UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20509
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
July
2, 2015
Date
of Report
(Date
of earliest event reported)
FONU2
INC.
(Exact
name of registrant as specified in its charter)
| NEVADA |
|
000-49652 |
|
65-0773383 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File No.) |
|
(IRS Employee
I.D. No.) |
135
Goshen Road Ext., Suite 205
Rincon,
GA 31326
(Address
of Principal Executive Offices)
(912)
655-5321
Registrant's
Telephone Number
N/A
Former
name or former address, if changed since last report
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
See
Item 2.01 of this Current Report.
Item
2.01 Completion of Acquisition or Disposition of Assets.
On
July 2, 2015, Studio City Rentals, LLC, a Nevada limited liability company (the “Company”) and a wholly-owned subsidiary
of FONU2 Inc. (“FONU2”) completed the purchase of all assets of Apple Box Productions, Inc., a film rental production
company based in Jacksonville, Florida (“Apple Box”). The Company paid total consideration of $1,000,000 consisting
of (1) $400,000 in cash, and (2) $600,000 in a subordinated note (the “Seller Note”).
The
Seller Note bears interest at eight percent (8%) per annum and is payable in a lump sum or $94,000 on or before the sixtieth day
following the closing date, and thereafter in monthly payments of not less than $25,000, with a final payment of all unpaid principal
and accrued interest on the first anniversary of the closing date. The Seller Note is secured by the collateral assignment of
all purchased assets pursuant to a Security Agreement between the Company and the Seller. The repayment of the Seller Note is subordinated
to the payment of the indebtedness of FONU2 to Loeb Term Solutions LLC (“Loeb”) described below. FONU2 and Jake
Shapiro, Chairman and CEO of FONU2, have both unconditionally guaranteed the repayment of the Seller Note.
In
order to finance a portion of the cash portion of the purchase price and to pay closing costs, FONU2 borrowed $350,000 from Loeb
pursuant to a Term Promissory Note (the “Loeb Note”) which is secured by the collateral assignment of all purchased
assets pursuant to a Security Agreement between the Company and Loeb. The Loeb Note bears interest at the prime rate plus ten
percent (10%) per annual and is paid in 206 consecutive weekly payments of $2,164.39, with a final payment of all outstanding
principal and accrued but unpaid interest due on June 19, 2019. The repayment of the Loeb Note is senior to the payment of the
indebtedness of the Company to Apple Box described above. FONU2 and Jake Shapiro, Chairman and CEO of FONU2, have both unconditionally
guaranteed the repayment of the Loeb Note.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
See
Item 2.01 of this Current Report.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
| Exhibit
No. |
|
Description
of Exhibit |
| |
|
|
10.1 |
|
Purchase
and Sale Agreement between Apple Box Productions, Inc. and Studioplex City Rentals, LLC* |
| |
|
|
10.2 |
|
Promissory
Note from Studioplex City Rentals, LLC to Apple Box Productions, Inc. |
| |
|
|
10.3 |
|
Security
Agreement between Apple Box Productions, Inc. and Studioplex City Rentals, LLC* |
| |
|
|
10.4 |
|
Term
Promissory Note from Studioplex City Rentals, LLC to Loeb Terms Solutions LLC |
| |
|
|
10.5 |
|
Security
Agreement between Studioplex City Rentals LLC and Loeb Terms Solutions LLC * |
| * | Exhibits
and schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation
S-K. The Company will furnish copies of the omitted exhibits and schedules to the Securities
and Exchange Commission upon its request. |
SIGNATURES
Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Current Report to be signed
on its behalf by the undersigned hereunto duly authorized.
| |
FONU2
INC., a Nevada corporation |
| |
|
|
| Date:
July 8, 2015 |
|
|
| |
By:
|
/s/
Roger Migeul |
| |
|
Roger
Miguel, Chief Executive Officer |
4
Exhibit 10.1
PURCHASE
AND SALE AGREEMENT
This
Purchase and Sale Agreement (this "Agreement"), is executed and delivered as of June _2015 (the “Effective
Date”), by and between Studioplex City Rentals, LLC, a Nevada limited liability company ("Buyer"),
and Apple Box Productions, Inc., a Florida corporation (“Seller”).
Background
Seller
owns certain equipment associated with its film production business (the "Business"). Buyer desires to purchase
and Seller desires to sell substantially all of the equipment of the Business.
Agreement
NOW
THEREFORE, in consideration of the premises and mutual covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Purchase
and Sale of the Equipment. Subject to the terms and conditions set forth in this Agreement, Buyer agrees to purchase from
Seller, and Seller agrees to sell to Buyer, the Equipment listed on Exhibit A attached hereto (the “Equipment”)
on an “as-is” and “where-is” basis. The Buyer assumes no liabilities or obligations of Seller or the Business.
2. Purchase
Price. The purchase price for the Equipment shall be not less than Nine Hundred Ninety-Four Thousand Dollars ($994,000)(the
“Purchase Price”). The Buyer shall pay Seller the Purchase Price as follows:
(a) Four
Hundred Thousand Dollars ($400,000)(the “Initial Payment”) in certified funds paid at Closing; and
(b) A
secured subordinated promissory note in the amount of Five Hundred Ninety-Four Thousand Dollars ($594,000) (the “Note”),
in the form attached hereto as Exhibit B. Payments under the Note shall be (i) a lump sum of Ninety-Four Thousand Dollars
($94,000) due within sixty (60) days of execution (the “First Payment”) and (ii) monthly payments thereafter
equal to the greater of Twenty-Five Thousand Dollars ($25,000) or seventy percent (70%) of the Monthly Net Rental Income associated
with the Equipment and received by Buyer through the first anniversary of Closing. For purposes of this Agreement and the Note,
“Monthly Net Rental Income” shall mean an amount equal to Buyer’s total income derived from rentals of
the Equipment less any operating expenses associated with such rentals.
(c) Notwithstanding
Buyer’s payment of the Note in full, Buyer shall continue to pay to Seller seventy percent (70%) of the Monthly Net Rental
Income associated with the Equipment and received by Buyer through the first anniversary of Closing, which amounts, if paid, shall
constitute an increase in the Purchase Price.
3. Closing.
The closing of the transactions contemplated hereby (the "Closing") shall take place, simultaneously with the
closing of Buyer’s financing with Loeb Term Solutions LLC, but in no case more than thirty (30) days from the Effective
Date, at a time and place mutually agreeable to the parties.
4. Closing
Deliveries. In addition to any other documents to be delivered under other provisions of this Agreement, at the Closing:
| (a) | Seller
shall deliver to Buyer: |
i. A
Bill of Sale in the form of Exhibit C attached hereto (the “Bill of Sale”);
ii. An executed Lease Agreement in the form of Exhibit D attached hereto (the “Lease Agreement); and
iii. such
other assignments, certificates of title, affidavits, documents, and other instruments of transfer and conveyance as may reasonably
be requested by Buyer, each in form and substance satisfactory to Buyer and its legal counsel and executed by Seller;
| (b) | Buyer
shall deliver to Seller: |
i. The
Initial Payment;
| iii. | an
executed Lease Agreement; |
| iv. | a
Security Agreement in the form of Exhibit E attached hereto; |
| v. | a
Personal Guaranty in the form of Exhibit F attached hereto (the“Guaranty”); |
vi. the
Intercreditor Agreement in the form of Exhibit G attached hereto (the “Intercreditor Agreement”), executed
by Loeb Term Solutions LLC and acknowledged by Buyer; and
| vii. | a
Certificate of Insurance as required under Section 4.1(f) of the Security Agreement. |
5. Delivery
of Equipment. The Buyer expressly acknowledges that it has had an opportunity to inspect the Equipment and hereby accepts
the Equipment in its “as is” condition and without any express or implied warranty from Seller. Title and risk of
loss shall pass to Seller at Closing. Buyer shall be responsible for all expenses related to delivery of the Equipment.
6. Representations
and Warranties of Buyer. Buyer hereby represents and warrants to Seller as of the date hereof and as of the Closing Date,
as follows, subject to such disclosure, qualification or limitation set forth in the Buyer’s public filings:
(a) Incorporation.
Buyer has been duly incorporated and validly exists in good standing under the laws of Nevada.
(b) Authorization.
The execution, delivery, and performance of this Agreement have been duly authorized by all requisite corporate action and no
further consent or authorization of Buyer, its shareholders or Board of Directors is required.
(c) Execution
and Delivery. This Agreement has been duly executed and delivered by Buyer and, when this Agreement is duly authorized, executed,
and delivered by Seller, will be a valid and binding agreement enforceable against Buyer in accordance with its terms.
(d) Brokers.
Buyer certifies that Buyer has not contracted or engaged a broker in relation to the present transaction.
(e) Corporate
Power; Qualification. Buyer has full corporate power and authority necessary to (i) own and operate its properties and the
Equipment, execute and deliver this Agreement, (ii) perform its obligations and (iii) carry on its business as presently conducted
and as presently proposed to be conducted. Buyer and its subsidiaries are duly qualified and are authorized to do business and
are in good standing in all jurisdictions in which the nature of their activities and of their properties (both owned and leased)
makes such qualification necessary, except for those jurisdictions in which failure to do so would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. For purposes of this Agreement, "Material Adverse
Effect" means any material adverse effect with respect to (A) the business, properties, Equipment, operations, results
of operations, revenues, prospects or condition, financial or otherwise, of Buyer and its subsidiaries taken as a whole, (B) the
legality, validity or enforceability of the Agreement, or (C) Buyer's ability to perform fully on a timely basis its obligations
under the Agreement.
(f) No
Consents. No consent, approval, authorization or order of any court, governmental agency or other body is required for execution
and delivery by Buyer of this Agreement or the performance by Buyer of any of its obligations hereunder.
(g) Proceedings.
There is no pending or, to the best knowledge of Buyer, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over Buyer or any of its affiliates that would affect the execution
by Buyer of, or the performance by either Buyer of its obligations under, this Agreement.
7. Representations
and Warranties of Seller: Seller hereby represents and warrants to Buyer on the date hereof and on the Closing Date:
(a) Incorporation.
Seller has been duly incorporated and validly exists in good standing under the laws of Florida.
(b) Authorization.
The execution, delivery, and performance of this Agreement have been duly authorized by all requisite corporate action and no
further consent or authorization of Seller, its shareholders or Board of Directors is required.
(c) Execution
and Delivery. This Agreement has been duly executed and delivered by Seller and, when this Agreement is duly authorized, executed
and delivered by Buyer, will be a valid and binding agreement enforceable against Seller in accordance with its terms.
(d) Proceedings.
There is no pending or, to the best knowledge of Seller, threatened action, suit, proceeding or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over Seller or any of its affiliates that would affect the execution
by Seller of, or the performance by either Seller of its obligations under, this Agreement.
(e) Title
to Equipment. Seller has good and marketable title to the Equipment, free and clear of all liens and encumbrances.
8. Fees
and Expenses. Seller and Buyer each agrees to pay its own expenses incident to the performance of its obligations hereunder,
including, but not limited to the fees, expenses, and disbursements of such Party's counsel, except as is otherwise expressly
provided in this Agreement.
(a) Indemnification
of Buyer. Seller shall indemnify, defend, and hold harmless Buyer, its subsidiaries, affiliates, officers, directors, shareholders,
employees, agents, and representatives (“Buyer Indemnitees”) from and against any and all demands, claims,
costs, damages, losses, liabilities, expenses of any nature (including reasonable and necessary fees and disbursements of attorneys,
accountants, and experts), judgments, settlements, fines, penalties, or other amounts (collectively, "Damages")
arising from any and all claims, proceedings, demands, actions, suits (whether civil, criminal, investigative, or otherwise) (“Claims”)
relating to or arising out of (i) any breach of warranty or representation made by Seller in this Agreement; (ii) rental of the
Equipment and operation of the Business through the Closing Date, (iii) any pre- Closing debts, liabilities, taxes, or obligations
of the Seller and the Business, whether accrued, absolute, contingent, or otherwise, due or to become due, (iv) any person or
other entity claiming brokerage commissions or fees or other rights to similar compensation on account of services rendered on
Seller’s behalf in connection with the transactions contemplated herein, and (v) any and all unemployment claims filed by
Seller’s employees against Buyer as a result of the transfer of Equipment and relocation of the Equipment. Provided that
the foregoing indemnity shall not apply to any Claim to the extent that it arises out of, or is based upon, the gross negligence
or willful misconduct of Buyer in connection therewith.
