation of
law or otherwise) or otherwise dispose of all or any part of the Collateral, except
for sales of Inventory, furniture, and fixtures in the ordinary course of business. |
| e. | Principal
place of business and Trade Names. Debtor represents, warrants and covenants that:
(i) Debtor’s principal place of business and the books and records relating
to the Collateral are located at Debtor’s principal place of business
specified above; (ii) Debtor has not, within the last five (5) years, transacted business
under any trade names other than those specified herein or otherwise provided to Lender
in writing, except Franchise Holdings International, Inc.; and (iii) Debtor will
not move its principal place of business or its books and records, or transact business under
any new trade names, without giving Lender (30) days prior written notice thereof
or without having taken all action required by Section 4.f. below with respect to any affected
Collateral. |
Security Agreement | 1 | P a g e |
| f. | Location
of Collateral. Debtor shall not permit the equipment, inventory or other tangible
Collateral to be located at any location except at the location specified in the existing
written Landlord Agreement executed by the landlord and Lender, unless: |
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| (i) | Debtor
gives Lender thirty (30) days prior written notice thereof; |
| (ii) | Prior
to the move, Debtor obtains from the landlord of the premises of the future location
an executed lease and provide a copy to Lender; |
| (iii) | Prior
to the move, Debtor obtains from the landlord of the premises of the future location
a Landlord Agreement, in form satisfactory to Lender and provides a copy to Lender; |
| (iv) | Prior
to the move, the machinery mover hired by Debtor names Lender as additional
insured, loss payee and Lender loss payee on its insurance policy and provides a copy
to Lender; |
| (v) | Debtor
has all of the previously installed equipment re-installed; |
| (vi) | Debtor
allows Lender to inspect the equipment at Debtor’s expense to confirm
that all previously installed equipment as shown on Exhibit A is re-installed and operating.
The reinspection fee will be pulled via ACH; and |
| (vii) | Within
ten (10) days of the completion of the move, Debtor notifies Lender of any
surplus equipment left from the move and develops with Lender a plan to sell the surplus. |
| 5. | Further
Assurances. Debtor agrees that it shall from time to time, and at its expense, promptly
execute and deliver all instruments, documents and assignments, and shall take all further
actions that Lender may request in order to perfect, protect and continue any security
interest granted or purported to be granted hereby or to enable Lender to exercise
and enforce its rights and remedies hereunder with respect to any Collateral, and
shall promptly give to the Lender evidence satisfactory to Lender of such action.
Without limiting the generality of the foregoing, Debtor shall: |
| a. | Take
such steps as Lender may request for Lender (i) to obtain an acknowledgment
of any bailee having possession of any of the Collateral that the bailee holds such
Collateral for the benefit Lender, or (ii) to obtain “control”
of any investment property, deposit accounts, letter-of-credit rights, electronic chattel
paper or other Collateral; |
| b. | Mark
conspicuously each document, Chattel Paper and Instrument, and at the request of Lender,
each of its records pertaining to the Collateral, with a legend in form and substance
satisfactory to Lender indicating that such document, Chattel Paper, Instrument or
other Collateral is subject to the security interest granted hereby; |
| c. | Upon
the request of the Lender, deliver to Lender any original note, Instrument,
Chattel Paper, Instrument or other document evidencing any Collateral and any certificate
or instrument evidencing any Security, duly endorsed and accompanied by duly executed instruments
of transfer or assignment, all in forms and substance satisfactory to Lender; |
| d. | Deliver
original certificates of title and execute all documentation in order to reflect Lender’s
security interest on titled motor vehicles and vessels; |
| e. | furnish
to Lender from time to time statements and schedules identifying and describing the
Collateral and such other reports and information concerning the Collateral
as Lender may request in its sole discretion; and |
| f. | Not
store, keep or maintain any Collateral at any location other than locations where
there is a landlord waiver and/or a mortgagee waiver in favor of Lender, and in forms
acceptable to Lender. |
| 6. | Insurance.
Debtor at all times should have the Collateral insured in the Debtor’s
or Borrower’s name against loss or damage by fire, theft, burglary, pilferage, loss
in transit and such other hazards with amounts, under policies and by insurers acceptable
to Lender. Each policy shall include a provision for Lender to receive copies
directly from the insurance agent of all written notices to policy holder including, but
not limited to any invoices, statements of account, certificates of insurance, cancellation
or substantial modification. Policies shall show Lender as additional insured, loss
payee and Lender’s loss payee in a manner acceptable to Lender. Debtor
shall execute and deliver to Lender simultaneously herewith and at any other time
hereafter such assignments of policies of insurance as Lender shall reasonably require.
All premiums shall be paid by Debtor, and a copy of the policies and certificate of
insurance shall be delivered to Lender. If Debtor fails to do so, Lender
may (but shall not be required to) procure such insurance at the Debtor’s
expense. DEBTOR ALSO GRANTS PERMISSION FOR LENDER TO SPEAK DIRECTLY WITH DEBTOR’S
INSURANCE AGENT AS REQUIRED TO CONFIRM PROPER INSURANCE IS IN PLACE AND IS CURRENT. |
| 7. | Inspection;
Books, Records and Financial Statements and Reports. |
| a. | Debtor
shall at all times keep accurate and complete records of the Collateral, and,
at Debtor’s expense, at a reasonable time, permit Lender to inspect the
Collateral, and inspect and make extracts from and copies of its books and all records,
including preventative maintenance records relating to the Collateral. |
| b. | Debtor
shall at all times keep, and if requested provide Lender with copies of or allow
Lender to inspect, monthly financial records prepared in accordance with generally
accepted accounting principles and which, to the knowledge of the Debtor, are true and accurate
in all material respects, including an income statement, balance sheet, statement of cash
flows, accounts payable agings, accounts receivable agings, inventory reports and payroll
reports. |
Security Agreement | 2 | P a g e |
| c. | Lender
shall be permitted to discuss with Debtor’s owners, directors, officers,
managers and auditors Debtor’s business, procedures, assets, liabilities, financial
positions, results of operations and business prospects. |
| d. | Debtor
shall keep its records concerning the Collateral and other business records at
its principal place of business or at such other location as shall have been approved by
Lender. |
| e. | The
Lender shall have the right to have the Equipment appraised or inspected on an annual
basis. At every annual appraisal or inspection the Loan balance shall not exceed 80%
of the net fair liquidation value of the Equipment (the “Equipment Cap”), and
if the Loan balance exceeds Equipment Cap the Debtor shall make a Loan payment to
be in compliance with the Equipment Cap within sixty (60) days of notice. If the Loan
does not close within forty-five (45) days of the initial inspection, Lender may
perform a reinspection of the Collateral at the Debtor’s expense. After
the occurrence of a Default, there shall be no limit on the number of appraisals and inspections,
and Debtor shall reimburse Lender for costs related to such appraisals or inspections.
