DEMAND PROMISSORY NOTE
Exhibit 10.56
This DEMAND PROMISSORY NOTE (this
“Note”)
is entered into by and between Global Digital Solutions, Inc.
(“Borrower”),
and Vox Business Trust, LLC, a Massachusetts limited liability
company (“Lender,”
and together with Borrower, the “Parties”),
as of December __, 2017 (the “Effective
Date”).
Preliminary Statement
A.
Borrower and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(“▇▇▇▇▇▇”)
are parties to that certain consulting agreement entered into by
letter dated May 31, 2016, a copy of which is attached as
Exhibit
C (the
“Consulting
Agreement”), to which,
the Parties acknowledge and agree that Lender is an intended third
party beneficiary thereof.
B.
Pursuant to the Consulting Agreement, Borrower is
obligated to pay ▇▇▇▇▇▇ ▇▇▇▇ consideration in the amount of five
percent (5%) of the Resolution Progress Funding (as defined in the
Consulting Agreement) amount (the “Resolution
Progress Funding Payment”), on the date the GSRN Purchase Agreement
(defined below) is executed by the parties thereto (the
“Resolution
Progress Funding Date”).
C.
Pursuant to the Consulting Agreement, Borrower is
obligated to pay ▇▇▇▇▇▇ ▇▇▇▇ consideration in the amount of five
percent (5%) of the Resolution Funding (as defined in the
Consulting Agreement) amount (the “Resolution
Funding Payment”) on the
date the Resolution Funding (which, for the avoidance of doubt, are
the proceeds that are awarded to Borrower through a settlement or
judgment in the GDSI v. Rontan proceeding (the
“Lawsuit”))
is funded (the “Resolution
Funding Date”).
D.
Pursuant to the Consulting Agreement, Borrower is
obligated to pay ▇▇▇▇▇▇ a monthly retainer of ten thousand U.S.
dollars ($10,000) (the “Retainer
Payments”), beginning
with the execution of the Consulting Agreement and terminating on
the Resolution Funding Date.
E.
As
of the Effective Date, Borrower has not paid the Resolution
Progress Funding Payment or any Retainer Payments.
F.
From
and after the Effective Date, Borrower shall pay all future
Retainer Payments on a monthly basis pursuant to and as set forth
in the Consulting Agreement.
G.
As
of the Effective Date, the outstanding due and payable amount of
the Resolution Progress Funding Payment is two hundred eighty five
thousand U.S. dollars ($285,000).
H.
As
of the Effective Date, the outstanding due and payable amount of
Retainer Payments is two hundred thousand U.S. dollars
($200,000).
I.
As
of the Effective Date, the aggregate outstanding, due, and payable
amounts of the Resolution Progress Funding Payment and outstanding
Retainer Payments is four hundred eighty five thousand U.S. dollars
($485,000).
Agreement
Now,
therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as
follows.
1. Definitions.
Capitalized terms used herein shall
have the meanings set forth in Exhibit
A. The preliminary statements
above are hereby acknowledged and agreed to by the Parties and
incorporated into this Note.
2. Due
on Demand.
2.1 Payment upon Demand.
FOR VALUE RECEIVED, Borrower hereby
unconditionally promises to pay to the order of Lender or its
assignees, the principal sum of four hundred eighty five thousand
U.S. dollars ($485,000), or such larger or smaller amount from time
to time outstanding hereunder, together with all accrued interest
thereon and all other amounts due hereunder (the
“Loan”),
ON DEMAND, as provided in this Note; provided, that unless a Default has occurred, Lender shall
voluntarily refrain from making such demand prior to the date of
the Resolution Funding (the “Resolution
Funding Date”);
provided,
further, that Lender’s so
voluntarily refraining shall not be construed to qualify, define,
or otherwise limit Lender’s right, power, or ability, at any
time and for any reason, under applicable Law, to require full
payment of the Loan, all Additional Principal Amounts, all accrued
and unpaid interest and all other amounts payable under this Note
ON DEMAND.