(b) Indemnification
of Seller. Buyer agrees to and does hereby indemnify, defend, and hold harmless Seller, its subsidiaries, affiliates,
officers, directors, shareholders or members, employees, managers, agents and representatives (“Seller
Indemnitees”) from any and all Claims and Damages arising out of (i) any breach of warranty or representation made
by Buyer in this Agreement; (ii) operation or rental of the Equipment after the Closing Date, (iii) any post-Closing debts,
liabilities, taxes, or obligations arising from the rental of the Equipment or operation of the Business, whether accrued,
absolute, contingent, or otherwise, due or to become due, and (iv) any person or other entity claiming brokerage commissions
or fees or other rights to similar compensation on account of services rendered on Buyer’s behalf in connection with
the transactions contemplated herein. Provided that the foregoing indemnity shall not apply to any Claim to the extent that
it arises out of, or is based upon, the gross negligence or willful misconduct of Seller in connection therewith.
(i) Whenever
a claim for indemnification shall arise as a result of a third party claim, the party seeking indemnification (the "Indemnified
Party"), shall notify the party from whom such indemnification is sought (the "Indemnifying Party")
in writing of the Claim and the facts constituting the basis for such claim in reasonable detail; provided, that the Indemnified
Party shall not be foreclosed by any failure to provide timely notice of the existence of a third party claim to the Indemnifying
Party except to the extent that the Indemnifying Party has been materially prejudiced as a direct result of such delay;
(ii) Such
Indemnifying Party shall have the right to retain the counsel of its choice in connection with such Claim and to participate at
its own expense in the defense of any such Claim; provided, however, that counsel to the Indemnifying Party shall not (except
with the consent of the relevant Indemnified Party) also be counsel to such Indemnified Party. In no event shall the Indemnifying
Party be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from its own counsel
for all Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances; and
(iii) No
Indemnifying Party shall, without the prior written consent of the Indemnified Parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification
could be sought under this Section unless such settlement, compromise or consent (A) includes an unconditional release of each
Indemnified Party from all liability arising out of such litigation, investigation, proceeding or claim and (B) does not include
a statement as to or an admission of fault, culpability, or a failure to act by or on behalf of any Indemnified Party.
10. Survival
of the Representations, Warranties, etc. The respective representations, warranties, and agreements made herein by or on behalf
of the Parties hereto shall survive the Closing of this Agreement and remain in full force and effect until the first anniversary
of the Closing Date.
11. Notices.
All communications hereunder shall be in writing and will be deemed delivered: if delivered by hand, on the day received by
Buyer or Seller; if sent by reputable overnight courier, on the next Business Day; and if transmitted by facsimile to Buyer
or Seller, on the date transmitted (provided such facsimile is later confirmed), in each case to the following address
(unless otherwise notified in writing of a substitute address)
Andrew Howell
Apple
Box Productions, Inc.
1063
Haines Street
Jacksonville, Florida 32206
With
a copy to (which copy shall not constitute Notice):
G.
Alan Howard, Esq.
Milam
Howard Nicandri Dees & Gillam, P.A.
14
East Bay Street
Jacksonville, Florida 32202
Jake Shapiro
Studioplex
City Rentals, LLC
135
Goshen Road Extension, Suite 205
Rincon,
Georgia 31326
All
notices delivered by Parties pursuant to this Agreement shall be deemed effective automatically on the date of delivery.
11. Maintenance
of Records. Buyer shall keep accurate records of all rentals of the Equipment for so long as amounts remain unpaid under the
Note. Seller, from time to time, shall have the right, personally or through its agents, to examine the records of Buyer relating
to such rentals for the purpose of auditing Buyer’s Monthly Net Rental Income and payments due under the Note (“Audit”).
Seller shall give Buyer reasonable notice of an intended Audit, which shall be conducted at the premises of the Buyer. Seller
shall be able to conduct Audit up to three (3) occasions whilst the Note is outstanding. If as a result of such Audit it is determined
that Buyer is in violation of its obligations under the Note and under this Agreement, Buyer shall be in material breach of the
Note and this Agreement and shall, among other remedies available to Seller, reimburse Seller for the costs of the audit.
(a) Counterparts.
The Parties may execute and deliver this Agreement as a single document or in any number of counterparts, manually, by facsimile
or by other electronic means, including contemporaneous photocopy or electronic reproduction by each Party's respective attorneys.
Each counterpart shall be an original, but a single document or all counterparts together shall constitute one instrument that
shall be the agreement.
(b) Successors
and Assigns. This Agreement will inure to the benefit of and be binding upon the Parties hereto and their respective
successors and assigns. This Agreement constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the Parties hereto with respect to the subject matter hereof.
(c) Governing
Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of
Georgia, and each of the Parties hereto hereby submits to the exclusive jurisdiction of any state or federal court in the District
of Georgia and any court hearing any appeal therefrom, over any suit, action, or proceeding against it arising out of or based
upon this Agreement (a "Related Proceeding"). Each of the Parties hereto also agrees not to bring any Related
Proceeding in any other court. Each of the Parties hereto hereby waives any objection to any Related Proceeding in such courts
whether on the grounds of venue, residence or domicile or on the ground that the Related Proceeding has been brought in an inconvenient
forum.
(d) Construction.
Each Party represents and acknowledges that, in the negotiation and drafting of this Agreement and the other instruments and documents
required or contemplated hereby, it has been represented by and relied upon the advice of counsel of its choice. Each Party hereby
affirms that its counsel has had a substantial role in the drafting and negotiation of this Agreement and such other instruments
and documents. Therefore, each Party agrees that no rule of construction to the effect that any ambiguities are to be resolved
against the drafter shall be employed in the interpretation of this Agreement and such other instruments and documents. The Parties
intend that each representation, warranty, covenant and investment right contained herein shall have independent significance.
If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists
another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity)
that the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant.
(e) Specific
Enforcement. The Parties stipulate that the remedies at law of the Parties hereto in the event of any default or threatened
default by any Party in the performance of or compliance with any of the terms of this Agreement are not and will not be adequate
and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance
of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
(f) Remedies
Cumulative. Any and all remedies set forth in this Agreement: (i) shall be in addition to any and all other remedies the
Parties may have at law or in equity, (ii) shall be cumulative, and (iii) may be pursued successively or concurrently as
each of the Parties may elect. The exercise of any remedy by any Party shall not be deemed an election of remedies or
preclude such Party from exercising any other remedies in the future. The prevailing Party in any Related Proceeding shall be
entitled to recover his or its reasonable attorneys’ fees and costs (including experts’ and witness fees and
costs) from the unsuccessful Party.
(g) Obligations.
Each Party agrees that the Parties have negotiated in good faith and at arms' length concerning the transactions contemplated
herein, and that another Party would not have agreed to the terms of this Agreement without each and every of the terms, conditions,
protections and remedies provided herein.
(h) Amendments.
This Agreement may be amended, modified or supplemented in any and all respects, but only by a written instrument signed by
the Parties expressly stating that such instrument is intended to amend, modify or supplement this Agreement.
(i) Interpretation.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (i) the terms
defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular,
and the use of any gender herein shall be deemed to include the other gender and neuter gender of such term; (ii) accounting terms
not otherwise defined herein have the meanings assigned to them in accordance with U.S. generally accepted accounting principles;
(iii) references herein to "Articles", "Sections", "Subsections", "Paragraphs" and other
subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement, unless the context shall otherwise require; (iv) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall
also apply to Paragraphs and other subdivisions; (v) the words "herein", "hereof", "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any particular provision; (vi) the term "include"
or "including" shall mean without limitation; (vii) the table of contents to this Agreement and all section titles or
captions contained in this Agreement or in any Schedule or Exhibit annexed hereto or referred to herein are for convenience only
and shall not be deemed a part of this Agreement and shall not affect the meaning or interpretation of this Agreement; (viii)
any agreement, instrument or statute defined or referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statues and references to all attachments thereto and instruments incorporated
therein; and (ix) references to a Person are also to its permitted successors and assigns and, in the case of an individual, to
his or her heirs and estate, as applicable.
(j) Severability.
If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any rule of law or public
policy all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. If the final
judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, void or
unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable
term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision. Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby
be consummated as originally contemplated to the fullest extent possible.
SIGNATURES
APPEAR ON FOLLOWING PAGE
IN
WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Purchase and Sale Agreement, all as of the day and year
first above written.
| |
BUYER:
|
| |
|
|
| |
Studioplex
City Rentals, LLC |
| |
|
|
| |
By: |
|
| |
|
Roger
Miguel, Chief Executive Officer |
| |
|
|
| |
SELLER:
|
| |
|
|
| |
Apple
Box Productions, Inc. |
| |
|
|
| |
By: |
|
| |
|
Andrew
Howell, President |
9
Exhibit 10.2
PROMISSORY NOTE
| $594,000 |
July 1, 2015 |
| |
Rincon, Georgia |
FOR VALUE RECEIVED, Studioplex
City Rentals, LLC, a Nevada limited liability company (the "Obligor"), hereby promises to pay to the order of Apple
Box Productions, Inc., a Florida corporation (the "Holder"), the principal sum of Five Hundred Ninety-Four Thousand
Dollars ($594,000), together with interest on the outstanding principal balance hereof at the rate provided herein. This is the
“Note” referred to in that certain Purchase and Sale Agreement by and between Holder and Obligor dated of even date
herewith (the “Purchase Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Purchase Agreement. This Note shall be governed by the following provisions:
1. Payments.
The Obligor shall pay interest and principal hereunder as follows: (a) a lump sum payment of Ninety-Four Thousand Dollars ($94,000)
(the “Initial Payment”) on or before the sixtieth (60th) day following the Closing Date, (b) installments of principal
and interest in an amount equal to the greater of (i) seventy percent (70%) of Obligor’s Monthly Net Rental Income (as defined
in the Purchase Agreement) or (ii) Twenty-Five Thousand Dollars ($25,000) shall be payable on the 10th day of each calendar month
commencing on the tenth day of the third month following the Closing Date; and (c) all remaining outstanding principal hereunder,
together with all then accrued and unpaid interest, shall be due on the first anniversary of the date hereof.
2. Interest.
Interest shall accrue on the outstanding principal balance of this Note at an annual percentage rate of eight percent (8%).
3. Prepayment.
The Obligor may prepay this Note in whole or in part at any time without penalty. All proceeds payable to Lender pursuant to Section
4.3(d) of the Security Agreement (as defined below), shall be applied to the Initial Payment.
4. Application
of Payments. All payments hereunder shall be applied first to interest and then to principal.
5. Security.
This Note is made in connection with, and is secured by, that certain Security Agreement of equal date herewith (the “Security
Agreement”). Reference is hereby made to the Security Agreement for the provisions, among others, with respect to the custody
and application of the Collateral (as defined therein), the nature and extent of the security provided thereunder, the rights,
duties, and obligations of Obligor, and the rights of the Holder.
6. Default.
Any of the following events shall be considered an "Event of Default":
a. Nonpayment
of any amount payable hereunder when and as the same shall be due;
b. Any
default under the Senior Note (as defined in the Intercreditor Agreement);
c. Obligor
shall enter into an assignment for the benefit of creditors, file a voluntary petition in bankruptcy, be adjudicated as bankrupt
or insolvent, or seek or consent to, or acquiesce in, the appointment of any trustee or receiver for its or any substantial part
of its property, or shall become unable to pay its debts and obligations as they come due;
d. Obligor
shall file any answer admitting, or fail to deny, the material allegations of any insolvency petition filed against it; or
e. Any
covenant, agreement or condition in this Note or the Purchase Agreement or any Loan Document is not fully and timely performed,
observed or kept, subject to any applicable grace or cure period.