Prior to the occurrence of a Default, Lender will give Debtor seventy-two (72)
hours prior notice, and the inspection will only be during normal business hours. Debtor
authorizes Lender to debit the amount of the Appraisal Expense (as defined below)
from Debtor’s bank account via ACH transfer as more fully set forth in the ACH
Authorization Agreement. |
| f. | The
cost of all inspections and actions under this Section shall be borne by the Debtor. |
| 8. | Taxes.
Debtor shall promptly pay when due all property, payroll and any other taxes, assessments
and governmental charges or levies imposed upon the Collateral, except to the extent
the validity thereof is being contested in good faith by Debtor and with reserves
for payment of such charges or levies in any amount satisfactory to Lender. Lender
reserves the right to require Debtor to use an independent payroll service if
Debtor is delinquent in paying their payroll taxes on time. |
| 9. | Lender’s
Duties and Powers. If Debtor fails to perform any covenant or agreement contained
herein after any applicable cure and notice period, Lender may (but shall not be obligated
to) perform, or cause performance of, such covenant or agreement at the Debtor’s
expense. The powers conferred on Lender hereunder are to protect Lender’s
interest in the Collateral and shall not impose any duty upon Lender to exercise
any such powers. |
| 10. | Loans,
Dividends or other Distributions to Equity Owners. Debtor covenants and agrees that
until all Obligations to Lender are paid in full, it will not declare or pay
any dividend or make any other distribution or loan of any kind to its shareholders, members
or other equity owners, other than: |
| a. | Normal
salary, or guaranteed distributions in lieu of salary, paid to an equity owner that is also
an employee of Debtor; and |
| b. | With
respect to any year in which Debtor is not taxed by the Internal Revenue Services
as a “C” corporation, and provided that Debtor is not in Default at that
time of such payment, Debtor may make a distribution of profits to its equity owners
in an amount not to exceed the sum necessary to enable its equity owners to pay their personal
state and federal taxes directly attributable to the profits earned by Debtor for
the applicable year. |
| a. | Debtor
shall upon demand pay to Lender the amount of any and all expenses, including
without limitation, the reasonable fees and disbursements of Lender’s counsel
and of any experts and agents, which Lender may incur in connection with the preparation,
administration and enforcement of this Agreement, or the sale, collection from, or other
realization upon any of the Collateral. |
| 12. | Default.
Each of the following shall constitute an event of default under this Agreement (a “Default”): |
| a. | Borrower
or Debtor fails to pay any amounts owing to Lender, including but not limited
to the Obligations, when due, provided, however, weekly payments under the Loan Documents
shall have a forty-eight hour grace period for bank payment processing issues out of Borrower
or Debtor’s control; |
| b. | Debtor
fails to observe or perform any of the terms, covenants or conditions contained in this
Agreement, the Guaranty or any other contract, instrument or agreement with Lender
after 30 days’ written notice; |
| c. | Borrower
fails to observe or perform any of the terms, covenants or conditions contained in any
contract, instrument or agreement with Lender after 30 days’ written notice; |
| d. | Any
representation or warranty made by Debtor herein is false in any material respect
as of the time when made or given; |
| e. | Debtor
shall make an assignment for the benefit of creditors, file a petition in bankruptcy,
petition or apply for the appointment of a custodian, receiver or any trustee for Debtor
or the Collateral, or shall commence any proceedings under any bankruptcy, reorganization,
arrangement, readjustment of debt (other than a refinance of any active loans as of the effective
date herein), dissolution or liquidation law or statue of any jurisdiction, whether now or
hereafter in effect, or if there shall have been filed any such petition or application,
or any such proceeding shall have been commenced against Debtor, in which an order
for relief is entered and is not dismissed within sixty (60) days; |
Security Agreement | 3 | P a g e |
| f. | Any
suit is filed against Debtor and not disclosed to Lender within thirty (30)
days; |
| g. | Any
judgment is entered against Debtor in excess of $100,000.00 USD; |
| h. | Any
of the Collateral is taken or sought to be taken by levy, execution or other process
of law; |
| i. | Debtor
or Borrower liquidates, dissolves, or merges into or consolidates with or into
any other entity; |
| j. | Any
financial statement or report provided by Debtor or Borrower to Lender
is false in any material respect as of the time when made or given; or |
| k. | Any
circumstance or event of any nature which in Lender’s sole reasonable discretion
may materially and adversely affect the condition, operation, business or assets of Debtor
or materially impairs the ability of Debtor to fulfill its Obligations
to Lender. |
| 13. | Remedies.