2.2 Additional Principal
Amounts. From and after the
Effective Date, (a) if Borrower fails to make payment of any
Retainer Payment when due, in addition to all other rights of
Lender hereunder and under applicable Law, the amount of each such
unpaid Retainer Payment shall automatically be added to the
principal amount of the Loan hereof and (b) if Borrower has
not paid the Loan and all then-outstanding Additional Principal
Amounts in whole as of the Resolution Funding Date, an amount equal
to (x) ten percent (10%) of the sum of (i) the
then-outstanding principal amount of the Note, including the Loan
and all then-outstanding Additional Principal Amounts and
(ii) all accrued interest thereon plus (y) Lender’s five
percent (5%) portion of the total aggregate Resolution Funding
Payment shall automatically be added to the principal balance
hereof. For the avoidance of doubt, as an example and to provide
clarity with respect to this sub-clause (y), if Borrower receives
$100,000,000 in Resolution Funding Payment, the principal balance
of this Note shall automatically and without any further action on
the part of any party be increased by $5,000,000 (i.e.,
Lender’s 5% portion of the total aggregate Resolution Funding
Payment). Each amount added to the principal of the Note pursuant
to this Section 2.2
shall be referred to as an
“Additional
Principal Amount.”
2.3 Optional Prepayment; Best
Efforts; Lender’s Rights to Demand Payment.
Notwithstanding any terms in this Note
to the contrary:
(a) Borrower
may prepay the Loan and/or all Additional Principal Amounts, in
whole or in part, at any time or from time to time without penalty
or premium, prior to receipt of demand from the Lender, by paying
the principal amount to be prepaid together with accrued interest
thereon (subject to the provisions of
Section 4.6) to the
date of prepayment (each such payment a “Voluntary
Payment”);
(b) Borrower
shall use best efforts to pay all amounts due under this Note,
during the period between the Resolution Progress Funding Date and
the Resolution Funding Date; and
(c) the
enumeration in this Note of specific obligations of Borrower to
Lender and/or conditions to the repayment of funds under this Note
shall not be construed to qualify, define, or otherwise limit
Lender’s right, power, or ability, at any time and for any
reason, under applicable Law, to require full payment of the Loan
and all accrued and unpaid interest and all other amounts payable
under this Note, including but not limited to, Additional Principal
Amount, ON DEMAND.
2.4 Effective Date
Prepayment. Notwithstanding
anything herein to the contrary, Borrower shall make mandatory
prepayments of the Loan in the following amounts and at the
following times:
|
Amount
|
Date of Mandatory Prepayment(each, a “Prepayment
Trigger”)
|
|
$1,000.00 (one thousand dollars)
|
Effective Date
|
|
$50,000.00 (fifty thousand dollars)
|
The date on which the judge presiding over the Lawsuit issues a
ruling or decision in which the Lawsuit survives a motion to
dismiss
|
|
$50,000 (fifty thousand dollars)
|
The date on which discovery closes with respect to the
Lawsuit
|
|
$100,000 (one hundred thousand dollars)
|
The date on which the judge presiding over the Lawsuit issues a
ruling or decision in which the Lawsuit survives a motion for
summary judgment on the claims
|
Each
such payment shall be due on the date of each applicable Prepayment
Trigger and shall be paid to Lender on or within five (5) Business
Days of the applicable Prepayment Trigger and all such payments
shall be made in accordance with Section 3. These good faith
payments represent evidence by Borrower that it is Borrower’s
intention to pay down the balance of this Note in an expedite
manner.
3. Payments.
Payments made under this Note shall be
in accordance with the following:
3.1 Manner of Payments.
All payments of interest, principal,
and all other amounts shall be made in lawful money of the United
States of America by wire transfer of immediately available funds
to Lender’s account at a bank specified by Lender in writing
to Borrower from time to time.
3.2 Application of Payments.
All payments made hereunder, including
insufficient payments, shall be credited, regardless of their
designation by Borrower, first to collection expenses due
hereunder, then to outstanding late charges, then to interest due
and payable but not yet paid, then to any outstanding principal
that is an Additional Principal Amount, and the remainder, if any,
to outstanding principal that is the Loan.
3.3 Business Day Convention.
Whenever any payment to be made
hereunder shall be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day, and such
extension will be taken into account in calculating the amount of
interest payable under this Note.
3.4 Evidence of Debt.
Lender is authorized to record on the
grid attached hereto as Exhibit B
the Loan, each Additional Principal
Amount, and each payment or prepayment thereof. The entries made by
Lender shall, to the extent permitted by applicable Law, be prima
facie evidence of the existence and amounts of the obligations of
Borrower therein recorded; provided, however, that the failure of Lender to record such
payments or prepayments, or any inaccuracy therein, shall not in
any manner affect the obligation of Borrower to repay (with
applicable interest) the entirety of the principal amount hereunder
(including the Loan and any Additional Principal Amounts) and all
other amounts due hereunder in accordance with the terms of this
Note.