If any Event of Default shall occur, the Holder
may declare, the outstanding principal of this Note, all accrued and unpaid interest hereunder and all other amounts payable under
this Note to be forthwith due and payable. Borrower shall have ten (10) business days from the Event of Default in order to cure
any breach causing the Event of Default (“Cure Period”). Such remedies as detailed herein shall not be exercised by
the Lender within the Cure Period or if Borrower has remedied the Event of Default. Subject to the forgoing, thereupon, the outstanding
principal of this Note, all such interest and all such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly waived by the Obligor.
7. Miscellaneous.
The Obligor and all sureties, endorsers and guarantors of this Note shall make all payments hereunder in lawful money of the United
States at the Holder’s address set forth herein or at such other place as the Holder may designate in writing. The remedies
of the Holder as provided herein shall be cumulative and concurrent, and may be pursued singly, successively or together, at the
sole discretion of the Holder and may be exercised as often as occasion therefor shall arise. No act of omission or commission
of the Holder, including specifically any failure to exercise any right, remedy or recourse, shall be effective, unless set forth
in a written document executed by the Holder, and then only to the extent specifically recited therein. A waiver or release with
reference to one event shall not be construed as continuing, as a bar to, or as a waiver or release of any subsequent right, remedy
or recourse as to any subsequent event. This Note shall be construed and enforced in accordance with Florida law and shall be
binding on the successors and assigns of the parties hereto. The term "Holder" as used herein shall mean any holder
of this Note and his successors, assigns and heirs. Obligor agrees to pay to Holder on demand all costs and expenses incurred
by Holder in seeking to collect this Note, including court costs and reasonable attorneys’ fees, paralegals’ fees
and expenses, whether or not suit is filed hereon, or whether in connection with bankruptcy, insolvency or appeal. The terms of
this Note will bind and inure to the benefit of the heirs, devisees, representatives, successors and assigns of the Holder. Obligor
irrevocably and unconditionally submits to the exclusive jurisdiction of courts having jurisdiction and sitting in Jacksonville,
Florida, and any appellate court thereof, in any suit, action or proceeding arising out of or relating to this Note or for recognition
or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect
of any such suit, action or proceeding may be heard and determined in such relevant court.
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STUDIOPLEX CITY RENTALS, LLC |
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By: |
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Roger Miguel, Chief Executive Officer |
Exhibit 10.3
SECURITY
AGREEMENT
This
Security Agreement (this “Security Agreement”) is dated as of July 1, 2015 by Studioplex City Rentals, LLC, a Nevada
limited liability company (the “Borrower”), and is executed and delivered to and in favor of Apple Box Productions,
Inc., a Florida corporation (the “Lender”).
NOW,
THEREFORE, in consideration of the Indebtedness (as hereinafter defined) of the Borrower to the Lender, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Borrower
hereby agree as follows:
ARTICLE
I
DEFINITIONS
| 1.1 | Definitions.
As used herein, the following terms shall have the following meanings: |
a. Books
and Records means all of the Borrower's books and records indicating, summarizing, or evidencing the Collateral, the Indebtedness,
and the Borrower's property and business operations as specifically relating to the ownership and operation of the Equipment (as
defined below), financial condition; including without limitation, computer runs, invoices, tapes, processing software, processing
contracts (such as contracts for computer time and services) and any computer prepared information, tapes, or data of every kind
and description, whether in the possession of the Borrower or in the possession of third parties specifically relating to the
ownership and operation of the Equipment and the Proceeds.
b. Collateral
means solely the following types or items of property of the Borrower whether now owned or hereafter acquired, and wherever
located:
i. Equipment:
All equipment of the Borrower listed on Exhibit A to the Purchase and Sale Agreement (the "Equipment"), including but
not limited to the vehicles listed on Exhibit A to the Purchase and Sale Agreement (the “Vehicles”);
ii. Proceeds:
Any and all proceeds of the foregoing and all property which is within the definition of proceeds as it is defined in the Uniform
Commercial Code, including without limitation, whatever is received upon the use, lease, sale, exchange, collection, any other
utilization or any disposition of any of the foregoing property described in this Section 1.1(b) whether cash or non-cash, all
rental or lease payments, substitutions, additions, accessions, replacements, products, and renewals of, to, or for such property
and all insurance therefor (collectively, "Proceeds").
c. Guaranty
Agreement means that certain Guaranty Agreement executed by Jake Shapiro in favor of Lender and dated of even date herewith.
d. Indebtedness means
any and all obligations, liabilities, and indebtedness of every kind and description of the Borrower owing to the
Lender, whether or not under the Note and whether such debts or obligations are primary or secondary, direct or
indirect, absolute or contingent, sole, joint or several, secured or unsecured, due or to become due, contractual or
tortious, arising by operation of law, by overdraft or otherwise, or now or hereafter existing, including, without
limitation, principal, interest, fees, late fees, expenses, attorneys' fees and costs, and/or the allocated fees and costs of
the Lender incurred in connection with collection of amounts due under the Note, that have been or may hereafter be
contracted or incurred; whether recovery upon the Indebtedness may be or hereafter may become barred by any statute of
limitations; and whether such Indebtedness may be or hereafter may become otherwise unenforceable.
e. Intercreditor
Agreement shall mean that certain Intercreditor Agreement by and between Loeb Term Solutions, LLC (the “Senior Lender”)
and Lender and dated of even date herewith.
f. Loan
Documents shall mean, collectively, (i) the Note and (ii) the Guaranty Agreement.
g. Note
shall mean that certain Promissory Note in the amount of $594,000 executed by Borrower in favor of Lender and dated of even
date herewith.
h. Obligor
means the Borrower and each and every maker, endorser, guarantor, or surety of or party obligated for any of the Indebtedness.
i. Purchase
Agreement means that certain Purchase and Sale Agreement by and between Borrower and Lender and dated June 17, 2015.
j. Uniform
Commercial Code means the Uniform Commercial Code, in effect from time to time in the State of Florida.
ARTICLE
II
SECURITY INTEREST
In
order to secure the due and punctual payment and performance of the Indebtedness, the Borrower hereby grants to the Lender a continuing
security interest in and general lien upon its right, title, and interest in the Collateral. If the Borrower has granted any security
interest to the Lender in any or all of the Collateral prior to the date of this Security Agreement, this Security Agreement shall
be deemed to be a reaffirmation of the previously granted security interest and an amendment and restatement of any previously
executed Security Agreement. It is the intention of the Borrower, all Obligors and the Lender that all existing security interests
will remain continuously perfected. The security interests granted are granted as security only and shall not subject the Lender
to, or in any way affect or modify, any obligation or liability of the Borrower or any other Obligor with respect to any of the
Collateral or any transaction which gave rise thereto.
ARTICLE
III
RIGHTS
IN CONNECTION WITH COLLATERAL
3.1 Delivery
of Documents. At any time and from time to time, upon the demand of the Lender, the Borrower will, at the Borrower's expense:
a. immediately
give, execute, deliver, pledge, endorse, file, and/or record any notice, statement, financing statement, instrument, document,
chattel paper, agreement, or other papers that may be necessary or desirable, or that the Lender may reasonably request, in order
to create, preserve, perfect, or validate any security interest granted pursuant hereto or intended to be granted hereunder or
to enable the Lender to exercise or enforce its rights hereunder or with respect to such security interest; and
b. keep,
stamp, or otherwise mark any and all documents, instruments, chattel paper, and its Books and Records relating to the Collateral
in such manner as the Lender may reasonably require.
3.2 Power
of Attorney. The Borrower hereby irrevocably appoints the Lender (and any of its attorneys, officers, employees, or agents)
as its true and lawful attorney-in-fact, said appointment being coupled with an interest, with full power of substitution, in
the name of the Borrower, the Lender, or otherwise, for the sole use and benefit of the Lender in its sole discretion, but at
the Borrower's expense, to exercise, to the extent permitted by law, in its name or in the name of the Borrower or otherwise,
the powers set forth herein, whether or not any of the Indebtedness is due
(a)
to, upon the occurrence of an Event of Default, endorse the name of the Borrower upon any instruments of payment, freight, or
express bill, bill of lading, storage, or warehouse receipt relating to the Collateral and to demand, collect, receive payment
of, settle, or adjust all or any of the Collateral; (b) to, upon the occurrence of a casualty or Event of Default, correspond
and negotiate directly with insurance carriers; and (c) to sign and file one or more financing statements and continuation statements
naming the Borrower as Borrower and the Lender as secured party to execute any notice, statement, instruments, agreement, or other
paper that the Lender may require to create, preserve, perfect, or validate any security interest granted pursuant hereto or to
enable the Lender to exercise or enforce its rights hereunder or with respect to such security interest. Neither the Lender nor
its attorneys, officers, employees, or agents shall be liable for any act, omissions, any error in judgment, or mistake in fact
in its/their capacity as attorney-in-fact. This power, being coupled with an interest is irrevocable until the Indebtedness has
been fully satisfied.
3.3 Security
Agreement as Filing Statement. At the Lender's sole option, and without the Borrower's consent, the Lender may file a copy
or other reproduction of this Security Agreement or any financing statement executed pursuant hereto as a financing statement
in any jurisdiction so permitting. The Lender is expressly authorized to file financing statements without the Borrower's signature.
3.4 Subordination
to Senior Lienholder. Lender’s interest in the Collateral is at all times subordinate to the rights of Senior Lender
as set forth in the Intercreditor Agreement but senior to the rights and interests of all other persons.
3.5 Lender's
Rights in Collateral. Subject to the rights of Senior Lender, pursuant to the terms of the Intercreditor Agreement, with respect
to the Collateral, or any part thereof, the right is expressly granted to the Lender, at its sole discretion:
a. to
transfer or register in the name of itself or its nominee any of the Collateral, and whether or not so transferred or registered,
to receive the income and dividends thereon, including stock dividends and rights to subscribe, and to hold the same as a part
of the Collateral and/or apply the same to the Indebtedness;
b. to
exchange any of the Collateral for other property upon the reorganization, recapitalization, or other readjustment and in connection
therewith, to deposit the Collateral or any part thereof with any nominee or depository upon such terms as the Lender may determine
in its sole discretion; and
c. extend
the time of payment, arrange for payment in installments, or otherwise modify the terms of, or release, any of the Collateral,
or refrain from exercising any right against any Collateral.
3.6 Custody
of Collateral. With respect to the Collateral, or any part thereof, which at any time may come into that possession, custody,
or under the control of the Lender or any of its Affiliates, agents, or correspondents, the Borrower hereby acknowledges and agrees
that the Lender's sole duty with respect to the custody, safekeeping, and physical preservation of such Collateral, whether pursuant
to Chapter 679 Florida Statutes or otherwise, shall be to deal with it in the same manner as it deals with similar property for
its own account.
3.7 Delay
in Realizing Upon Collateral. Neither the Lender, nor any of its directors, officers, employees, Affiliates, agents, or correspondents
shall be liable for failure to demand, collect, or realize upon any of the Collateral or for any delay in doing so.