Upon and event of Default, Lender shall have the following remedies which
may be exercised cumulatively: |
| a. | To
declare all Obligations immediately due and payable; |
| b. | To
exercise any and all rights and remedies provided under this Agreement, the UCC, in
law or at equity, including the right to obtain an injunction against Debtor or a
decree of specific performance; |
| c. | To
immediately apply to any court of competent jurisdiction for, and obtain appointment of,
a receiver for the Collateral, the Debtor and/or the Debtor’s
business, all without posting a bond. Debtor consents to any such appointment and
agrees not to contest any such motion or appointment; |
| d. | Without
prior demand or notice, to set-off against and apply any accounts, items and monies in the
possession of Lender or payable by Lender to Debtor to the Obligations; |
| e. | With
or without judicial process or the aid or assistance of others, to enter upon any premises
in which Collateral may be located and, without resistance or interference by Debtor,
to take physical possession of any items of Collateral and to maintain such possession
on Debtor’s premises or move the same or any part thereof to such other places
as Lender shall choose without being liable to Debtor on account of any losses,
damage or depreciation that may occur, and may dispose of all or any part of the Collateral
on any premises of Debtor, require Debtor to assemble and make available
to Lender or to remove all or any part of the Collateral from any premises
in which any part may be located for the purpose of effecting sale or other disposition thereof;
and |
| f. | To
sell any item of the Collateral for cash or other value in any number of lots at a
public or private sale without demand or notice (excepting only that, unless the Collateral
is perishable or threatens to decline speedily in value or is of a type customarily sold
on a recognized market, Lender shall give Debtor ten (10) days prior written
notice of the time and place of any public sale, or the time after which a private sale may
be made, which notice Debtor agrees is reasonable). At any public sale Lender
may bid for and purchase the whole or any part of the property and rights sold and upon compliance
with the terms of such sale may hold or dispose of such property and rights without further
accountability to Debtor. Debtor will execute and deliver, or cause to be executed
and delivered, such instruments, documents, registration statements, assignments, waivers,
certificates and affidavits, and will supply or cause to be supplied such further information
and take such further action as Lender shall require in connection with such sales.
Debtor shall be responsible for all costs of sale or other disposition of the Collateral.
The proceeds of all sales and collections hereunder shall be applied against the Obligations
in such order as Lender shall elect in its sole discretion. |
Failure
to exercise any and all rights or remedies Lender may have in the event of any event of Default shall not constitute a
waiver of the right to exercise such rights or remedies in the event of any subsequent event of Default, whether of the same or
different nature. No waiver of any right or remedy by Lender shall be effective unless made in writing and signed by Lender,
nor shall any waiver on one occasion apply to any future occasion.
| 14. | Power
of Attorney: Debtor irrevocably appoints Lender, or any person(s) designated
by Lender, as its attorney-in-fact, which appointment is coupled with an interest
and shall remain in full force and effect until all Obligations have been fully and indefeasibly
satisfied and discharged, with full power, at Debtor’s sole expense, to perform
any and all such acts which Lender deems advisable in its sole and absolute discretion
after an Event of Default to carry out the purposes and intent of this Agreement,
including signing the Debtor’s name to any certificate of title, bill of sale or other
document. |
| 15. | Waivers.
Debtor hereby waives (a) any requirement for Lender to marshal the Collateral
or to resort to the Collateral in any particular order, (b) the right to extend
or excuse performance of any of Debtor’s Obligations based on force majeure,
and (c) to the extent permitted by applicable law, the benefits and advantages of any valuation,
stay, appraisement, extension or redemption laws now or hereafter existing which, but for
this provision, might be applicable. |
| 16. | Discharge
and Payoff. In recognition of the Lender’s right to have its reasonable
attorneys’ fees and other expenses incurred in connection with this Agreement
secured by the Collateral, notwithstanding payment in full of all Obligations
by Debtor, Lender shall not be required to file terminations or satisfactions
of any of Lender’s liens on the Collateral unless and until Debtor
shall have provided a general release in favor of Lender, in form satisfactory
to Lender. Debtor understands that this provision constitutes a waiver of its
rights under Section 9-513 of the Uniform Commercial Code. |
Security Agreement | 4 | P a g e |
| 17. | No
Waiver; Cumulative Remedies. No failure on the part of Lender to exercise,
and no delay on the part of Lender in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by Lender preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive
of any other remedies that may be available to Lender, whether at law, in equity or
otherwise. No course of dealing between Debtor and Lender shall operate as
a waiver of any rights of Lender under this Agreement or in respect of the Collateral
or the Obligations. |
| 18. | Indemnity.
Debtor assumes liability for and does hereby agree to indemnify, protect, save and keep
harmless Lender and its agents, from and against any and all liabilities, claims,
losses, obligations, damages, penalties, actions, and suites of whatsoever kind and nature
imposed on, incurred by or asserted against Lender or its agents, in any way relating
to or growing out of this Agreement, the Guaranty or the Collateral (including
without limitation, enforcement of this Agreement and the Guaranty or disposition
of the Collateral), except claims, losses or liabilities resulting solely from Lender’s
gross negligence or willful misconduct. |
| 19. | Miscellaneous.
The invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof. Neither this Agreement
nor any term hereof may be amended orally, nor may any provision hereof be waived orally
but only by an instrument in writing signed by Lender and, in the case of an amendment,
by Debtor and any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. This Agreement shall be governed by
and construed in accordance with the law of the State of Illinois, except as required by
mandatory provisions of law and except to the extent that the validity or perfection of the
security interest hereunder in respect of any particular Collateral are governed by
the law of a jurisdiction other than the State of Illinois. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an original,
but all such separate counterparts shall together constitute but one and the same instrument.
Each party acknowledges that is has reviewed this Agreement, and the parties hereby agree
that the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this Agreement. |
| 20. | Assignments.
This Agreement shall bind the parties hereto and their respective successors and
assigns. This Agreement and the Guaranty may be assigned by Lender to
a third party, and the Debtor consents to such assignment and agrees that this Agreement
and the Guaranty will be in favor of the assignee(s) upon assignment, without
any defenses, counterclaims or setoffs of any kind whatsoever. All of the terms of this Agreement
and the Guaranty shall inure to the benefit of Lender and its successors
and assigns and shall be binding upon Debtor and its heirs, executors, administrators,
personal representatives, successors and assigns. Lender may grant participations
in all or any portion of and may assign all or any part of Lender’s rights under,
this Agreement and the Guaranty. Lender may disclose to any such participant
or assignee any and all information held by or known to Lender at any time with respect
to Debtor. |
| 21. | Notices.
