SECURED PROMISSORY NOTE & SETTLEMENT AGREEMENT
Exhibit
10.10
SECURED PROMISSORY NOTE
& SETTLEMENT AGREEMENT
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US$45,000.00
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September
15, 2010
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Plus
Settlement Amount
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FOR VALUE RECEIVED, the undersigned,
Innolog Holdings Corporation, Innovative Logistics Techniques, Inc., Xxxxx
Capital Corporation, Xxxxx Capital Group, LLC and GCC Capital Group, LLC
(together the “Maker”), jointly and severally promise to pay to the Xxx X.
Xxxxxxxxx Trust (the “Holder”), at such place as the Holder may later designate
in writing, in lawful money of the United States, the principal sum of
forty-five thousand United States dollars ($45,000.00) in accordance with this
promissory note (the “Note”) under the terms set forth herein.
1. Rate
of Interest
The outstanding principal balance due
under this Note shall bear an interest at the rate of six percent (6%) per
annum, compounded monthly (“Interest Rate”) until paid in full.
2. Repayment
Principal and interest due under this
Note and the Settlement Payment (as defined below) shall be payable at the
maturity date of September 30, 2010 (“Maturity Date”). Furthermore,
this Note shall be repaid as a first priority along with any similar notes of
even date herewith (on a pari pasu basis) from any and all amounts received by
Maker from ANY accounts receivable received by any of Maker subject only to
normal operating expenses and regular current accounts payables – except that no
such payments shall be made from the Annex A Accounts Receivable (as
defined herein) until this Note and the Settlement Amount is repaid in
full.
The Maker shall have the right to
prepay at any time and from time to time, in advance of maturity, without
premium or penalty, all or part of the principal amount of this
Note. Each payment shall be applied first to the principal balance
due.
Time is of the essence on the
repayment of this Note and the Settlement Amount.
3. Acknowledgment
of Debt and Settlement
Maker
acknowledges and affirms that prior note by Holder to Maker and/or an affiliate
of Maker dated December 31, 2009, in the original principal amount of $34,405
and that the total amount owed under such note is currently $43,526.98,
including accrued interest and late fees, and will be $43,925.98 as
of the Maturity Date hereof. The funds related to such note were used
to benefit Maker and its business. The Holder has been
preparing to file a lawsuit to recover such moneys owed. Such lawsuit
would significantly increase the amount owed as the Maker and/or its affiliates
are liable for all fees and expenses in connection with the collection of the
amount owed thereunder. Thus, the potential exposure under such note
could be approximately $60,000 or more. The Holder is willing to
accept a settlement amount of $42,500 if paid on the Maturity Date
hereof. If the Settlement Amount is not repaid on or before the
Maturity Date, then Holder has the right to pursue the entire amount owed, plus
interest, fees and expenses.
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4. Late
Fee and Default Interest
As noted above, time is of the
essence on the repayment of this Note. If this Note is not
paid in full on or before the Maturity Date, there shall be a late fee of ten
percent or $4,500. In addition, after the Maturity Date, this Note
shall accrue interest from the Maturity Date at the rate of eighteen percent
(18%) per annum, compounded daily until paid in full (“Default
Interest”). Such Default Interest shall be on the outstanding
principal amount, the interest due under the Note, the Late Fee and the
Settlement Amount.
5. Events
of Default
The following shall constitute Events
of Default hereunder:
(a) If
Maker defaults in the payment of any amount due on this Note when due (there is no requirement for any
notice and there is no right to cure any failure of payment when due);
and
(b) If
Maker shall (i) make a general assignment for the benefit of creditors, or (ii)
apply for or consent to the appointment of a receiver, trustee or liquidator for
itself or all or a substantial part of its assets, or (iii) be adjudicated a
bankrupt or insolvent, or (iv) file a voluntary petition in bankruptcy or file a
petition or an answer seeking reorganization or an arrangement with creditors or
seeking to take advantage of any other law (whether Federal or state) relating
to relief of debtors, or admit (by answer, by default or otherwise) the material
allegations of a petition filed against it in any bankruptcy, reorganization,
insolvency or other proceeding (whether Federal or state) relating to relief of
debtors, or (v) suffer or permit to continue unstayed and in effect for sixty
(60) consecutive days any judgment, decree or order entered by a court of
competent jurisdiction, that approves an involuntary petition seeking
reorganization of Maker, or appoints, pursuant to such a petition, a receiver,
trustee or liquidator for it or all or a substantial part of its
assets.