4. Interest.
Interest under this Note shall be as
follows:
4.1 Interest Rate.
Except as otherwise provided herein,
the unpaid principal amount of this Note (including the Loan and
all Additional Principal Amounts) outstanding hereunder shall bear
interest at the Applicable Rate from the Effective Date (and, in
the case of each Additional Principal Amount, the date such
Additional Principal Amount is added to the principal) until the
date on which the principal balance of this Note is paid in full,
whether on demand, by prepayment, or otherwise.
4.2 Default Interest.
If any amount payable hereunder is not
paid promptly upon, and in any event within one (1) Business Day
following, demand (without regard to any applicable grace periods),
such overdue amount shall bear interest at the Default Rate from
the date of such non-payment until such amount is paid in
full.
4.3 Interest Payable.
Interest, at the Applicable Rate or
the Default Rate, as applicable, shall be payable ON DEMAND.
Borrower may make whole or partial interest payments at any time
prior to demand, without penalty and without affecting any other
provisions of this Note.
4.4 Computation of Interest.
All computations of interest shall be
made on the basis of a year of 365/366 days, as the case may be,
and the actual number of days elapsed. Interest shall accrue on the
Loan from the Effective Date, and on each Additional Principal
Amount from the date such Additional Principal Amount is added
pursuant to Section 2.2, and shall
not accrue on the Loan or any Additional Principal Amount for the
day on which it is paid.
4.5 Interest Rate
Limitation. If, at any time and
for any reason whatsoever, the interest rate payable on the Loan or
any Additional Principal Amount shall exceed the maximum rate of
interest permitted to be charged by Lender to Borrower under
applicable Law, that portion of each sum paid attributable to that
portion of such interest rate that exceeds the maximum rate of
interest permitted by applicable Law shall be deemed a voluntary
prepayment of principal.
4.6 Forgiveness of Interest upon
Voluntary Payments. To further
incentivize Borrower to make Voluntary Payments of principal
amounts under this Note, the Parties agree that (a) any
amounts received by Lender in respect of each Voluntary Payment
shall be applied in full to the principal balance of this Note,
first to any Additional Principal Amount and then to the Loan and
(b) the amount of interest accrued on this Note pursuant to
Section 4.1
in respect of the principal amounts
repaid by each such Voluntary Payment shall be forgiven in full and
the amount thereof deemed paid in full on the date of receipt of
such Voluntary Payment.
5. Security
Agreement; Seniority. The Borrower’s performance of its
obligations hereunder is secured by a security interest in the
collateral specified in the Security Agreement attached hereto
as Exhibit D.
The Borrower hereby acknowledges that the Lender’s rights
hereunder are pari passu with the rights of GSRN 1612-512 LLC
(“GSRN”)
pursuant to that (i) Prepaid Forward Purchase Agreement dated
as of December __, 2017 by and between GSRN and Borrower and (ii)
Security Agreement dated as of December __, 2017 by and between
GSRN and Borrower (the “GSRN
Security Agreement”), as
memorialized in that certain Intercreditor Agreement dated as of
the Effective Date by and among the Lender, GSRN, and
Borrower.
6. Stock
Grants. Borrower shall issue, and deliver to Lender stock
certificates representing the same, 5,000,000 shares of
Borrower’s common stock earned on the Resolution Progress Funding
Date within ninety (90) days of the Resolution Progress Funding
Date. Furthermore, Borrower shall issue, and deliver to Lender
stock certificates representing the same, 10,000,000 shares of
Borrower’s common stock earned on the Resolution Funding Date,
within ninety (90) days of the Resolution Funding Date. As of the
Effective Date, all authorized and issued and outstanding capital
stock of Borrower shall be set forth on Schedule I attached
hereto. All capital stock of Borrower issued pursuant to
this obligation by Borrower shall be validly issued, fully-paid and
non-assessable and owned by Borrower free and clear of all
liens.
7. Representations
and Warranties. Borrower hereby represents and warrants as of the
Effective Date, as follows:
7.1 Existence; Compliance with
Laws. Borrower is a corporation
duly incorporated, validly existing, and in good standing under the
laws of New Jersey and is compliance with all Laws and
Orders.