ARTICLE
IV
REPRESENTATIONS,
WARRANTIES, AND COVENANTS
4.1 Representations
and Warranties. The Borrower represents and warrants to the Lender, which representations and warranties shall be continuing
representations and warranties until all of the Indebtedness is satisfied in full, and covenants with the Lender as follows:
a. Information
Previously Supplied; Place of Business; Locations of Collateral. All information previously provided by the Borrower to the
Lender concerning the Collateral is true and correct as of the date hereof. The sole place of business or chief executive office
of the Borrower (if the Borrower has more than one place of business) and the location where the Borrower maintains its Books
and Records is the address set forth on Schedule 4.3(a) hereof. All other places of business of the Borrower, locations of Collateral,
or addresses from which invoices are sent, if any, are at the location(s) hereafter disclosed to the Lender pursuant to Section
4.3(a) hereof;
b. Duly
Authorized. This Security Agreement and the other Loan Documents have been duly authorized, executed, and delivered, and constitute
the legal, valid, and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms.
c. Not
in Violation of Law. This Security Agreement and the other Loan Documents do not and will not violate any law, the organizational
documents, or bylaws of the Borrower, or any other agreement or instrument to which the Borrower or any of its property may be
bound or subject. Neither the Borrower nor the Collateral are in violation of or subject to any existing, pending, or threatened
investigation or inquiry pertaining to an alleged violation of any law.
d. No
Consents Required. No consent or approval of any person or entity, or of any public authority, is necessary for the valid
execution, delivery, and performance of this Security Agreement, or any other Loan Documents.
e. Title
to the Collateral; Good Repair. The Borrower is or, to the extent that any Collateral will be acquired after the date hereof,
will be, the sole owner of the Collateral, holding good and marketable title thereto, and covenants to keep the Collateral free
from any lien, security interest, encumbrance, or claim of any person or entity other than the liens and encumbrances of the Senior
Lender. The Borrower has the right to grant the security interests created by this Security Agreement. The security interests
granted by this Security Agreement constitute second priority perfected security interests in the Collateral, except with respect
to the security interest granted in the Vehicles, which constitutes a first priority perfected security interest. The Borrower
shall keep the Collateral in good order and repair, reasonable wear and tear excepted, and will not waste or destroy the Collateral
or any part thereof.
f. Insurance.
The Borrower shall maintain insurance at all times with respect to the Collateral against the risks of fire, theft, and such other
risks as the Lender may require, in an amount of not less than One Million Dollars ($1,000,000), naming Lender as an additional
insured, containing such other terms, in such form and amounts, for such periods, and written by such companies as are acceptable
to the Lender in its sole discretion. All such policies of insurance shall name the Lender as loss payee and shall provide for
not less than thirty (30) days' prior written notice to the Lender of intended cancellation or reduction in coverage. The Borrower
shall furnish the Lender with certificates or other evidence satisfactory to the Lender of compliance with the foregoing insurance
provisions. The Lender shall have the right (but shall be under no obligation) to pay any of the premiums on such insurance and
all such payments shall become part of the Indebtedness and be considered an advance at the highest rate of interest provided
for in the Loan Documents. The Borrower expressly authorizes its insurance carriers to pay proceeds of all insurance policies
covering all or any part of the Collateral directly to the Lender.
g. Notice
of Interest. If reasonably requested by the Lender, the Borrower shall give notice of the Lender's security interests in the
Collateral to any third person with whom the Borrower has any actual or prospective contractual relationship or other business
dealings.
h. Compliance
with Laws. The Borrower is, and shall continue to be, in compliance with all laws, statutes, rules, and regulations of every
kind applicable to the Borrower, its business, the Collateral and this Security Agreement and the Loan Documents. The Borrower
shall not use the Collateral or any of its property in violation of any law, statute, regulation, or ordinance.
i. Materially
Misleading Statements. No representation, warranty, or statement made herein, or in any certificate or document furnished
or to be furnished pursuant hereto or pursuant to any other Loan Document contains or will contain any untrue statement of fact
or omits or will omit any fact necessary to make it not misleading.
4.2 Restatement
of Representations and Warranties. The Borrower hereby restates each representation and warranty contained in the Purchase
Agreement.
4.3 Covenants.
The Borrower hereby covenants and agrees that for as long as any Indebtedness is outstanding:
a. Changes
in Location of Chief Executive Office, Residence, Books and Records, Collateral. The Borrower shall provide the Lender with
prompt written notice of (i) any intended change in the chief executive office or residence of the Borrower, and/or the office
where the Borrower maintains its Books and Records; and (ii) the location or movement of any Collateral to or at an address other
than an address specified on Exhibit 4.3(a) attached hereto, all such notices to be received by the Lender at least thirty (30)
days prior to the effective date of any such change. Said written notice shall not be required to be given by the Borrower should
the Collateral be moved in connection with rentals of the Equipment in the ordinary course of business within the State of Georgia.
If any such new location as set forth in subparagraphs (i) and (ii) hereof is on leased or mortgaged premises, the Borrower will
furnish the Lender, prior to the effective date of any such change, with landlord's or mortgagee's waivers pertaining to such
premises in form and substance satisfactory to the Lender in its sole discretion;
b. Prompt
Payment of Taxes. The Borrower shall promptly pay any and all taxes, assessments, and/or governmental charges upon the Collateral
on the dates such taxes, assessments, and/or governmental charges are due and payable, except to the extent that such taxes, assessments,
and/or charges are contested in good faith by the Borrower by appropriate proceedings and for which the Borrower is maintaining
adequate reserves. Upon request of the Lender, the Borrower shall deliver to the Lender such receipts and other proofs of payment
as the Lender may request;
c. Notice
of Adverse Changes, Events of Default, Seizures and Institution of Litigation. The Borrower shall immediately notify the Lender
of (i) any adverse change in its business, property, or financial condition, including, without limitation, any loss of or damage
to any Collateral; (ii) the occurrence of an Event of Default under this Security Agreement; (iii) any seizure of the Collateral
or any claims or alleged claims of third parties to the Collateral; and (iv) the institution of any litigation, arbitration, governmental
investigation, or administrative proceedings against or affecting the Borrower or any of the Collateral;
d. Disposition
of Collateral. The Borrower shall not sell, offer to sell, otherwise assign, or permit the involuntary transfer of, or disposition
of the Collateral or any interest therein, without the prior written consent of the Lender; provided, however, Borrower may sell
the Vehicles without the prior written consent of the Lender, and all proceeds from such sale(s) shall be payable to Lender and
applied to the Initial Payment (as defined in the Note).
e. Maintenance
and Inspection of Books and Records and Equipment. The Borrower shall maintain complete and accurate Books and Records and,
with respect to the Collateral, the Borrower shall make all necessary entries therein to reflect the location of its Equipment
and the Proceeds therefrom. The Borrower shall permit the Lender and its authorized agents and representatives to have full, complete,
and unrestricted access to the Books and Records at all reasonable times to inspect, audit, and make copies of any and all such
Books and Records (“Audit”) and, with respect to the Collateral, the Borrower shall permit the Lender and its authorized
agents and representatives to inspect any or all of the Equipment at all reasonable times. Seller shall give Buyer reasonable
notice of an intended Audit, which shall be conducted at the premises of the Buyer. Seller shall be able to conduct Audits on
up to three (3) occasions whilst the Note is outstanding. Upon submission to the Borrower of an invoice therefor, the Borrower
will reimburse the Lender for any and all fees and costs related to any inspection and/or Audit by the Lender and its authorized
agents and representatives. Upon the request of the Lender, the Borrower shall deliver to the Lender all evidence of ownership
in the Collateral, including certificates of title with the Lender's interest appropriately noted on the certificate and if any
of the Collateral is located upon land which is the subject of a lease or mortgage, the Borrower shall deliver an agreement of
subordination from the landlord or mortgagee providing that any lien of such party shall be subordinate to the security interest
of the Lender granted herein. The Lender's rights hereunder shall be enforceable at law or in equity, and the Borrower consents
to the entry of judicial orders or injunctions enforcing specific performance of such obligations hereunder.
ARTICLE
V
DEFAULT; REMEDIES
5.1 Events
of Default. The occurrence of any one of the following shall constitute an event of default ("Event of Default")
under this Security Agreement:
a. Breach
Under this Security Agreement. A breach by the Borrower of any term, obligation, provision, covenant, representation, or warranty
arising under this Security Agreement; or
b. Default
under Note or other Loan Documents. If any default or any Event of Default shall have occurred under the Purchase Agreement,
the Note or any other Loan Document.
a. Rights
in General. In addition the remedies of the Lender pursuant to the Note and the other Loan Documents, upon the
occurrence of, and following an Event of Default the Lender may, at its option, exercise any and all rights and
remedies it has under this Security Agreement, any other Loan Document, and/or applicable law. Borrower shall have ten (10)
business days from the Event of Default in order to cure any breach causing the Event of Default (“Cure Period”).
Such remedies shall not be exercised by the Lender within the Cure Period or if Borrower has remedied the Event of
Default.
b. Right
of Set-off. If any one or more Events of Default shall have occurred, whether or not the Lender shall have made any demand
under any of the Loan Documents, and regardless of the adequacy of any Collateral for the Indebtedness or other means of obtaining
repayment of the Indebtedness, the Lender shall have the right, without notice to the Borrower or to any other Obligor, and is
specifically authorized hereby to setoff against and apply to the then unpaid balance of the Indebtedness any items or funds of
the Borrower and/or any Obligor held by the Lender, any and all deposits (whether general or special, time or demand, matured
or unmatured) or any other property of the Borrower and/or any Obligor, including, without limitation, securities and/or certificates
of deposit, now or hereafter maintained by the Borrower and/or any Obligor for its or their own account with the Lender, and any
other indebtedness at any time held or owing by the Lender to or for the credit or the account of the Borrower and/or any Obligor.
c. Additional
Rights and Remedies. In addition to the rights and remedies available to the Lender as set forth above, upon the occurrence
of an Event of Default hereunder, or at any time thereafter, the Lender may, at its option, immediately and without notice, do
any or all of the following, which rights and remedies are cumulative, may be exercised from time to time, and are in addition
to any rights and remedies available to the Lender under any other agreement or instrument by and between any Obligor and the
Lender: (i) exercise any and all of the rights and remedies of a secured party under the Uniform Commercial Code, including, without
limitation, the right to require the Borrower to assemble the Collateral and make it available to the Lender at a place reasonably
convenient to the parties; (ii) operate, utilize, recondition, and/or refurbish any of the Collateral by any means deemed appropriate
by the Lender, in its sole discretion, including, without limitation, converting raw materials and for work-in-process into finished
goods; (iii) notify the account Borrowers for any of the Accounts to make payment directly to the Lender, or to such post office
box as the Lender may direct and/or exercise all rights with the same force and effect as an absolute owner; or (iv) demand, sue
for, collect, or retrieve any money or property at any time payable, receivable on account of, or in exchange for, or make any
compromise or settlement deemed desirable with respect to any of the Collateral.
d. Continuing
Enforcement of the Loan Documents. If, after receipt of any payment of all or any part of the Indebtedness or the
obligations of the Borrower to the Lender, the Lender is compelled or agrees, for settlement purposes, to surrender such
payment to any person or entity for any reason, then this Security Agreement and the other Loan Documents shall continue in
full force and effect or be reinstated, as the case may be. The provisions of this Paragraph shall survive for one hundred
(100) days following the termination of this Security Agreement and the other Loan Documents and shall be and remain
effective notwithstanding the payment of the Indebtedness, the cancellation of the Security Agreement or any other Loan
Document, the release of any security interest, lien, or encumbrance securing the Indebtedness or any other action which the
Lender may have taken in reliance upon its receipt of such payment. The Borrower also agrees to indemnify, defend, and
hold harmless the Lender with respect to any and all claims, expenses, demands, losses, costs, fines, or liabilities of any
kind (including, without limitation, those involving death or personal injury) arising from or in any way related to any
hazardous materials or dangerous environments within, on, from, related to, or affecting any real property owned or occupied
by the Borrower.
ARTICLE
VI
MISCELLANEOUS
6.1 Remedies
Cumulative; No Waiver. The rights, powers, and remedies of the Lender provided in this Security Agreement and any of the Loan
Documents are cumulative and concurrent, and are not exclusive of any right, power, or remedy available to the Lender. No failure
or delay on the part of the Lender in the exercise of any right, power, or remedy shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, or remedy preclude any other or further exercise thereof, or the exercise
of any other right, power, or remedy.
6.2 Notices.
Notices and communications under this Security Agreement shall be in writing and shall be given by hand-delivery or by nationally-recognized
overnight courier, effective upon receipt, to the addresses set forth in the Purchase Agreement. A party may change its address
by giving written notice to the other party as specified herein.