6. Remedies
(a) Upon
the happening of an Event of Default, Holder may, in Xxxxxx's sole and absolute
discretion and without notice or demand to Maker, declare the entire amount of
principal and interest thereon remaining outstanding hereunder immediately due
and payable, whereupon, the same shall forthwith become and be due and payable
without any presentment, demand or notice of any kind, all of which are
expressly waived by Maker.
(b) If
an Event of Default shall occur, the Maker shall pay the Holder, on demand by
the Holder, all costs and expenses incurred by the Holder in connection with the
collection and enforcement of this Note, including attorneys' fees and the
amounts described above.
7. Security
This Note including all late fees,
interest, penalties and the Settlement Amount is/are secured by the accounts
receivable listed on Annex A hereto (as may be supplemented from time to time,
the “Annex A Accounts Receivable”). Maker shall promptly execute and
deliver such security interests, UCC-I and other filing statements or other
documents or interests requested by Xxxxxx in order to perfect such security
interest. Maker represents and warrants that the Annex A Accounts
Receivable listed are in excess of $100,000 and are free and clear and may be
encumbered by this Note and any subsequent security agreements and related
documents in favor of the Holder. If for any reason whatsoever, the
Annex A Accounts Receivable are not sufficient to repay all amounts due
hereunder, including the Settlement Amount, or the Holder reasonably believes at
any time in its sole and absolute discretion that it is not fully and
satisfactorily secured, Maker shall immediately upon written request provide
additional accounts receivable satisfactory to the Holder and Maker shall
immediately execute and deliver such documents as may be necessary to perfect
such security interest.
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8. Priority
of Repayment.
This Note shall be repaid by Maker
prior to the repayment of any other debt of Maker of any kind other than normal
operating expenses and regular current accounts payables. Maker shall
submit by wire transfer amounts owed hereunder to Holder within 1 business day
of Maker’s receipt of any accounts receivable.
9. Miscellaneous
(a) This
Note shall be deemed to be made and entered into under the laws of the
Commonwealth of Virginia and for all purposes shall be construed and enforced in
accordance with the laws of the Commonwealth of Virginia, without giving effect
to any of the conflicts of law principles which would result in the application
of the substantive law of another jurisdiction. Maker (i) hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court sitting in the Northern District of Virginia and the courts of the
Commonwealth of Virginia located in Fairfax County for the purposes of any suit,
action or proceeding arising out of or relating to this Note and (ii) hereby
waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such court, that
the suit, action or proceeding is brought in an inconvenient forum or that the
venue of the suit, action or proceeding is improper.
(b) This
Note shall be binding upon Maker and Maker's successors and assigns and shall
inure to the benefit of Holder and Xxxxxx's successors and assigns; and each
reference herein to Maker or to Holder shall, except where the context shall
otherwise require, be deemed to include its respective successors and
assigns. Notwithstanding the foregoing, Maker shall not have any
right to assign his obligations hereunder without Xxxxxx's prior written
consent.
(c) Any
failure by Holder to exercise any right or remedy hereunder shall not constitute
a waiver of the right to exercise the same or any other right or remedy at any
subsequent time, and no single or partial exercise of any right or remedy shall
preclude other or further exercise of the same or any other right or
remedy.
(d) Maker,
and all others that may become liable for all or any part of the obligations
evidenced by this Note, hereby waive presentment, demand, notice of nonpayment,
protest and all other demands’ and notices in connection with the delivery,
acceptance, performance and enforcement of this Note, and do hereby consent to
any number of renewals of extensions of the time or payment hereof and agree
that any such renewals or extensions may be made without notice to any such
persons and without affecting their liability herein and do further consent to
the release of any person liable hereon, all without affecting the liability of
the other persons, firms or Maker liable for the payment of this Note, AND DO
HEREBY WAIVE TRIAL BY JURY.