All notices and other communications under this Agreement shall be in writing
and shall be deemed to have been given three (3) business days after deposit in the mail,
designated as certified mail, return receipt requested, postage-prepaid, one (1) business
day after being entrusted to a reputable commercial overnight delivery service, addressed
to the party to whom such notice is directed at its address as forth above, or upon sending
if sent via electronic mail. Any party hereto may change the address to which notices shall
be directed under this Paragraph by giving three (3) business days written notice of such
change to the other parties. |
|
|
If
to Lender, then to: |
|
|
|
|
Lender: |
Loeb
Term Solutions LLC |
|
|
|
Attention: |
Howard
M. Newman |
|
|
|
Address: |
8609
W. Bryn Mawr, Suite 208 |
|
|
|
Phone: |
|
|
|
|
Email: |
|
|
|
|
Carbon
copy: |
|
|
|
|
Email
address: |
|
|
|
If
to Debtor, then to: |
|
|
|
|
Debtor: |
Worksport
Ltd. |
|
|
|
Attention: |
Steven
Rossi |
|
|
|
Address: |
2500
N. America Drive |
|
|
|
|
West
Seneca, New York 14224 |
|
|
|
Phone: |
|
|
|
|
Email: |
|
Security Agreement | 5 | P a g e |
| 22. | WAIVER
OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT THEY OR ANY OTHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED
ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED
TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER OR ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. |
| 23. | JURISDICTION.
THE PARTIES AGREE THAT ANY ACTION TO ENFORCE DEBTOR’S OBLIGATIONS TO LENDER
OR ANY ACTION RELATING TO OR ARISING OUT OF THE LOAN OR THIS AGREEMENT
SHALL BE PROSECUTED EITHER IN THE CIRCUIT COURT OF COOK COUNTY ILLINOIS OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, AND DEBTOR SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT. DEBTOR WAIVES ANY AND ALL RIGHTS TO CONTEST THE JURISDICTION AND
VENUE OF ANY ACTION BROUGHT IN THIS MATTER AND DEBTOR MAY BRING ANY ACTION AGAINST LENDER
ONLY IN THE CIRCUIT COURT FOR THE COUNTY OF COOK OR THE FEDERAL COURT OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS. |
| 24. | Electronic
Signatures: THIS AGREEMENT AND THE GUARANTY MAY BE SIGNED AND/OR TRANSMITTED BY FACSIMILE,
E-MAIL OF A .PDF DOCUMENT OR USING ELECTRONIC SIGNATURE TECHNOLOGY (E.G., VIA DOCUSIGN OR
SIMILAR ELECTRONIC SIGNATURE TECHNOLOGY), AND THAT SUCH SIGNED ELECTRONIC RECORD SHALL BE
VALID AND AS EFFECTIVE TO BIND THE PARTY SO SIGNING AS A PAPER COPY BEARING SUCH PARTY’S
HAND-WRITTEN SIGNATURE. THE PARTIES FURTHER CONSENT AND AGREE THAT (a) TO THE EXTENT A PARTY
SIGNS THIS AGREEMENT OR THE GUARANTY USING ELECTRONIC SIGNATURE TECHNOLOGY, BY CLICKING “SIGN”,
SUCH PARTY IS SIGNING THIS AGREEMENT OR THE GUARANTY ELECTRONICALLY, AND (b) THE ELECTRONIC
SIGNATURES APPEARING ON THIS AGREEMENT OR THE GUARANTY SHALL BE TREATED, FOR PURPOSES OF
VALIDITY, ENFORCEABILITY AND ADMISSIBILITY, THE SAME AS HAND-WRITTEN SIGNATURES. |
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
DEBTOR: |
|
|
|
|
Worksport
Ltd. |
|
|
|
|
Signature: |
|
|
Print
Name: |
Steven
Rossi |
|
Title: |
CEO |
|
LENDER: |
|
|
|
|
Loeb
Term Solutions LLC |
|
|
|
|
Signature: |
|
|
Print
Name: |
Howard
M. Newman |
|
Title: |
Manager |
|
Security Agreement | 6 | P a g e |
EXHIBIT
A
(NON-EXCLUSIVE
EQUIPMENT LIST)
Security Agreement | 7 | P a g e |
Exhibit
10.7
SECURITY
AGREEMENT
THIS
SECURITY AGREEMENT (this “Agreement”) is made and entered into as of ____________, by Worksport New York Operations Corporation,
a New York corporation with its principal place of business and chief executive offices at 2500 N. America Drive, West Seneca, New York
14224 (“Debtor”), in favor of Loeb Term Solutions LLC, an Illinois limited liability company, with an address
at 8609 W. Bryn Mawr, Suite 208, Chicago, IL 60631 (“Lender”).
In
consideration of and as an inducement to Lender making or continuing to make certain loans or financial accommodations (the “Loan”)
to Worksport USA Operations Corporation (“Borrower”), which loans have been or will be guaranteed by the Debtor
pursuant to that certain Guaranty from the Debtor to the Lender, as may have been or hereafter may be amended and/or
restated from time to time (the “Guaranty”), and to secure the payment and performance of the Guaranty and
of any and all other obligations and liabilities of Debtor and Borrower to Lender, whether arising in connection
with loans, advances, guarantees, purchases, acquisitions, or other extensions of credit made to or on behalf of Debtor, Borrower
or any other person for whom Debtor serves as surety or guarantor, and whether direct or indirect, absolute or contingent,
or now or hereafter existing, or due or to become due (collectively the “Obligations”), the parties hereto agree as
follows:
| 1. | Grant
of Security Interest. To secure the payment and performance of the Obligations,
Debtor hereby grants to Lender a security interest in all of Debtor’s
right, title and interest in and to the Collateral (defined below). |
| a. | All
capitalized terms not defined herein shall have the meaning given to such terms in the Uniform
Commercial Code (“UCC”) as in effect on the date hereof in the state of
Illinois, unless the context requires a different meaning. |
| b. | Debtor
previously authorized and hereby authorizes Lender to file one or more financing
statements, and amendments thereto, relating to all or any part of the Collateral in the
Debtor’s state of organization and in any other states or locations selected
by Lender. Lender may describe the Collateral as “all assets” of
Debtor or words of similar effect in such financing statements. |
| 3. | Definition
of Collateral. The Collateral is all of the Debtor’s now owned or existing
or hereafter acquired or arising: Accounts, Goods, Inventory, Equipment (including without
limitation the equipment described on Exhibit A attached hereto), Chattel Paper, Instruments,
Investment Property, specifically identified Commercial Tort Claims, Documents, Deposit Accounts,
Letter of Credit Rights, General Intangibles, Intellectual Property, Contract Rights, customer
lists, furniture and fixtures, books and records and supporting obligations for any of the
foregoing, and all Proceeds of the foregoing (the “Collateral”). The Collateral
also includes all monies on deposit or held in reserve with Lender. |
| 4. | Representations
and Covenants Relating to the Collateral. |
| a. | Ownership.