6.3 Governing
Law. This Security Agreement shall be construed and enforced in accordance with and governed by the substantive laws of the
State of Florida without reference to conflict of laws principles.
6.4 Counterparts.
This Security Agreement may be executed simultaneously in several counterparts. Each counterpart shall be deemed an original.
6.5 Integration;
Amendment. This Security Agreement and the other Loan Documents constitute the sole agreement of the parties with respect
to the subject matter hereof and thereof and supersede all oral negotiations and prior writings with respect to the subject matter
hereof and thereof. No amendment of this Security Agreement, and no waiver of any one or more of the provisions hereof shall be
effective unless set forth in writing and signed by the parties hereto.
6.6 Successors
and Assigns. This Security Agreement (a) shall be binding upon the Borrower and the Lender and, where applicable, their
respective heirs, executors, administrators, successors, and permitted assigns, and (b) shall inure to the benefit of the
Borrower and the Lender and, where applicable, their respective heirs, executors, administrators, successors, and permitted
assigns; provided, however, that the Borrower may not assign its rights or obligations hereunder or any interest herein
without the prior written consent of the Lender, and any such assignment or attempted assignment by the Borrower shall be
void and of no effect with respect to the Lender. The Lender may from time to time sell or assign, in whole or in part, or
grant participations in some or all of the Loan Documents and/or the obligations evidenced thereby. The Borrower
authorizes the Lender to provide information concerning the Borrower to any prospective purchaser, assignee, or
participant.
6.7 Severability
and Consistency. The illegality, unenforceability, or inconsistency of any provision of this Security Agreement or any instrument
or agreement required hereunder shall not in any way affect or impair the legality, enforceability, or consistency of the remaining
provisions of this Security Agreement or any instrument or agreement required hereunder. The Loan Documents are intended to be
consistent. However, in the event of any inconsistencies among any of the Loan Documents, such inconsistency shall not affect
the validity or enforceability of any Loan Document. The Borrower agrees that in the event of any inconsistency or ambiguity in
any of the Loan Documents, the Loan Documents shall not be construed against any one party but shall be interpreted consistent
with the Lender's policies and procedures.
6.8 Consent
to Jurisdiction and Service of Process. The Borrower irrevocably appoints each and every owner, partner, and/or officer of
the Borrower as its attorneys upon whom may be served, by regular or certified mail at the address set forth in the Purchase Agreement,
any notice, process, or pleading in any action or proceeding against it arising out of or in connection with this Security Agreement
or any of the other Loan Documents. The Borrower hereby consents that (i) any action or proceeding against it may be commenced
and maintained in any court within the State of Florida or in any United States District Court in Florida by service of process
on any such owner, partner, and/or officer; and (ii) such courts shall have jurisdiction with respect to the subject matter hereof
and the person of the Borrower and all Collateral for the Indebtedness. The Borrower agrees that any action brought by the Borrower
shall be commenced and maintained only in a court in Duval County, Florida.
6.9 Judicial
Proceedings; Waivers. THE BORROWER AND THE LENDER ACKNOWLEDGE AND AGREE THAT (a) ANY SUIT, ACTION, OR PROCEEDING, WHETHER
CLAIM OR COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE BORROWER OR THE LENDER OR ANY SUCCESSOR OR ASSIGN OF THE BORROWER OR THE LENDER,
ON OR WITH RESPECT TO THIS SECURITY AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE COLLATERAL, OR THE DEALINGS OF THE PARTIES
WITH RESPECT HERETO OR THERETO SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY, AND EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY;
(b) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION, OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE,
OR CONSEQUENTIAL DAMAGES, OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; AND (c) THIS SECTION IS A SPECIFIC AND
MATERIAL ASPECT OF THIS SECURITY AGREEMENT, AND THE LENDER WOULD NOT EXTEND CREDIT IF THE WAIVERS SET FORTH IN THIS SECTION WERE
NOT A PART OF THIS SECURITY AGREEMENT.
SIGNATURE
APPEARS ON FOLLOWING PAGE
IN
WITNESS WHEREOF, the Borrower has executed this Security Agreement, on the day and year first above written.
| |
BORROWER: |
| |
|
| |
STUDIOPLEX CITY RENTALS, LLC |
|
| |
|
|
| |
By: |
Roger
Miguel, Chief Executive Officer |
11
Exhibit 10.4
TERM
PROMISSORY NOTE
| $350,000.00 |
Rincon,
GA |
| Loan
# 91716 |
June
24, 2015 |
FOR
VALUE RECEIVED, Studioplex City Rentals LLC ("Borrower") a Georgia limited liability company, with its principal place
of business located at 135 Goshen Road, Suite 205, Rincon, GA 31326, promises to pay to the order of Loeb Term Solutions LLC,
an Illinois limited liability company, with its principal place of business located at 4131 S. State Street, Chicago, IL 60609
(“Lender”) via ACH transfer as set forth below or by such other method or at such other place as the holder hereof
may from time to time designate in writing, the principal sum of THREE HUNDRED FIFTY THOUSAND NO/100 DOLLARS ($350,000.00), together
with interest from time to time outstanding at the Prime Rate (as defined below) plus ten percent (10%) per annum (the “Effective
Rate”). Interest shall be computed on the actual number of days elapsed, and shall be due and payable in arrears. Interest
shall be computed upon a simple interest basis. Borrower and all endorsers, sureties, guarantors and any other persons liable
or to become liable with respect to the loan evidenced by this Term Promissory Note (the "Loan") are each included in
the term "Obligors" as used in this Term Promissory Note (the “Note”). The Prime Rate shall mean, at any
time, 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 of the three largest U.S. money center commercial banks, as determined by Lender. As of the date hereof, the prime rate
is 3.25%. The interest rate hereunder shall change each time there is a change in the Prime Rate.
Said
principal and interest shall be payable in lawful money of the United States, on the dates and in the amounts specified below,
to wit:
Payments
of principal and interest shall be made in two hundred eight (208) payments as follows: A payment of principal in the amount of
$2,164.39 shall be paid at closing, and thereafter Two Hundred Six (206) consecutive weekly installments of principal and interest
commencing on Wednesday, July 8, 2015 in the amount of $2,164.39 each, and continuing on each Wednesday of each successive week
thereafter through and including June 12, 2019, with the Two Hundred Eighth (208th) and final installment being due
and payable on June 19, 2019 (the “Maturity Date”), said final installment being equal to the outstanding balance
of all principal and accrued interest 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 payment may not fully amortize the Loan over a period of
four (4) years as a result of the variable nature of the interest rate. Accordingly, the Borrower understands and agrees that
the final payment may be substantially higher or lower than the regular weekly payments. In the event that the Prime Rate shall
increase or decrease by one percent (1%) or more, the Lender may require an adjustment in the weekly payment hereunder, which
adjusted amount the Borrower agrees to pay.
All
payments to the Lender shall be made via ACH payment pursuant to the Automatic ACH Debit Agreement, and are payable to the Lender
at the following bank account, or such other account as may be determined by Lender from time to time:
Such
other account is currently
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Borrower
shall pay to Lender a late charge of five percent (5%) of each and every payment not received by Lender on its due date. The minimum
late charge shall, at Lender’s discretion, be $500.00. Such late charges shall be to cover the additional costs in connection
with handling of a late payment. The imposition of a late charge shall not affect the rights of Lender to declare an Event of
Default, or impose a default interest rate, as a result of a late payment.
Borrower
shall pay all amounts owing under this Note in full when due without set-off, counterclaim, deduction or withholding for any reason
whatsoever. 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 at least 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 Michigan or which
is a day on which Lender is otherwise closed for transacting business.
A
default will occur if any of the following situations occur:
| 1. | Payment
of any sums payable pursuant to the terms of this Note are not made; |
| | | |
| 2. | 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 |
| | | |
| 3. | If
the terms and conditions outlined in that certain Security Agreement of even date herewith
(the “Security Agreement”) are not adhered to; |
| | | |
| 4. | If
the terms and conditions outlined in that certain guaranty of the obligations of Borrower
to Lender are not adhered to; |
| | | |
| 5. | If
the terms and conditions outlined in any of the other agreements between Borrower and
Lender are not adhered to; |
| | | |
| 6. | If
a default under any obligation of the Borrower to any other party |
| | | |
| 7. | As
to motor vehicles or construction or earth moving equipment (whether or not registered)
(collectively “Vehicles”): |
| a. | the
failure to maintain required licenses and registrations with all required government
agencies; |
| b. | Use
by operators who are not properly licensed or trained to use such Vehicles; |
| c. | operating
such Vehicles in an unsafe manner, or |
| d. | the
failure to insure such Vehicles with liability, property and casualty insurance, naming
Lender as additional insured on liability insurance and lender loss payee on property
and casualty insurance, in such amounts and with such carriers as are reasonably acceptable
to Lender, |
| 8. | If
Borrower or any guarantor of the obligations of Borrower to Lender becomes subject to
any state or Federal insolvency proceeding (each an “Event of Default”, and
collectively the “Events of Default”). |
Then
or at any time thereafter at the option of Lender, the whole of the principal sum then remaining unpaid hereunder, together with
all other sums owing hereunder, shall immediately become due and payable without notice and Lender shall be entitled to pursue
any and all rights and remedies provided by applicable law and/or under the terms of this Note and the Security Agreement, all
of which shall be cumulative and may be exercised successively or concurrently. Upon the occurrence of any Event of Default, Lender,
at its option, may at any time declare any or all other liabilities of any Obligor to Lender immediately due and payable (notwithstanding
any contrary provisions thereof) without demand or notice of any kind. In addition, Lender shall have the right to set off any
and all sums owed to any Obligor by Lender in any capacity (whether or not then due) against the Loan and/or against any other
liabilities of any Obligor to Lender.
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and after an Event of Default, and regardless of whether the Lender also elects to accelerate the Maturity Date of this Note,
the entire principal remaining unpaid hereunder shall bear an augmented annual interest rate equal to the Effective Rate plus
five percent (5%) per annum. Failure to exercise any and all rights or remedies Lender may have in the event of any such default
shall not constitute a waiver of the right to exercise such rights or remedies in the event of any subsequent 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.
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 or forbearance of any money or other property, 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 interest 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
immediately upon Lender's receipt thereof, 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. During any time that the Loan bears interest (whether by application of this paragraph, the default provisions of this
Note or otherwise), interest shall be computed on the basis of the actual number of days elapsed and the actual number of days
in the respective calendar year.
The
Obligors hereby severally: (a) waive demand, presentment, protest, notice of dishonor, suit against or joinder of any other person,
and all other requirements necessary to charge or hold any Obligor liable with respect to the Loan; (b) waive any right to immunity
from any such action or proceeding and waive any immunity or 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 interpose any set-off or non-compulsory counterclaim or to plead laches or any statute of limitations
as a defense in any such action or proceeding and waive (to the extent lawfully waivable) all provisions and requirements of law
for the benefit of any Obligor now or hereafter in force; (d) agree that all actions or proceedings arising in connection with
this Note shall be tried and litigated only in the state and federal courts located in the County of Oakland, State of Michigan
or at Lender’s option, in any court in which Lender shall initiate legal or equitable proceedings and which has subject
matter jurisdiction over the matter in controversy. Borrower waives any right it may have to assert the doctrine of forum non
conveniens or to object to such venue and hereby consents to any court ordered relief; (e) the Borrower shall be responsible
for the costs, fees (including reasonable attorneys' and paralegals' fees as well as the internal costs of the Lender and its
employees and agents) and expenses incurred by or charged to Lender to correct any default or enforce any provision of this Note,
whether or not litigation is commenced; (f) stipulate that service of process in any such action or proceeding shall be properly
made if mailed by any form of registered or certified mail (airmail if international), postage prepaid, to the address then registered
in Lender's records for the Obligor(s) so served, and that any process so served shall be effective ten (10) days after mailing;
and (g) agree that the death or mental or physical incapacity of any Obligor who is a natural person, or the dissolution or merger
or consolidation or termination of the existence of any Obligor that is a business entity (or if any person controlling such Obligor
shall take any action authorizing or leading to the same), shall at Lender's option, which option may be exercised then or at
any time thereafter, result in the Loan being then due and payable in full. No provision of this Note shall limit Lender's right
to serve legal process in any other manner permitted by law or to bring any such action or proceeding in any other competent jurisdiction.