7.2 Power and Authority.
Borrower has the requisite power and
authority, and the legal right, to (a) own, lease, and operate its
properties and assets and to conduct its business as it is now
being conducted (b) duly execute and deliver this Note, and (c)
perform its obligations hereunder.
7.3 Authorization; Execution;
Delivery. The execution and
delivery of this Note by Borrower and the performance of its
obligations hereunder have been duly authorized by all necessary
corporate action in accordance with all applicable Laws. Borrower
has duly executed and delivered this Note.
7.4 Enforceability.
This Note is a valid, legal, and
binding obligation of Borrower, enforceable against Borrower in
accordance with its terms.
7.5 No Approvals.
No consent or authorization of, filing
with, notice to, or other act by, or in respect of, any
Governmental Authority or any other person is required in order for
Borrower to execute, deliver, or perform any of its obligations
under this Note.
7.6 No Violations.
The execution and delivery of this
Note and the consummation by Borrower of the transactions
contemplated hereby do not and will not (a) violate any provision
of Borrower’s organizational documents, (b) violate any Law
or Order applicable to Borrower or by which any of its properties
or assets may be bound, or (c) constitute a default under any
material agreement or contract by which Borrower may be
bound.
7.7 No Liens. There are no Encumbrances (as defined in the
Security Agreement) on the Collateral (as defined in the Security
Agreement) other than the Encumbrances in favor of Lender and those
granted by Borrower to GSRN pursuant to the GSRN Security
Agreement.
8. Affirmative
Covenants. Until all amounts outstanding in this Note have
been paid in full, Borrower shall:
8.1 Maintenance of
Existence. (a) Preserve, renew,
and maintain in full force and effect its corporate or
organizational existence and (b) take all reasonable action to
maintain all rights, privileges, and franchises necessary or
desirable in the normal conduct of its business, except, in each
case of this clause (b), where the failure to do so could not
reasonably be expected to have a Material Adverse
Effect.
8.2 Compliance. Comply with (a) all of the terms and provisions of
its organizational documents, (b) its obligations under its
material contracts and agreements, and (c) all Laws and Orders
applicable to it and its business, except where the failure to do
so could not reasonably be expected to have a Material Adverse
Effect.
8.3 Payment Obligations.
Pay, discharge, or otherwise satisfy
at or before maturity or before they become delinquent, as the case
may be, all its material obligations of whatever nature, except
where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings, and reserves in
conformity with GAAP with respect thereto have been provided on its
books.
8.4 Notice of Events of
Default. As soon as possible
and in any event within two (2) Business Days after it becomes
aware that a Default or an Event of Default has occurred, notify
Lender in writing of the nature and extent of such Default or Event
of Default and the action, if any, it has taken or proposes to take
with respect to such Default or Event of
Default.
8.5 Further Assurances.
Promptly execute and deliver such
further instruments and do or cause to be done such further acts as
may be necessary or advisable to carry out the intent and purposes
of this Note and the Security Agreement.
8.6 No
Encumbrances. Ensure that there
shall be no Encumbrance (as defined in the Security Agreement) on
the Collateral (as defined in the Security Agreement) other than
the Encumbrances in favor of Lender and those granted by Borrower
to GSRN pursuant to the GSRN Security
Agreement.
9. Events
of Default. The occurrence and continuance of any of the
following shall constitute an immediate Event of Default
hereunder:
9.1 Failure to Pay.
Borrower fails to pay (a) any
principal amount of the Loan when due, (b) interest or any other
amount due under this Note when due, and such failure in this
clause (b) continues for five (5) days, or (c) from and after the
Effective Date, any Retainer Payment when due.
9.2 Breach of Representations and
Warranties. Any representation
or warranty made or deemed made by Borrower to Lender herein, in
the Security Agreement or in the Intercreditor Agreement is
incorrect in any material respect on the date as of which such
representation or warranty is or was made or deemed
made.
9.3 Breach of Covenants.
Borrower fails to observe or perform
(a) any covenant, condition, or agreement contained in
Section
8 hereof or (b) any other
covenant, obligation, condition, or agreement contained in this
Note or the Security Agreement, other than those specified
in clause (a)
of this Section
9.3
and in Section
9.1
of this Note, and such failure
continues for thirty (30) days.