Debtor is the owner of the Collateral and shall at all times maintain valid
title to the Collateral. |
| b. | Lien
Priority. The security interest granted hereby shall at all times be a valid and perfected
first priority security interest, subject to the terms of any intercreditor agreement executed
by Lender, enforceable against Debtor and all third parties, securing the Obligations.
Debtor shall not permit any financing statement or other instruments similar in effect
covering all or any part of the Collateral to be filed or recorded unless subject
to an intercreditor agreement or subordination agreement executed by Lender, without the
prior written consent of Lender. Without limiting the foregoing, Debtor shall not
enter into any merchant cash advance loans or any other agreements or loans wherein Debtor
sells or assigns its accounts or future cash. |
| c. | Care
of Collateral. Debtor, at its own expense, will maintain, keep and preserve the
Collateral in the ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) and from time to time make or cause to be made all needed
and appropriate repairs, renewals, replacements, additions, betterments and improvements
thereto and will not waste or destroy the Collateral or any part thereof and will
not be negligent in the care and use of any Collateral and will not use any Collateral
in violation of applicable law. |
| d. | Disposition
of Collateral. Debtor shall not sell, lease, transfer, assign (by operation of
law or otherwise) or otherwise dispose of all or any part of the Collateral, except
for sales of Inventory, furniture, and fixtures in the ordinary course of business. |
| e. | Principal
place of business and Trade Names. Debtor represents, warrants and covenants that:
(i) Debtor’s principal place of business and the books and records relating
to the Collateral are located at Debtor’s principal place of business
specified above; (ii) Debtor has not, within the last five (5) years, transacted business
under any trade names other than those specified herein or otherwise provided to Lender
in writing; and (iii) Debtor will not move its principal place of business or
its books and records, or transact business under any new trade names, without giving Lender
(30) days prior written notice thereof or without having taken all action required by
Section 4.f. below with respect to any affected Collateral. |
Security Agreement | 1 | P a g
e |
| f. | Location
of Collateral. Debtor shall not permit the equipment, inventory or other tangible
Collateral to be located at any location except at the location specified in the existing
written Landlord Agreement executed by the landlord and Lender, unless: |
| (i) | Debtor
gives Lender thirty (30) days prior written notice thereof; |
| (ii) | Prior
to the move, Debtor obtains from the landlord of the premises of the future location
an executed lease and provide a copy to Lender; |
| (iii) | Prior
to the move, Debtor obtains from the landlord of the premises of the future location
a Landlord Agreement, in form satisfactory to Lender and provides a copy to Lender; |
| (iv) | Prior
to the move, the machinery mover hired by Debtor names Lender as additional
insured, loss payee and Lender loss payee on its insurance policy and provides a copy
to Lender; |
| (v) | Debtor
has all of the previously installed equipment re-installed; |
| (vi) | Debtor
allows Lender to inspect the equipment at Debtor’s expense to confirm
that all previously installed equipment as shown on Exhibit A is re-installed and operating.
The reinspection fee will be pulled via ACH; and |
| (vii) | Within
ten (10) days of the completion of the move, Debtor notifies Lender of any
surplus equipment left from the move and develops with Lender a plan to sell the surplus. |
| 5. | Further
Assurances. Debtor agrees that it shall from time to time, and at its expense, promptly
execute and deliver all instruments, documents and assignments, and shall take all further
actions that Lender may request in order to perfect, protect and continue any security
interest granted or purported to be granted hereby or to enable Lender to exercise
and enforce its rights and remedies hereunder with respect to any Collateral, and
shall promptly give to the Lender evidence satisfactory to Lender of such action.
Without limiting the generality of the foregoing, Debtor shall: |
| a. | Take
such steps as Lender may request for Lender (i) to obtain an acknowledgment
of any bailee having possession of any of the Collateral that the bailee holds such
Collateral for the benefit Lender, or (ii) to obtain “control”
of any investment property, deposit accounts, letter-of-credit rights, electronic chattel
paper or other Collateral; |
| b. | Mark
conspicuously each document, Chattel Paper and Instrument, and at the request of Lender,
each of its records pertaining to the Collateral, with a legend in form and substance
satisfactory to Lender indicating that such document, Chattel Paper, Instrument or
other Collateral is subject to the security interest granted hereby; |
| c. | Upon
the request of the Lender, deliver to Lender any original note, Instrument,
Chattel Paper, Instrument or other document evidencing any Collateral and any certificate
or instrument evidencing any Security, duly endorsed and accompanied by duly executed instruments
of transfer or assignment, all in forms and substance satisfactory to Lender; |
| d. | Deliver
original certificates of title and execute all documentation in order to reflect Lender’s
security interest on titled motor vehicles and vessels; |
| e. | furnish
to Lender from time to time statements and schedules identifying and describing the
Collateral and such other reports and information concerning the Collateral
as Lender may request in its sole discretion; and |
| f. | Not
store, keep or maintain any Collateral at any location other than locations where
there is a landlord waiver and/or a mortgagee waiver in favor of Lender, and in forms
acceptable to Lender. |
| 6. | Insurance.