The Obligors hereby severally consent and agree that, at any time and from time to time without notice, (i) Lender and the owners(s)
of any collateral then securing the Loan may agree to release, increase, change, substitute or exchange all or any part of such
collateral, and (ii) Lender and any person(s) 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; no such release, increase, change, substitution,
exchange, renewal, extension, compromise or modification shall release or affect in any way the liability of any Obligor, and
the Obligors hereby severally waive any and all defenses and claims whatsoever based thereon. 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.
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Except
as hereinafter set forth, the Borrower may not prepay this Note. Under no circumstances may there be a partial pre- payment of
this Note. The Borrower may prepay only the entire unpaid balance of this Note upon payment of a prepayment fee (the “Prepayment
Fee”) as follows:
Beginning
with the date of this Note and continuing through the first year of this Note, the Prepayment Fee shall be three percent (3%)
of then outstanding principal balance of this Note. The Prepayment Fee shall be two percent (2%) of then outstanding principal
balance during the second year of this Note, shall be one percent (1%) of then outstanding principal balance during the third
year of this Note, and shall be zero percent (0%) of then outstanding principal balance during the final year of this Note.
The
Borrower shall also pay to Lender a success fee (the “Success Fee”) in the amount of one percent (1%) of original
principal amount of this Note, to be paid on the earlier of the Maturity Date or the earlier repayment (including prepayment or
acceleration) of this Note. The Success Fee will be waived upon payment in full of all obligations under the Note at the Maturity
Date, provided that Borrower has not been late in making payment under the Note on more than two occasions. This Success Fee shall
be in addition to any Prepayment Penalty.
In
the event that payment of this Note shall be accelerated for any reason whatsoever by the Lender, the Prepayment Fee in effect
as of the date of such acceleration as well as the Success Fee shall be added to the outstanding balance of this Note in determining
the debt for the purposes of any judgment under this Note, or the amount of obligations secured by the Collateral described in
the Security Agreement or other collateral.
In
consideration of the Lender providing the Loan to the Borrower, Borrower hereby agrees that it will, within five (5) 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), and if Lender
advises Borrower that it intends to meet the financial terms set forth in such offer(s), Borrower will be obligated to enter into
an amendment to this Note extending the terms of this Note for at least the term proposed in such other offer(s), and amending
the financial terms set forth in this Note. Notwithstanding the foregoing, Borrower recognizes that this Note can only be terminated
as provided herein. 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.
The
Obligors jointly and severally agree to pay all filing fees and similar charges and all costs incurred by Lender in collecting
or securing or attempting to collect or secure the Loan, including reasonable attorney's fees, whether or not involving litigation
and/or appellate, administrative or Bankruptcy proceedings. Without limiting the generality of the foregoing, if this Note is
collected by or through an attorney at law, then Borrower shall be obligated to pay, in addition to the principal balance hereof
and accrued interest hereon, reasonable attorneys' fees and expenses. Such attorneys' fees shall be based upon the reasonable
rates of Lender's attorneys, and not based upon a percentage of the obligations due under this Note. The Obligors jointly and
severally agree to pay any documentary stamp taxes, intangibles taxes or other taxes (except for federal income taxes based on
Lender's net income) which may now or hereafter apply to this Note or the Loan or any security therefore, and the Obligors jointly
and severally agree to indemnify and hold Lender harmless from and against any liability, costs, attorney's fees, penalties, interest
or expenses relating to any such taxes, as and when the same may be incurred. The Obligors jointly and severally agree to pay
on demand, and to indemnify and hold Lender harmless from and against, any and all present or future taxes, levies, imposts, deductions,
charges and withholdings imposed in connection with the Loan by the laws or governmental authorities of any jurisdiction other
than the State of Michigan or the United States of America, and all payments to Lender under this Note shall be made free and
clear thereof and without deduction therefor, and further indemnify and hold the Lender harmless from any liability of any kind.
This
Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Michigan.
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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. To the extent that the Obligors may lawfully waive any
law that would otherwise invalidate any provision of this Note, each of them hereby waives the same, to the end that this Note
shall be valid and binding and enforceable against each of them in accordance with all its terms.
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 promises, 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. Whenever used in this Note, the term "person"
means any individual, firm, corporation, trust or other organization or association or other enterprise or any governmental or
political subdivision, agency, department or instrumentality thereof. Whenever used in this Note, words in the singular include
the plural, words in the plural include the singular, and pronouns of any gender include the other genders, all as may be appropriate.
Time
shall be of the essence with respect to the terms of this Note. This Note cannot be changed or modified orally. Lender shall have
the right unilaterally to correct patent errors or omissions. Except as otherwise required by law or by the provisions of this
Note, payments received by Lender hereunder shall be applied first against expenses and indemnities, next against interest accrued
on the Loan, and next in reduction of the outstanding principal balance of the Loan, except that from and after any default under
this Note, Lender may apply such payments in any order of priority determined by Lender in its exclusive judgment. Borrower shall
receive immediate credit on payments only if made in the form of a federal wire transfer of cleared funds . Except as otherwise
required by the provisions of this Note, any notice required to be given to any Obligor shall be deemed sufficient if made personally,
if sent via electronic mail to the email address on file with the Lender or if mailed or sent by overnight courier, postage prepaid,
to such Obligor's address as it appears in this Note (or, if none appears, to any address for such Obligor then registered in
Lender's records). Lender may grant participations in all or any portion of, and may assign all or any part of Lender's rights
under, this 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. If Borrower or any other Obligor is a partnership, then all general partners thereof shall
be liable jointly and severally for all obligations under this Note and for all other covenants, agreements, undertakings and
obligations of Borrower in connection with the Loan, notwithstanding any contrary provision of the partnership laws of the State
of Michigan. All of the terms of this 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.
The
proceeds of this Note shall be used exclusively for business purposes and not for household, family or personal use.
LENDER
AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE 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. BORROWER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO LENDER IN EXTENDING CREDIT TO THE BORROWER,
THAT THE LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT BORROWER HAS BEEN REPRESENTED BY
AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE
LEGAL EFFECT OF THIS WAIVER.
This
Note is secured by, inter alia, a security interest in all of the Borrower's personal property, including, without limitation,
all accounts receivable, inventory, equipment and fixtures and all other personal property as more fully set forth in the Security
Agreement dated on or about the date hereof, and the holder of this Note is entitled to the benefits of said security interest.
The
Lender may assign this Note and the Loan from time to time, and the Borrower agrees to make payments as instructed by Lender or
its assignees from time to time.
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WITNESS
the due execution hereof as of the date first above written.
BORROWER: Studioplex
City Rentals LLC
| Signature: |
|
|
| Print
Name: |
Joel
A. Shapiro |
|
| Title: |
Chairman
and CEO |
|
| Date: |
|
|
| STATE
OF |
) |
|
| |
)
SS |
|
| COUNTY
OF |
) |
|
I
HEREBY CERTIFY that on this day, before me, an officer duly authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by Joel A. Shapiro, the Chairman and CEO of Studioplex City
Rentals LLC, a Georgia limited liability company, freely and voluntarily under authority duly vested in him by said limited liability
company.
Joel
A. Shapiro is personally known to me or who has produced __________ as identification.
WITNESS
my hand and official seal in the County and State last aforesaid this __ day of June, 2015.
__________________
Notary
Public
__________________
Typed,
printed or stamped name of Notary Public
My
Commission Expires:
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Exhibit 10.5
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made and entered
into as of the 24th day of June, 2015 by Studioplex City Rentals LLC, a Georgia
limited liability company, with its principal place of business located at 135 Goshen Road, Suite 205, Rincon, GA 31326 ("Debtor”)
in favor of Loeb Term Solutions LLC, an Illinois limited liability company, with its principal place of business located at 4131
S. State Street, Chicago, IL 60609 (“Secured Party”).
In consideration of and as an inducement to
Secured Party making that certain loan to Debtor in the principal amount of Three Hundred Fifty Thousand and 00/100 Dollars ($350,000.00),
as evidenced by that certain Term Promissory Note of even date herewith in the principal amount of Three Hundred Fifty Thousand
and 00/100 Dollars ($350,000.00) (the "Note"), and to secure the payment and performance of the Note and of any and
all obligations and liabilities of Debtor to Secured Party, whether arising in connection with loans, advances, purchases, acquisitions,
or other extensions of credit made to or on behalf of Debtor 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"), which loans, advances, purchases, acquisitions, or extension of credit would not have been made but
for the execution of this Agreement, the parties hereto agree as follows:
Grant of Security Interest.
To secure the payment of the Obligations and for other good and valuable consideration, receipt of which is hereby acknowledged,
Debtor does hereby grant to Secured Party a first continuing security interest in, all of Debtor's right, title and interest in
and to the Collateral.
Collateral. The Collateral subject
to this Agreement consists of all of the following whether now owned or existing or hereafter acquired or arising (collectively,
the "Collateral"): all Inventory (including returned and repossessed items), wherever located; all Equipment (including
fixtures and titled motor vehicles), wherever located, including, without limitation, the equipment described on Exhibit A attached
hereto; all Accounts, Chattel Paper, General Intangibles (including, intellectual property rights and payment intangibles), Letter
of Credit Rights, Negotiable Instruments, Supporting Obligations, Investment Property, Documents and Instruments; all obligations
which give rise to, evidence or relate to any right of Debtor to the payment of money or other forms of consideration of any kind
or for any reason (whether classified under the Michigan UCC as Accounts, Chattel Paper, General Intangibles, or otherwise), including,
without limitation, accounts receivable, letters of credit and the right to receive payment thereunder, tax refunds, insurance
or condemnation proceeds, notes, drafts, or other instruments, documents, rights to payment under any guaranty, indemnity, security
agreement, mortgage or lien in favor of Debtor, and all other debts, obligations and liabilities in whatever form now or hereafter
owing to Debtor from any person or entity, and all proceeds of any of the foregoing (collectively, "Receivables"); all
rights of Debtor arising under any now existing or hereafter entered into agreement, lease, license, or other contractual arrangement
between Debtor and any other person or entity (collectively, "Contract Rights"); all Securities (as defined in Article
8 of the Michigan UCC in effect on the date hereof) of Debtor, whether certificated or uncertificated, whether equity, debt or
otherwise and whether or not publicly traded; all bank accounts and brokerage accounts of Debtor, including without limitation,
deposit accounts, together with all cash, cash equivalents, notes, bonds, treasury bills and certificates of deposit deposited
or on account therein; all actions, causes of action and other claims of Debtor whether now existing or hereafter arising; all
books and records relating to any of the foregoing; and all proceeds, replacements and products of, and additions and accessions
to, any and all of the foregoing property, and, to the extent not otherwise included, all proceeds of condemnation, casualty or
other types of insurance (whether or not the Secured Party is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of condemnation, loss or damage to or otherwise with respect to any of said property (collectively, "Proceeds").
The Collateral shall also include all patents, trademarks, trade names and trade processes used by Debtor and the goodwill of
any business conducted by Debtor.
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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.
UCC Terms. All terms defined in the Uniform Commercial
Code of the State of Michigan, as amended (the " Michigan UCC") as in effect on the date hereof are used herein as so
defined, unless the context requires a different meaning.
Terms and Conditions. Debtor further agrees to all
of the terms and conditions attached hereto and incorporated herein by reference.
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.
IN WITNESS WHEREOF, the undersigned has executed this Agreement
on the day and year first above written.