9.4 Cross-Defaults.
Borrower (a) fails to pay when
due any of its Debt (other than Debt arising under this Note) or
any interest or premium thereon when due (whether by scheduled
maturity, acceleration, demand, or otherwise) and such failure
continues after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt or
(b) takes, or fails to take, any action that could constitute
a breach of the Consulting Agreement from and after the Effective
Date.
9.5 Bankruptcy.
(a) Borrower commences any case, proceeding, or other
action (i) under any existing or future Law relating to bankruptcy,
insolvency, reorganization, or other relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition, or other relief with respect to it or its debts or
(ii) seeking appointment of a receiver, trustee, custodian,
conservator, or other similar official for it or for all or any
substantial part of its assets, or Borrower makes a general
assignment for the benefit of its creditors;
(b) there is commenced against Borrower any case,
proceeding, or other action of a nature referred to in
Section
9.5(a)
hereof that (i) results in the entry
of an order for relief or any such adjudication or appointment or
(ii) remains undismissed, undischarged, or unbonded for a period of
thirty (30) days;
(c) there is commenced against Borrower any case,
proceeding, or other action seeking issuance of a warrant of
attachment, execution, or similar process against all or any
substantial part of its assets that results in the entry of an
order for any such relief which has not been vacated, discharged,
or stayed or bonded pending appeal within thirty (30) days from the
entry thereof;
(d) Borrower takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in Section
9.5(a),
Section
9.5(b),
or Section
9.5(c)
hereof; or
(e) Borrower
is generally not, or shall be unable to, or admits in writing its
inability to, pay its debts as they become due.
9.6 Judgments. One or more judgments or decrees shall be entered
against Borrower and all of such judgments or decrees shall not
have been vacated, discharged, stayed, or bonded pending appeal
within thirty (30) days from the entry thereof.
10. Miscellaneous.
The Parties further agree as
follows:
10.1 Notices. All notices, requests, or other communications
required or permitted to be delivered hereunder shall be delivered
in writing at the addresses as Borrower or Lender may from time to
time specify in writing. Notices mailed by certified or registered
mail or sent by hand or overnight courier service shall be deemed
to have been given when received. Notices sent by facsimile during
the recipient’s normal business hours shall be deemed to have
been given when sent (and if sent after normal business hours shall
be deemed to have been given at the opening of the
recipient’s business on the next Business Day). Notices sent
by e-mail shall be deemed received upon the sender’s receipt
of an acknowledgment from the intended recipient (such as by the
“return receipt requested” function, as available,
return e-mail, or other written
acknowledgment).
10.2 Costs and Expenses.
Borrower shall reimburse Lender on
demand for all reasonable out-of-pocket costs, expenses, and fees
(including reasonable expenses and fees of its counsel) incurred by
Lender in connection with the transactions contemplated hereby
including the negotiation, documentation, and execution of this
Note, the Security Agreement, and the Intercreditor Agreement, and
the enforcement of Lender’s rights hereunder or
thereunder.
10.3 Governing Law.
This Note and any claim, controversy,
dispute, or cause of action (whether in contract or tort or
otherwise) based upon, arising out of, or relating to this Note and
the transactions contemplated hereby shall be governed by the laws
of the State of New
York.
(a) Borrower
hereby irrevocably and unconditionally agrees that any legal
action, suit, or proceeding arising out of or relating to this Note
may be brought in the courts of the State of New York or of the
United States District Court for the Southern District of New York
and submits to the exclusive jurisdiction of any such court in any
such action, suit, or proceeding. Final judgment against Borrower
in any action, suit, or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the
judgment.
(b) Nothing
in this Section
10.4
shall affect the right of Lender to
(i) commence legal proceedings or otherwise ▇▇▇ Borrower in any
other court having jurisdiction over Borrower or (ii) serve process
upon Borrower in any manner authorized by the laws of any such
jurisdiction.
10.5 Venue. Borrower irrevocably and unconditionally waives,
to the fullest extent permitted by applicable Law, any objection
that it may now or hereafter have to the laying of venue of any
action or proceeding arising out of, or relating to, this Note in
any court referred to in Section
10.4
hereof and the defense of an
inconvenient forum to the maintenance of such action or proceeding
in any such court.
10.6 Waiver of Jury Trial.
BORROWER HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY RELATING TO THIS NOTE OR THE TRANSACTIONS CONTEMPLATED
HEREBY, WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER
THEORY.