Debtor at all times should have the Collateral insured in the Debtor’s
or Borrower’s name against loss or damage by fire, theft, burglary, pilferage,
loss in transit and such other hazards with amounts, under policies and by insurers acceptable
to Lender. Each policy shall include a provision for Lender to receive copies
directly from the insurance agent of all written notices to policy holder including, but
not limited to any invoices, statements of account, certificates of insurance, cancellation
or substantial modification. Policies shall show Lender as additional insured, loss
payee and Lender’s loss payee in a manner acceptable to Lender. Debtor
shall execute and deliver to Lender simultaneously herewith and at any other time
hereafter such assignments of policies of insurance as Lender shall reasonably require.
All premiums shall be paid by Debtor, and a copy of the policies and certificate of
insurance shall be delivered to Lender. If Debtor fails to do so, Lender
may (but shall not be required to) procure such insurance at the Debtor’s
expense. DEBTOR ALSO GRANTS PERMISSION FOR LENDER TO SPEAK DIRECTLY WITH DEBTOR’S
INSURANCE AGENT AS REQUIRED TO CONFIRM PROPER INSURANCE IS IN PLACE AND IT IS CURRENT. |
| 7. | Inspection;
Books, Records and Financial Statements and Reports. |
| a. | Debtor
shall at all times keep accurate and complete records of the Collateral, and,
at Debtor’s expense, at a reasonable time, permit Lender to inspect the
Collateral, and inspect and make extracts from and copies of its books and all records,
including preventative maintenance records relating to the Collateral. |
| b. | Debtor
shall at all times keep, and if requested provide Lender with copies of or allow
Lender to inspect, monthly financial records prepared in accordance with generally
accepted accounting principles and which , to the knowledge of the Debtor, are true
and accurate in all material respects, including an income statement, balance sheet, statement
of cash flows, accounts payable agings, accounts receivable agings, inventory reports and
payroll reports. |
Security Agreement | 2 | P a g
e |
| c. | Lender
shall be permitted to discuss with Debtor’s owners, directors, officers,
managers and auditors Debtor’s business, procedures, assets, liabilities, financial
positions, results of operations and business prospects. |
| d. | Debtor
shall keep its records concerning the Collateral and other business records at
its principal place of business or at such other location as shall have been approved by
Lender. |
| e. | The
Lender shall have the right to have the Equipment appraised or inspected on an annual
basis. At every annual appraisal or inspection the Loan balance shall not exceed 80%
of the net fair liquidation value of the Equipment (the “Equipment Cap”), and
if the Loan balance exceeds Equipment Cap the Debtor shall make a Loan payment to
be in compliance with the Equipment Cap within sixty (60) days of notice. If the Loan
does not close within forty-five (45) days of the initial inspection, Lender may
perform a reinspection of the Collateral at the Debtor’s expense. After
the occurrence of a Default, there shall be no limit on the number of appraisals and inspections,
and Debtor shall reimburse Lender for costs related to such appraisals or inspections.
Prior to the occurrence of a Default, Lender will give Debtor seventy-two (72)
hours prior notice and the inspection will only be during normal business hours. Debtor
authorizes Lender to debit the amount of the Appraisal Expense (as defined below)
from Debtor’s bank account via ACH transfer as more fully set forth in the ACH
Authorization Agreement. |
| f. | The
cost of all inspections and actions under this Section shall be borne by the Debtor. |
| 8. | Taxes.
Debtor shall promptly pay when due all property, payroll and any other taxes, assessments
and governmental charges or levies imposed upon the Collateral, except to the extent
the validity thereof is being contested in good faith by Debtor and with reserves
for payment of such charges or levies in any amount satisfactory to Lender. Lender
reserves the right to require Debtor to use an independent payroll service if
Debtor is delinquent in paying their payroll taxes on time. |
| 9. | Lender’s
Duties and Powers. If Debtor fails to perform any covenant or agreement contained
herein after any applicable cure and notice period, Lender may (but shall not be obligated
to) perform, or cause performance of, such covenant or agreement at the Debtor’s
expense. The powers conferred on Lender hereunder are to protect Lender’s
interest in the Collateral and shall not impose any duty upon Lender to exercise
any such powers. |
| 10. | Loans,
Dividends or other Distributions to Equity Owners. Debtor covenants and agrees that
until all Obligations to Lender are paid in full, it will not declare or pay
any dividend or make any other distribution or loan of any kind to its shareholders, members
or other equity owners, other than: |
| a. | Normal
salary, or guaranteed distributions in lieu of salary, paid to an equity owner that is also
an employee of Debtor; and |
| b. | With
respect to any year in which Debtor is not taxed by the Internal Revenue Services
as a “C” corporation, and provided that Debtor is not in Default at that
time of such payment, Debtor may make a distribution of profits to its equity owners
in an amount not to exceed the sum necessary to enable its equity owners to pay their personal
state and federal taxes directly attributable to the profits earned by Debtor for
the applicable year. |
| a. | Debtor
shall upon demand pay to Lender the amount of any and all expenses, including
without limitation, the reasonable fees and disbursements of Lender’s counsel
and of any experts and agents, which Lender may incur in connection with the preparation,
administration and enforcement of this Agreement, or the sale, collection from, or other
realization upon any of the Collateral. |
| 12. | Default.