DEBTOR: Studioplex City Rentals LLC
| Signature: |
|
|
| Print
Name: |
Joel
A. Shapiro |
|
| Title: |
Chairman
and CEO |
|
| STATE
OF: |
) |
|
| |
)
SS |
|
| COUNTY
OF: |
) |
|
I HEREBY CERTIFY that on this day, before
me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument
was acknowledged before me by Joel A. Shapiro, the Chairman and CEO of Studioplex City Rentals LLC, a Georgia limited liability
company, freely and voluntarily under authority duly vested in him by said limited liability company.
Joel A. Shapiro is personally
known to me or who has produced
as identification. WITNESS my hand and official seal in the County and State last aforesaid this day
of June, 2015.
Notary Public
Typed, printed or stamped name of Notary Public
My Commission Expires:
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SECURED PARTY:
Loeb Term Solutions LLC
| Signature: |
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| Print
Name: |
James L. Newman
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| Title: |
Manager
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| Date:
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| STATE
OF: |
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)
SS |
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| COUNTY
OF: |
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I HEREBY CERTIFY that on this day, before
me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument
was acknowledged before me by James L. Newman, the Manager, of Loeb Term Solutions LLC a Illinois limited liability company, freely
and voluntarily under authority duly vested in him by said limited liability company.
James L. Newman is personally known to me
or who has produced as
identification.
WITNESS my hand and official seal in the County and State last
aforesaid this day of June, 2015.
Notary Public
Typed, printed or stamped name of Notary Public
My Commission Expires:
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Terms and Conditions
| 1. | Perfection
of Security Interest. The security interest granted hereby shall at all times be
a valid and perfected first priority security interest enforceable against Debtor and
all third parties, securing the Obligations in accordance with the terms of this Agreement,
unless otherwise agreed to by Secured Party and as may be provided in the Intercreditor
Agreement. |
| 2. | 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 take all further
action, that may be necessary or appropriate, or that Secured Party may reasonably request,
in order to perfect against Debtor and all third parties, in any jurisdiction, and in
order to protect and continue, any security interest granted or purported to be granted
hereby or to enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, and shall promptly give to the Lender evidence satisfactory
to Secured Party of such action. Without limiting the generality of the foregoing, Debtor
shall (i) mark conspicuously each Document, Chattel Paper, Negotiable Instruments and
Instrument, and at the request of Secured Party, each of its records pertaining to the
Collateral, with a legend, in form and substance satisfactory to Secured Party, indicating
that such Document, Chattel Paper, Instrument, Negotiable Instruments or Collateral is
subject to the security interest granted hereby; (ii) upon the request of Secured Party, deliver
and pledge Secured Party any Promissory Note, Instrument, Chattel Paper, Negotiable Instruments or Documents 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 form and substance satisfactory to Secured Party; (iii) deliver certificates of title and execute all documentation
in order to reflect Secured Party’s lien and security interest on titled motor vehicles and vessels, and (iv) execute and
file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary
or appropriate, or as Secured Party may request, in order to perfect and preserve the security interest in all the Collateral
granted or purported to be granted hereby. Debtor hereby authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relating to all or any part of the Collateral without the signature of Debtor where permitted
by law. Debtor shall, upon request by Secured Party, deliver to Secured Party assignments, in a form acceptable to Secured Party,
of specific Collateral or groups or types of Collateral, and of monies due or to become due thereunder. Debtor shall furnish to
Secured Party from time to time statements and schedules further identifying and describing the Collateral and such other reports
and information in connection with the Collateral as Secured Party may reasonably request, all in reasonable detail satisfactory
to Secured Party in its sole discretion. Secured Party may at any time and from time to time, file financing statements, continuation
statements and amendments thereto that describe the Collateral as all assets of the Borrower or words of similar effect and which
contain any other information required by the Uniform Commercial Code for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether the Borrower is an organization, the type of organization and
any organization identification number issued to the Borrower. The Borrower agrees to furnish any such information to Secured
Party promptly upon request. Any such financing statement, continuation statements or amendments may be filed at any time in any
jurisdiction, take such steps as Secured Party may reasonably request for Secured Party (a) to obtain an acknowledgment, in form
and substance satisfactory to Secured Party, of any bailee having possession of any of the Collateral that the bailee holds such
Collateral for Secured Party, (b) to obtain “control” of any investment property, deposit accounts, letter-of-credit
rights or electronic chattel paper (as such terms are defined in the Uniform Commercial Code with corresponding provisions in
Sections 9-104, 9-105, 9-106 and 9-107 relating to what constitutes “control” for such items of Collateral), with
any agreements establishing control to be in form and substance satisfactory to Secured Party, and (c) otherwise to insure the
continued perfection and priority of Secured Party’s security interest in any of the Collateral and of the preservation
of its rights therein. |
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| 3. | Insurance.
Debtor at all times should have the Collateral insured in the Debtor’s name and
in the name of the Secured Party 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 Secured Party. Each policy shall include a provision for Secured Party 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 Secured Party as additional insured,
loss payee and lender’s loss payee in a manner acceptable to Secured Party. Debtor
shall execute and deliver to Secured Party simultaneously herewith and at any other time
hereafter such assignments of policies of insurance, as Secured Party shall reasonably
require. All premiums shall be paid by Debtor and the policies shall be delivered to
Debtor and Certificate of Insurance shall be delivered to Secured Party. If Debtor fails
to do so, Secured Party may (but shall not be required) procure such insurance at the
Debtor’s expense. DEBTOR ALSO GRANTS PERMISSION FOR SECURED PARTY TO SPEAK DIRECTLY
WITH INSURANCE AGENT AS REQUIRED TO CONFIRM PROPER INSURANCE IS IN PLACE AND IT IS CURRENT. |
| 4. | Inspection;
Books and Records. Debtor shall at all times keep accurate and complete records of
the Collateral, and, at Debtor’s expense, at any time and without hindrance or
delay, permit Secured Party 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 and discuss with its principal officers and auditors its business,
procedures, assets, liabilities, financial positions, results of operations and business
prospects. Debtor shall keep its records concerning the Collateral at its chief executive
office or at such other location as shall have been notified to Secured Party upon not
less than thirty (30) days written notice. The cost of all such inspections shall be
borne by the Debtor. The Secured Party shall have the right to have the Equipment appraised
on an annual basis at a cost of $2,500.00 (“Appraisal Expense”). Prior to
the occurrence of a Default, Secured Party will give Debtor seventy-two (72) hours prior
notice and the inspection will only be during normal business hours. Borrower authorizes
Secured Party to debit the amount of the Appraisal Expense from Borrower’s bank
account via ACH transfer as more fully set forth in the ACH Authorization Agreement.
In addition, at all times Secured Party shall have the right to verify all Receivables,
whether in its name or using a fictitious name. |
| 5. | Maintenance
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. |
| 6. | Ownership
and Liens. Debtor shall maintain valid title to the Collateral free and clear of
any liens or encumbrances other than in favor of Secured Party and 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, without the prior written consent of Secured
Party. |
| 7. | Taxes.
Debtor shall promptly pay when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Collateral except to the
extent the validity thereof is being contested in good faith by Debtor, and failure to
do so shall be a default hereunder, as with the failure to observe all of the other terms
and conditions of this Agreement. |
| 8. | 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 Inventory
in the ordinary course of business. |
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| 9. | Chief
Executive Office, Location of Collateral, Trade Names. Debtor represents, warrants
and covenants that: (i) Debtor’s chief executive office and the books and records
relating to the Collateral are located at Debtor’s chief executive office 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 notified to Secured Party
in writing; and (iii) Debtor will not move its chief executive office or such books and
records, or transact business under any new trade names, without giving Secured Party
(30) days prior written notice thereof or without having taken all action required by
Section 2 with respect to any affected Collateral; and (iv) Lender is aware the Borrower
is moving the equipment from the Florida location to the Georgia location once the purchase
agreement between Seller and Buyer closes. Borrower will complete the move within 30
days of funding and includes all the equipment shown on the Exhibit A of this Security
Agreement. Borrower is required to: |
| a. | Have
the machinery mover, name Borrower as additional insured, loss payee and lender loss
payee on its insurance policy and provide a copy of this to Lender before equipment is
moved. |
| b. | Complete
the move and have all the equipment at the new location within 30 days of funding. |
| c. | Lender
will required an inspection of the equipment once it is at the Georgia location to confirm
the equipment move was completed. |
| 10. | Collection
of Receivables. Except as otherwise provided in this Section, Debtor shall continue
to collect, at its own expense, all amounts due or to become due to Debtor under the
Receivables. In connection with such collections, Debtor may take (and, at Secured Party’s
direction, shall take) such action as Debtor or Secured Party may deem necessary or advisable
to enforce collection of the Receivables; provided that Secured Party shall have the
right at any time, whether or not a default shall have occurred and be continuing, upon
written notice to Debtor of its intention to do so, to notify the account debtors or
obligors under any Receivables of the assignment of such Receivables to Secured Party
and to direct such account debtors or obligors to make payment of all amounts due or
to become due to Debtor thereunder directly to Secured Party and, upon such notification
and at the expense of Debtor, to enforce collection of any such Receivables, and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to the same
extent as Debtor might have done. After receipt by Debtor of the notice from Secured
Party referred to in the proviso to the preceding sentence, (i) all amounts and proceeds
(in whatever form) received by Debtor in respect of the Receivables shall be received
in trust for the benefit of Secured Party, shall be segregated from other funds of Debtor
and shall be forthwith paid over to Secured Party in the same form as so received (with
any necessary endorsement) to be held as Collateral, and either (A) released to Debtor
so long as no Default shall have occurred and be continuing, or (B) if a Default shall
have occurred and be continuing, applied against the Obligations in such order as Secured
Party shall elect in its sole discretion, and (ii) Debtor shall not adjust, settle or
compromise the amount or payment of any Receivable, or release wholly or partly any account
debtor or obligor thereof, or allow any credit or discount thereon without the prior
written consent of Secured Party. Debtor hereby appoints any officer or agent of Secured
Party as Debtor’s true and lawful attorney-in-fact with power to endorse the name
of the Debtor upon any notices, checks, drafts, money orders or other instruments of
payment or Collateral which may come into possession of Secured Party; to sign and endorse
the name of Debtor upon any invoices, freight or express bills, bills of lading, stored
or warehouse receipts, drafts against account debtors, assignments, verifications and
notices in connection with accounts; and after the occurrence of an event of Default,
to give written notice to such office and officials of the United States Postal Service
to effect such change or changes of address so that all mail addressed to Debtor may
be delivered directly to Secured Party (Secured Party will return all mail not related
to the Obligors or the Collateral); granting unto Debtor’s said attorney full power
to do any and all things necessary to be done with respect to the above transaction as
fully and effectively as Debtor might or could do so, and hereby ratifying all its said
attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney
shall be irrevocable for the term of this Agreement and all transactions hereunder. |
| 11. | Secured
Party’s Duties and Powers. If Debtor fails to perform any covenant or agreement
contained herein, Secured Party may (but shall not be obligated to) perform, or cause
performance of, such covenant or agreement, and the expenses of Secured Party incurred
in connection therewith shall be payable by Debtor. The powers conferred on Secured Party
hereunder are solely to protect Secured Party’s interest in the Collateral and
shall not impose any duty upon Secured Party to exercise any such powers. Except for
the safe custody of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, Secured Party shall have no duty as to any Collateral or as to the taking of any necessary steps
to preserve rights against prior parties or any other rights pertaining to any Collateral. |
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| 12. | Default.