10.7 Counterparts; Integration;
Effectiveness. This Note and
any amendments, waivers, consents, or supplements hereto may be
executed in counterparts, each of which shall constitute an
original, but all taken together shall constitute a single
contract. This Note, including all attachments hereto, shall
constitute the entire contract between the Parties with respect to
the subject matter hereof and supersede all previous agreements and
understandings, oral or written, with respect thereto. Delivery of
an executed counterpart of a signature page to this Note by
facsimile or in electronic (i.e., “pdf” or
“tif”) format shall be effective as delivery of a
manually executed counterpart of this Note.
10.8 Successors and Assigns.
This Note and any or all of Lenders
rights hereunder may be assigned, transferred or encumbered by
Lender without the consent of Borrower or any other party. Borrower
may not assign or transfer this Note or any of its rights or
obligations hereunder without the prior written consent of Lender.
This Note shall inure to the benefit of, and be binding upon, the
Parties and their respective successors and permitted
assigns.
10.9 Interpretation.
For purposes of this Note (a) the
words “include,” “includes,” and
“including” shall be deemed to be followed by the words
“without limitation,” (b) the word “or” is
not exclusive, and (c) the words “herein,”
“hereof,” “hereby,” “hereto,”
and “hereunder” refer to this Note as a whole. The
definitions given for any defined terms in this Note shall apply
equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine, and neuter forms. Unless the
context otherwise requires, references herein (i) to Schedules,
Exhibits, and Sections mean the Schedules, Exhibits, and Sections
of this Note, (ii) to an agreement, instrument, or other document
means such agreement, instrument, or other document as amended,
supplemented, and modified from time to time to the extent
permitted by the provisions thereof, and (iii) to a statute means
such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated
thereunder. This Note shall be construed without regard to any
presumption or rule requiring construction or interpretation
against the party drafting an instrument or causing any instrument
to be drafted.
10.10 Amendment and Waiver.
No term of this Note may be waived,
modified, or amended except by an instrument in writing signed by
both of the parties hereto. Any waiver of the terms hereof shall be
effective only in the specific instance and for the specific
purpose given.
10.11 Headings. The headings of the various Sections and
subsections herein are for reference only and shall not define,
modify, expand, or limit any of the terms or provisions
hereof.
10.12 No Waiver, Cumulative
Remedies. No failure to
exercise and no delay in exercising on the part of Lender, of any
right, remedy, power, or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, remedy, power, or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power, or privilege. The rights, remedies, powers, and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers, and privileges provided by
Law.
10.13 Severability.
If any term or provision of this Note
is invalid, illegal, or unenforceable in any jurisdiction, such
invalidity, illegality, or unenforceability shall not affect any
other term or provision of this Note or invalidate or render
unenforceable such term or provision in any other jurisdiction.
Upon such determination that any term or other provision is
invalid, illegal, or unenforceable, the Parties shall negotiate in
good faith to modify this Note 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 greatest extent
possible.
10.14 No Effect on Consulting
Agreement. Except as expressly
set forth herein regarding the timing of payments in respect of the
Resolution Progress Funding Payment and such Retainer Payments as
are due and outstanding as of the Effective Date and that Lender is
an intended third-party beneficiary of the Consulting Agreement,
nothing set forth herein shall be deemed to waive, amend, abrogate
or otherwise diminish any right of the Lender or of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ under the Consulting Agreement, and the Consulting Agreement
shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
IN
WITNESS WHEREOF, the Parties have duly executed this Note as of the
Effective Date.
|
|
Global Digital Solutions, Inc.
|
|
|
By: ___________________________________
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Chief Executive Officer
|
|
|
Vox Business Trust, LLC
By:
___________________________________
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
Managing Member
|
|
|
|
[Signature Page to Demand Note]
Exhibit A
Definitions
“Additional Principal
Amount” has the meaning
set forth in Section
2.2
hereof.
“Applicable
Rate” means the rate
equal to seven percent (7%) per annum.
“Borrower” has the meaning set forth in the
introductory paragraph hereof.
“Business Day” means a day other than a Saturday,
Sunday, or other day on which commercial banks in New York City are
authorized or required by Law to close.
“Consulting
Agreement” has the
meaning set forth in Section A of the
Preliminary Statement hereof.