(i) No
delay or omission on the part of the Holder in exercising its rights under this
Note, or course of conduct relating hereto, shall operate as a waiver of such
rights or any other right of the Holder, nor shall any waiver by the Holder of
any such right or rights on any one occasion be deemed a waiver of the same
right or rights on any future occasion.
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(ii) THE
MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A
COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY
WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.
(e) The
remedies provided in this Note shall be cumulative and in addition to all other
remedies available under this Note, at law or in equity (including, without
limitation, a decree of specific performance and/or other injunctive relief), no
remedy contained herein shall be deemed a waiver of compliance with the
provisions giving rise to such remedy and nothing herein shall limit a Holder’s
right to pursue actual damages for any failure by the Maker to comply with the
terms of this Note. Amounts set forth or provided for herein with
respect to payments, the warrants and the like (and the computation thereof)
shall be the amounts to be received by the Holder thereof and shall not, except
as expressly provided herein, be subject to any other obligation of the Maker
(or the performance thereof). The Maker acknowledges that a breach by
it of its obligations hereunder will cause irreparable and material harm to the
Holder and that the remedy at law for any such breach may be inadequate.
Therefore the Maker agrees that, in the event of any such breach or threatened
breach, the Holder shall be entitled, in addition to all other available rights
and remedies, at law or in equity, to seek and obtain such equitable relief,
including but not limited to an injunction restraining any such breach or
threatened breach, without the necessity of showing economic loss and without
any bond or other security being required.
(f) Maker
agrees to pay immediately upon request and without any need of any approvals or
determinations of any kind all costs and expenses of enforcement of this Note,
including, without limitation, attorneys’ fees and expenses.
(g) None
of the terms and provisions hereof may be waived, altered, modified, or amended
except by an agreement in writing signed by Maker and Holder.
CONFESSED
JUDGMENT
THIS
INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR OR GUARANTOR AND ALLOWS THE
HOLDER TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER NOTICE.
Maker, jointly and severally
(hereinafter referred to as “Debtor”), promise to pay to the order of Holder the
sum of EIGHTY-SEVEN THOUSAND
FIVE HUNDRED DOLLARS AND ZERO CENTS ($87,500.00), plus the Late Fee with
interest at 18% per annum, compounded monthly, from the September 30, 2010 until
paid, including and after the recording of this confession of judgment, plus all
costs of collection, including all attorneys’ fees, less credit for any payments
made.
Furthermore, Maker, jointly and
severally acknowledge the Holders right to pursue the security and
accounts receivable securing this debt. Debtor hereby expressly
waives the benefit of any homestead exemption as to this debt and waives demand,
protest, notice of presentment, notice of protest, and notice of non-payment and
dishonor of this note. Xxxxxx agrees this confessed judgment note is
provided not in payment of, but as additional security for and evidence of
obligations due to the Holder under the Note.
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IN WITNESS WHEREOF, Maker has caused
this Note to be executed as of the day and year first above written by its duly
authorized and empowered officer or representative.
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MAKER
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Innolog
Holdings Corporation
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Innovative
Logistics Techniques, Inc.
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GCC
Capital Group, LLC
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Xxxxx
Capital Group, LLC
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Xxxxx
Capital Corporation
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By:
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/s/
WPD
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Xxxxxxx
X. Xxxxxxxxxx
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Chairman
& Authorized Representative
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For
each of the respective
entities
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WITNESSED
____________________________
Name: _____________________
ANNEX
A
SPECIFIC
ACCOUNTS RECEIVEABLE
In Excess
of US$100,000
Attached
DFAS –
Indianapolis
W91WAW-09-C-0173
Acct #
5030-116
Name;
ODCSLOG
Amount
$102,907.26
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