In the event that Debtor shall fail to pay any amounts due under the Note or there shall
occur a default under the Note and such failure or default shall not have been cured
within any grace period applicable thereto; or Debtor shall fail to pay any other Obligations
when due or there shall occur a default under any other Obligations and such failure
or default shall not have been cured within any grace period applicable thereto; or Debtor
shall fail to pay any other amount owed to Secured Party when due or there shall occur
a default under any other contract, instrument or agreement with Secured Party and such
failure or default shall not have been cured within any grace period applicable thereto;
or Debtor shall fail to observe or perform any of the other material covenants, agreements
or conditions contained in this Agreement; or any representation or warranty made by
Debtor herein shall prove to have been false in any material respect as of the time when
made or given; or Debtor or any guarantor of the Debtor’s obligations to Secured
Party (“Guarantor”) shall become insolvent or take or fail to take any action
which constitutes an admission of inability to pay its debts as they mature; or Debtor
or Guarantor shall make an assignment for the benefit of creditors, file a petition in
bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver
or any trustee for Debtor or Guarantor or a substantial part of its respective assets,
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 n effect; or if there shall have been filed any such petition or application,
or any such proceeding shall have been commenced against Debtor or Guarantor, in which
an order for relief is entered or which remains undismissed for a period of thirty (30)
days or more; or Debtor or Guarantor by any act or omission shall indicate its consent
to, approval of or acquiescence in any such petition, application or proceeding or order
for relief or the appointment of a custodian, receiver or any trustee for it or any substantial
part of any of its properties, or shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of thirty (30) days or more; or Debtor
or Guarantor shall adopt a plan of liquidation of its assets; or Debtor or Guarantor
shall liquidate or dissolve, or merge into or consolidate with or into any other corporation
or entity, if such merger or consolidation would result in a material change in the nature
of Debtor’s business as currently conducted (each of the foregoing being hereinafter
referred to as a “Default”), then Secured Party may declare all Obligations
immediately due and payable, whether or not such Obligations would be due and payable
under the terms thereof, and may exercise any and all rights and remedies provided by
this Agreement, by the Michigan UCC, in law or at equity, including the right to obtain
an injunction against Debtor or a decree of specific performance. |
| 13. | Set-Off.
In addition to any other rights or remedies of Secured Party hereunder, Secured Party
may at any time and from time to time, without demand or notice, set-off against and
apply any accounts, items and monies in the possession of Secured Party or payable by
Secured Party to Debtor to the Obligations when and as due and payable. |
| 14. | Repossession
of Collateral. After a Default, Secured Party may at any time and from time to time,
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 Debtor,
take physical possession of any items of Collateral and maintain such possession on Debtor’s
premises or move the same or any part thereof to such other places as Secured Party shall
choose without being liable to Debtor on account of any losses, damage or depreciation
that may occur as a result thereof so long as Secured Party shall act reasonably and
in good faith, dispose of all or any part of the Collateral on any premises of Debtor,
require Debtor to assemble and make available to Secured Party 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. |
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| 15. | Marshaling,
etc. Secured Party shall not be required to make any demand upon or pursue or exhaust
any of its rights or remedies against Debtor or others with respect to the payment of
the Obligations, and shall not be required to marshall the Collateral or to resort to
the Collateral in any particular order and all of the rights of Secured Party hereunder
shall be cumulative. To the extent that it lawfully may, Debtor hereby agrees to waive,
and does hereby absolutely and irrevocably waive and relinquish the benefit and advantage
of, and does hereby covenant not to assert against Secured Party, any valuation, stay,
appraisement, extension or redemption laws now existing or which may hereafter exist
which, but for this provision, might be applicable to any sale made under the judgment,
order or decree of any court, or privately under the power of sale conferred by this
Agreement or in respect of the Collateral. To the extent if lawfully may, without limiting
the generality of the foregoing, Debtor hereby agrees that it will not invoke or utilize
any law which might cause delay in, or impede, the enforcement of Secured Party’s
rights under this Agreement, and hereby waives the same. |
| 16. | Sale.
Any item of the Collateral may be sold for cash or other value in any number of lots
at public auction or private sale without demand or notice (excepting only that Secured
Party 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 each of
Debtor and Secured Party hereby agrees to be reasonable). At any sale or sales of the
Collateral (except at private sale) Secured Party 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, exploit, and dispose of such property and rights without further accountability
to Debtor except for the proceeds of such sale or sales. Debtor will execute and deliver,
or cause to be executed and delivered, such instruments, documents, registration statements,
assignments, waivers, certificates and affidavits, and supply or cause to be supplied
such further information and take such further action as Secured Party shall require
in connection with such sale. Debtor shall be responsible for all costs of sale or other
disposition. |
| 17. | Application
of Proceeds. The proceeds of all sales and collections hereunder, and any other moneys
(including any cash contained in the Collateral) the application of which is not otherwise
herein provided for, shall be applied against the Obligations in such order as Secured
Party shall elect in its sole discretion. |
| 18. | Course
of Dealing. No course of dealing between Debtor and Secured Party shall operate as
a waiver of any rights of Secured Party under this Agreement or in respect of the Collateral
or the Obligations. No delay or omission on the part of Secured Party in exercising any
right under this Agreement in respect of the Collateral or any Obligations shall operate
as a waiver of such rights or any other right hereunder. A waiver on any one occasion
shall not be construed as a bar to waiver of any right and/or remedy on any future occasion.
No waiver shall be effective unless it is in writing and signed by Secured Party. |
| 19. | Discharge.
If Debtor shall absolutely and irrevocably pay in full and satisfy the Obligations, then
this Agreement and the rights hereby granted shall cease and be void, and at the request
of Debtor, and at its expense, Secured Party shall release and discharge all of the Collateral
without recourse against Secured Party and to that end shall execute and deliver to Debtor,
at Debtor’s own expense, such releases, reassignments, and other documents (or
cause the same to be done) as Debtor shall reasonably request, and Secured Party shall
pay over to Debtor any money and deliver to it any other property then held by it as
Collateral (or cause the same to be done). The receipt of Debtor for the Collateral so
delivered shall be a complete and full acquittance therefor, and Secured Party shall
thereafter be discharged from any liability or responsibility therefor. |
| 20. | No
Waiver; Cumulative Remedies. No failure on the part of Secured Party to exercise,
and no delay on the part of Secured Party in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall ay single or partial exercise of any such
right, power or remedy by Secured Party 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 Secured Party, whether
at law, in equity or otherwise. Debtor hereby waives any right Debtor may have to cause
Secured Party to choose any remedy and pursue such remedy to fruition, and agrees and
consents that Secured Party may simultaneously and contemporaneously pursue two or more
of the several remedies available to Secured Party, all of which are agreed to be concurrent
and not alternative in any way. |
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| 21. | Expenses
and Indemnity. Debtor shall upon demand pay to Secured Party the amount of any and
all reasonable expenses, including without limitation, the reasonable fees and disbursements
of Secured Party’s counsel and of any experts and agents, which Secured Party may
incur in connection with the preparation, administration and enforcement of this Agreement,
or the sale of, collection from, or other realization upon, any of the Collateral, or
the exercise or enforcement of any of the rights of Secured Party hereunder, or the failure
by Debtor to perform or observe any of the provisions hereof. Debtor further agrees to
assume liability for and does hereby agree to indemnify, protect, save and keep harmless
Secured Party and its agents and servants, 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 Secured Party or its agents and
servants, in any way relating to or growing out of this Agreement or the Collateral (including
without limitation, enforcement of this Agreement or disposition of the Collateral),
except claims, losses or liabilities resulting solely from Secured Party’s gross
negligence or willful misconduct. |
| 22. | Bankruptcy.
The parties agree that Debtor has substantial duties of performance apart from its mere
financial obligations under this Agreement, the Note and the other Loan Documents and
that parties other than the Debtor could not adequately and fully perform the covenants
to be performed by the Debtor in this Agreement. The Parties also agree that this Agreement
is an Agreement for the making of loans and for the extending of debt financing or financial
accommodations. No assumption of or assignment of this Agreement shall be allowed in
bankruptcy. Should an assumption of or assignment of this Agreement be permitted is violation
of this covenant, the parties agree that Secured Party will not have adequate assurance
of performance unless and until Secured Party is allowed access to adequate financial
and other information to satisfy itself that the trustee or proposed assignee is fully
able to assume the financial and personal covenants of Debtor under this Agreement, in
full accordance with its terms, and that sufficient Collateral is pledged and sufficient
bonds or letters of credit are posted by the bankruptcy trustee or proposed assignee
to guarantee performance of such obligations. The parties further agree that the definition
of the term “adequate assurance” as set forth in Section 365(b) (3) of the
Bankruptcy Code of 1978, as amended, shall be applicable directly or by analogy to any
determination of adequate assurance in connection with this Agreement. In addition, if
at any time payment of any amounts paid under any of the Loan Documents is rescinded
or must otherwise be restored or returned by Secured Party upon the insolvency, bankruptcy
or reorganization of Debtor or under any other circumstances, this Agreement and the
other Loan Documents shall continue to be effective or shall (if previously terminated)
be reinstated, as the case may be, as if such payment had not been made, notwithstanding
the release of this Agreement or any other Loan Documents of public record. |
| 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. This Agreement shall
be governed by and construed in accordance with the law of the State of Michigan and
shall bind and inure to the benefit of the parties hereto and their respective successors
and assigns. Neither this Agreement nor any term hereof may be amended orally, nor may
any provision hereof waived orally but only by an instrument in writing signed by Secured
Party 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 Michigan, except as required by mandatory provisions of law and except to the extent
that the validity or perfection of the security interest hereunder, or remedies hereunder,
in respect of any particular Collateral are governed by the law of a jurisdiction other
than the State of Michigan. 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. This Security Agreement may
be assigned by Secured Party to a third party in connection with an assignment of the
Obligations, and the Debtor consents to such assignment and agrees that this Security
Agreement will be in favor of the assignee(s) upon assignment, without any defenses,
counterclaims or setoffs of any kind whatsoever. |
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| 24. | Release.
In recognition of the Secured Party’s right to have its attorneys’ fees and
other expenses incurred in connection with this Agreement secured by the collateral,
notwithstanding payment in full of all Obligations by Debtor, Secured Party shall not
be required to file terminations or satisfactions of any of Secured Party’s liens
on the collateral unless and until Debtor and all Guarantors shall have provided general
releases in favor of Secured Party, in form satisfactory to Secured Party. Debtor understands
that this provision constitutes a waiver of its rights under Section 9-513 of the Uniform
Commercial Code. |
SIGNATURES ON THE NEXT PAGE
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DEBTOR: Studioplex City Rentals LLC
| Signature: |
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|
| Print
Name: |
Joel
A. Shapiro |
|
| Title: |
Chairman
and CEO |
|
| Date: |
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| STATE
OF |
) |
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| |
)
SS |
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| COUNTY
OF |
) |
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I HEREBY CERTIFY that on this day, before
me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument
was acknowledged before me by Joel A. Shapiro, the Chairman and CEO of Studioplex City Rentals LLC, a Georgia limited liability
company, freely and voluntarily under authority duly vested in him by said limited liability company.
Joel A. Shapiro is personally known to me
or who has produced as
identification.
WITNESS my hand and official seal in the County and State last
aforesaid this day of June, 2015.
Notary Public
Typed, printed or stamped name of Notary Public
My Commission Expires:
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SECURED PARTY:
Loeb Term Solutions LLC
| Signature: |
|
|
| Print
Name: |
James L. Newman
|
|
| Title: |
Manager
|
|
| Date:
|
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| STATE
OF |
) |
|
| |
)
SS |
|
| COUNTY
OF |
) |
|
I HEREBY CERTIFY that on this day, before
me, an officer duly authorized in the State aforesaid and in the County aforesaid to take acknowledgments, the foregoing instrument
was acknowledged before me by James L. Newman, the Manager of Loeb Term Solutions LLC, an Illinois limited liability company,
freely and voluntarily under authority duly vested in him by said limited liability company.
James L. Newman is personally known to me
or who has produced as
identification.
WITNESS my hand and official seal in the County and State last
aforesaid this day of June, 2015.
Notary Public
Typed, printed or stamped name of Notary Public
My Commission Expires:
| CONFIDENTIAL |
|
| 6/24/15 |
| Studioplex - Security Agreement - 2015 06 24 v1 |
| |
STUDIOPLEX
|
Printed
@ 1:54 PM |
| |
EQUIPMENT
LIST |
On
6/24/2015 |
| |
-
EXHIBIT A - |
|
| File
Name is |
Equipment
List |
| Studioplex
Equip List - Exhibit A - 2015 06 24 v1 |
Page
14 of 49 |
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