Each of the following shall constitute an event of default under this Agreement (a “Default”): |
| a. | Borrower
or Debtor fails to pay any amounts owing to Lender, including but not limited
to the Obligations, when due, provided, however, weekly payments under the Loan Documents
shall have a forty-eight hour grace period for bank payment processing issues out of Borrower
or Debtor’s control; |
| b. | Debtor
fails to observe or perform any of the terms, covenants or conditions contained in this
Agreement, the Guaranty or any other contract, instrument or agreement with Lender
after 30 days’ written notice; |
| c. | Borrower
fails to observe or perform any of the terms, covenants or conditions contained in any
contract, instrument or agreement with Lender after 30 days’ written notice; |
| d. | Any
representation or warranty made by Debtor herein is false in any material respect
as of the time when made or given; |
| e. | Debtor
shall make an assignment for the benefit of creditors, file a petition in bankruptcy,
petition or apply for the appointment of a custodian, receiver or any trustee for Debtor
or the Collateral, or shall commence any proceedings under any bankruptcy, reorganization,
arrangement, readjustment of debt (other than a refinance of any active loans as of the effective
date herein), dissolution or liquidation law or statue of any jurisdiction, whether now or
hereafter in effect, or if there shall have been filed any such petition or application,
or any such proceeding shall have been commenced against Debtor, in which an order
for relief is entered and is not dismissed within sixty (60) days; |
Security Agreement | 3 | P a g
e |
| f. | Any
suit is filed against Debtor and not disclosed to Lender within thirty (30)
days; |
| g. | Any
judgment is entered against Debtor in excess of $100,000.00 USD; |
| h. | Any
of the Collateral is taken or sought to be taken by levy, execution or other process
of law; |
| i. | Debtor
or Borrower liquidates, dissolves, or merges into or consolidates with or into
any other entity; |
| j. | Any
financial statement or report provided by Debtor or Borrower to Lender
is false in any material respect as of the time when made or given; or |
| k. | Any
circumstance or event of any nature which in Lender’s sole reasonable discretion
may materially and adversely affect the condition, operation, business or assets of Debtor
or materially impairs the ability of Debtor to fulfill its Obligations
to Lender. |
| 13. | Remedies.
Upon and event of Default, Lender shall have the following remedies which
may be exercised cumulatively: |
| a. | To
declare all Obligations immediately due and payable; |
| b. | To
exercise any and all rights and remedies provided under this Agreement, the UCC, in
law or at equity, including the right to obtain an injunction against Debtor or a
decree of specific performance; |
| c. | To
immediately apply to any court of competent jurisdiction for, and obtain appointment of,
a receiver for the Collateral, the Debtor and/or the Debtor’s
business, all without posting a bond. Debtor consents to any such appointment and
agrees not to contest any such motion or appointment; |
| d. | Without
prior demand or notice, to set-off against and apply any accounts, items and monies in the
possession of Lender or payable by Lender to Debtor to the Obligations; |
| e. | With
or without judicial process or the aid or assistance of others, to enter upon any premises
in which Collateral may be located and, without resistance or interference by Debtor,
to take physical possession of any items of Collateral and to maintain such possession
on Debtor’s premises or move the same or any part thereof to such other places
as Lender shall choose without being liable to Debtor on account of any losses,
damage or depreciation that may occur, and may dispose of all or any part of the Collateral
on any premises of Debtor, require Debtor to assemble and make available
to Lender or to remove all or any part of the Collateral from any premises
in which any part may be located for the purpose of effecting sale or other disposition thereof;
and |
| f. | To
sell any item of the Collateral for cash or other value in any number of lots at a
public or private sale without demand or notice (excepting only that, unless the Collateral
is perishable or threatens to decline speedily in value or is of a type customarily sold
on a recognized market, Lender shall give Debtor ten (10) days prior written
notice of the time and place of any public sale, or the time after which a private sale may
be made, which notice Debtor agrees is reasonable). At any public sale Lender
may bid for and purchase the whole or any part of the property and rights sold and upon compliance
with the terms of such sale may hold or dispose of such property and rights without further
accountability to Debtor. Debtor will execute and deliver, or cause to be executed
and delivered, such instruments, documents, registration statements, assignments, waivers,
certificates and affidavits, and will supply or cause to be supplied such further information
and take such further action as Lender shall require in connection with such sales.
Debtor shall be responsible for all costs of sale or other disposition of the Collateral.
The proceeds of all sales and collections hereunder shall be applied against the Obligations
in such order as Lender shall elect in its sole discretion. |
Failure
to exercise any and all rights or remedies Lender may have in the event of any event of Default shall not constitute a
waiver of the right to exercise such rights or remedies in the event of any subsequent event of Default, whether of the same or
different nature. No waiver of any right or remedy by Lender shall be effective unless made in writing and signed by Lender,
nor shall any waiver on one occasion apply to any future occasion.
| 14. | Power
of Attorney: Debtor irrevocably appoints Lender, or any person(s) designated
by Lender, as its attorney-in-fact, which appointment is coupled with an interest
and shall remain in full force and effect until all Obligations have been fully and indefeasibly
satisfied and discharged, with full power, at Debtor’s sole expense, to perform
any and all such acts which Lender deems advisable in its sole and absolute discretion
after an Event of Default to carry out the purposes and intent of this Agreement,
including signing the Debtor’s name to any certificate of title, bill of sale or other
document. |
| 15. | Waivers.
Debtor hereby waives (a) any requirement for Lender to marshal the Collateral
or to resort to the Collateral in any particular order, (b) the right to extend
or excuse performance of any of Debtor’s Obligations based on force majeure,
and (c) to the extent permitted by applicable law, the benefits and advantages of any valuation,
stay, appraisement, extension or redemption laws now or hereafter existing which, but for
this provision, might be applicable. |
| 16. | Discharge
and Payoff. In recognition of the Lender’s right to have its reasonable
attorneys’ fees and other expenses incurred in connection with this Agreement
secured by the Collateral, notwithstanding payment in full of all Obligations
by Debtor, Lender shall not be required to file terminations or satisfactions
of any of Lender’s liens on the Collateral unless and until Debtor
shall have provided a general release in favor of Lender, in form satisfactory
to Lender. Debtor understands that this provision constitutes a waiver of its
rights under Section 9-513 of the Uniform Commercial Code. |
Security Agreement | 4 | P a g
e |
| 17. | No
Waiver; Cumulative Remedies. No failure on the part of Lender to exercise,
and no delay on the part of Lender in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by Lender preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive
of any other remedies that may be available to Lender, whether at law, in equity or
otherwise. No course of dealing between Debtor and Lender shall operate as
a waiver of any rights of Lender under this Agreement or in respect of the Collateral
or the Obligations. |
| 18. | Indemnity.