“Debt” of Borrower means all (a)
indebtedness for borrowed money; (b) obligations for the deferred
purchase price of property or services, except trade payables
arising in the ordinary course of business; (c) obligations
evidenced by notes, bonds, debentures, or other similar
instruments; (d) obligations as lessee under capital leases; (e)
obligations in respect of any interest rate swaps, currency
exchange agreements, commodity swaps, caps, collar agreements, or
similar arrangements entered into by Borrower providing for
protection against fluctuations in interest rates, currency
exchange rates, or commodity prices or the exchange of nominal
interest obligations, either generally or under specific
contingencies; (f) obligations under acceptance facilities and
letters of credit; (g) obligations of Borrower under the Prepaid
Forward Purchase Agreement, (h) guaranties, endorsements (other
than for collection or deposit in the ordinary course of business),
and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person, or otherwise to
assure a creditor against loss, in each case, in respect of
indebtedness set out in clauses (a)
through (g)
of this paragraph of a Person other
than Borrower; and (i) indebtedness set out in clauses (a)
through (h)
of this paragraph of any Person other
than Borrower secured by any lien on any asset of Borrower, whether
or not such indebtedness has been assumed by
Borrower.
“Default” means any of the events specified
in Section 9
hereof which constitutes an Event of
Default or which, upon the giving of notice, the lapse of time, or
both pursuant to Section 9
hereof would, unless cured or waived,
become an Event of Default.
“Default Rate” means, at any time, the Applicable
Rate plus five percent (5%).
“Effective
Date” has the meaning set
forth in the introductory paragraph hereof.
“Event of
Default” means any
of the events specified in Section 9
hereof.
“GAAP” means generally accepted accounting
principles in the United States of America as in effect from time
to time.
“Governmental
Authority” means the
government of any nation or any political subdivision thereof,
whether at the national, state, territorial, provincial, municipal,
or any other level, and any agency, authority, instrumentality,
regulatory body, court, central bank, or other entity exercising
executive, legislative, judicial, taxing, regulatory, or
administrative powers or functions of, or pertaining to, government
(including any supranational bodies such as the European Union or
the European Central Bank).
“GSRN” has the meaning set forth in
Section
5 hereof.
“GSRN Security
Agreement” has the
meaning set forth in Section 5
hereof.
“Law” as to any Person, means any law
(including common law), statute, ordinance, treaty, rule,
regulation, policy, or requirement of any Governmental Authority
and authoritative interpretations thereon, whether now or hereafter
in effect, in each case, applicable to, or binding on, such Person
or any of its properties or to which such Person or any of its
properties is subject.
“Lender” has the meaning set forth in the
introductory paragraph hereof.
“Loan” has the meaning set forth in
Section
2.1
hereof.
“Material Adverse
Effect” means a
material adverse effect on (a) the business, assets, properties,
liabilities (actual or contingent), operations, condition
(financial or otherwise), or prospects of Borrower; (b) the
validity or enforceability of this Note, the Security Agreement or
the Intercreditor Agreement; (c) the rights or remedies of Lender
hereunder or under the Security Agreement; or (d) Borrower’s
ability to perform any of its material obligations
hereunder.
“Note” has the meaning set forth in the
introductory paragraph hereof.
“Order” as to any Person, means any order,
decree, judgment, writ, injunction, settlement agreement,
requirement, or determination of an arbitrator or a court or other
Governmental Authority, in each case, applicable to or binding on
such Person or any of its properties or to which such Person or any
of its properties is subject.
“Parties” has the meaning set forth in the
introductory paragraph hereof.
“Person” means any individual, corporation,
limited liability company, trust, joint venture, association,
company, limited or general partnership, unincorporated
organization, Governmental Authority, or other
entity.
“Resolution Progress Funding
Payment” has the meaning
set forth in Section B of the
Preliminary Statement hereof.
“Retainer
Payments” has the meaning
set forth in Section C of the
Preliminary Statement hereof.
“Security
Agreement” means that
certain Security Agreement, dated as of the date hereof, by
Borrower in favor of Lender, as the same may from time to time be
amended, restated, supplemented or otherwise
modified.
Exhibit B
Principal Amounts and Payments on the Loan
|
Date of Loan or Additional Principal Amount
|
Loan or Amount of Additional Principal Amount
|
Amount of Principal Paid
|
Unpaid Principal Amount of Note
|
Name of Person Making the Notation
|
|
December __, 2017
|
$485,000
|
$0
|
$485,000
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit C
Consulting Agreement
See attached.
[Exhibit C
to Demand Promissory Note]