Debtor assumes liability for and does hereby agree to indemnify, protect, save and keep
harmless Lender and its agents, from and against any and all liabilities, claims,
losses, obligations, damages, penalties, actions, and suites of whatsoever kind and nature
imposed on, incurred by or asserted against Lender or its agents, in any way relating
to or growing out of this Agreement, the Guaranty or the Collateral (including
without limitation, enforcement of this Agreement and the Guaranty or disposition
of the Collateral), except claims, losses or liabilities resulting solely from Lender’s
gross negligence or willful misconduct. |
| 19. | Miscellaneous.
The invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof. Neither this Agreement
nor any term hereof may be amended orally, nor may any provision hereof be waived orally
but only by an instrument in writing signed by Lender and, in the case of an amendment,
by Debtor and any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. This Agreement shall be governed by
and construed in accordance with the law of the State of Illinois, except as required by
mandatory provisions of law and except to the extent that the validity or perfection of the
security interest hereunder in respect of any particular Collateral are governed by
the law of a jurisdiction other than the State of Illinois. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an original,
but all such separate counterparts shall together constitute but one and the same instrument.
Each party acknowledges that is has reviewed this Agreement, and the parties hereby agree
that the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this Agreement. |
| 20. | Assignments.
This Agreement shall bind the parties hereto and their respective successors and
assigns. This Agreement and the Guaranty may be assigned by Lender to
a third party, and the Debtor consents to such assignment and agrees that this Agreement
and the Guaranty will be in favor of the assignee(s) upon assignment, without
any defenses, counterclaims or setoffs of any kind whatsoever. All of the terms of this Agreement
and the Guaranty shall inure to the benefit of Lender and its successors
and assigns and shall be binding upon Debtor and its heirs, executors, administrators,
personal representatives, successors and assigns. Lender may grant participations
in all or any portion of and may assign all or any part of Lender’s rights under,
this Agreement and the Guaranty. Lender may disclose to any such participant
or assignee any and all information held by or known to Lender at any time with respect
to Debtor. |
| 21. | Notices.
All notices and other communications under this Agreement shall be in writing
and shall be deemed to have been given three (3) business days after deposit in the mail,
designated as certified mail, return receipt requested, postage-prepaid, one (1) business
day after being entrusted to a reputable commercial overnight delivery service, addressed
to the party to whom such notice is directed at its address as forth above, or upon sending
if sent via electronic mail. Any party hereto may change the address to which notices shall
be directed under this Paragraph by giving three (3) business days written notice of such
change to the other parties. |
|
|
If to Lender, then to: |
|
|
|
|
Lender: |
Loeb Term Solutions LLC |
|
|
|
Attention: |
Howard M. Newman
|
|
|
|
Address: |
8609 W. Bryn Mawr, Suite 208 |
|
|
|
Phone: |
|
|
|
|
Email: |
|
|
|
|
Carbon copy: |
|
|
|
|
Email address:
|
|
|
|
If to Debtor, then to: |
|
|
|
|
Debtor: |
Worksport New York Operations Corporation |
|
|
|
Attention: |
Steven Rossi
|
|
|
|
Address: |
2500 N. America Drive |
|
|
|
|
West Seneca, New York 14224 |
|
|
|
Phone: |
|
|
|
|
Email: |
|
Security Agreement | 5 | P a g
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| 22. | WAIVER
OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT THEY OR ANY OTHER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED
ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT AND ANY DOCUMENT CONTEMPLATED
TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER OR ANY PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. |
| 23. | JURISDICTION.
THE PARTIES AGREE THAT ANY ACTION TO ENFORCE DEBTOR’S OBLIGATIONS TO LENDER
OR ANY ACTION RELATING TO OR ARISING OUT OF THE LOAN OR THIS AGREEMENT
SHALL BE PROSECUTED EITHER IN THE CIRCUIT COURT OF COOK COUNTY MICHIGAN OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, AND DEBTOR SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT. DEBTOR WAIVES ANY AND ALL RIGHTS TO CONTEST THE JURISDICTION AND
VENUE OF ANY ACTION BROUGHT IN THIS MATTER AND DEBTOR MAY BRING ANY ACTION AGAINST LENDER
ONLY IN THE CIRCUIT COURT FOR THE COUNTY OF COOK OR THE FEDERAL COURT OR THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS. |
| 24. | Electronic
Signatures: THIS AGREEMENT AND THE GUARANTY MAY BE SIGNED AND/OR TRANSMITTED BY FACSIMILE,
E-MAIL OF A .PDF DOCUMENT OR USING ELECTRONIC SIGNATURE TECHNOLOGY (E.G., VIA DOCUSIGN OR
SIMILAR ELECTRONIC SIGNATURE TECHNOLOGY), AND THAT SUCH SIGNED ELECTRONIC RECORD SHALL BE
VALID AND AS EFFECTIVE TO BIND THE PARTY SO SIGNING AS A PAPER COPY BEARING SUCH PARTY’S
HAND-WRITTEN SIGNATURE. THE PARTIES FURTHER CONSENT AND AGREE THAT (a) TO THE EXTENT A PARTY
SIGNS THIS AGREEMENT OR THE GUARANTY USING ELECTRONIC SIGNATURE TECHNOLOGY, BY CLICKING “SIGN”,
SUCH PARTY IS SIGNING THIS AGREEMENT OR THE GUARANTY ELECTRONICALLY, AND (b) THE ELECTRONIC
SIGNATURES APPEARING ON THIS AGREEMENT OR THE GUARANTY SHALL BE TREATED, FOR PURPOSES OF
VALIDITY, ENFORCEABILITY AND ADMISSIBILITY, THE SAME AS HAND-WRITTEN SIGNATURES. |
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
DEBTOR: |
|
|
|
|
Worksport
New York Operations Corporation |
|
|
|
|
Signature: |
|
|
Print
Name: |
Steven
Rossi |
|
Title: |
President |
|
LENDER: |
|
|
|
|
Loeb
Term Solutions LLC |
|
|
|
|
Signature: |
|
|
Print
Name: |
Howard
M. Newman |
|
Title: |
Manager |
|
Security Agreement | 6 | P a g
e |
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