CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this “Agreement”) is dated as of December 14, 2023 (the “Effective Date”), and is entered into by and between LFTD PARTNERS INC., a Nevada corporation (“LFTD”) and LIFTED LIQUIDS, INC., an Illinois corporation (“LLI” and together with LFTD, collectively and jointly and severally, the “Borrower”) and SURETY BANK (the “Lender”).
X.Xxxxxxxx has agreed to provide Lender with certain collateral in order to secure the repayment of the “Loan,” as hereinafter defined.
X.Xxxxxx has agreed to make, and Xxxxxxxx has agreed to accept, the Loan, subject to the terms, provisions and conditions hereinafter set forth.
Xxxxxxxx and Xxxxxx agree as follows:
For and in consideration of the Loan, the covenants, agreements, representations and warranties set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged.
ARTICLE 1
RECITALS, DEFINITIONS, RULES OF DEVELOPMENT AND EXHIBITS
1.1Recitals. The foregoing recitals are hereby ratified and confirmed by the Borrower and Lender as being true and correct, and are hereby incorporated into this Agreement.
(a)Accounts: All of the "accounts" (as that term is defined in the Uniform Commercial Code as adopted in the State of Florida, as in effect from time to time) of Borrower, whether now existing or hereafter arising.
(b)Account Debtor: Any individual, partnership, corporation, trust, limited liability company, limited liability partnership, unincorporated association or organization, joint venture or any other entity, obligated on any Account owing to Borrower.
(c)Business Assets: All assets of the Borrower listed on Exhibit “A” attached hereto.
(d)Business Day: A day other than a Saturday, Sunday or a day on which commercial banks in Orlando, Florida are authorized or required by law to close.
(e)Collateral: The Lender shall have a first priority security interest in all of Borrower’s business assets as identified in Exhibit “B” and as identified in the Security Agreement and a pledge of the ownership interest identified in the Pledge Agreement made in favor of the Lender and dated on even date herewith. The fair value of the Collateral shall at all
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times equal or exceed $7,500,000, in the sole discretion of the Lender.
(f)Debt Service Coverage Ratio: EBIDA divided by contractual annual debt service payments.
(g)Default Rate: The highest rate allowable under the laws of the State of Florida.
(h)Events of Default: Those events described in Section 7.1 hereof.
(i)EBIDA: Earnings before interest, depreciation, and amortization.
(j)Fiscal Year: The period of twelve (12) consecutive calendar months for which financial statements of the Borrower have been examined by its independent certified public accountants currently for the Borrower, a year ending on December 31st.
(k)Fiscal Quarter: One of four (4) three-month accounting periods that comprise the Fiscal Year.
(l)Interest Rate: The interest rate on the Promissory Note shall be a fixed rate equal to a rate of nine and five tenths’ percent (9.50%). Interest on this loan is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this loan is computed using this method.
(m)Loan: The loan in the original principal amount of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00).
(n)Loan Documents: This Agreement and any other documents or instruments executed, submitted, or delivered by Xxxxxxxx, to or in favor of Lender, in connection with the Loan, including, but not limited to, this Agreement the Promissory Note, and the Security Agreement (each document being a “Loan Document”).
(o)Material Adverse Effect: The existence of events, conditions and/or contingencies that have had or are reasonably likely to have (a) a materially adverse effect on the business, operations, properties, assets or financial condition of the Borrower, (b) a material impairment of the ability of the Borrower to perform any of its material obligations under any Loan Documents to which it is or will be a party, or (c) an impairment of the validity or enforceability of any material provision of, or a material impairment of the material rights, remedies or benefits available to the Lender under any Loan Document.
(p)Maturity Date: The date that is the earlier of (i) sixty (60) months from the Effective Date and (ii) the date on which all amounts outstanding under this Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).
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(q) Payment Date: means the 14th of each month, commencing on January 14, 2024, and continuing until the Maturity Date.
(r)Promissory Note: That certain Promissory Note dated as of the Effective Date made by the Borrower to the order of the Lender and evidencing the Loan.
(s)Security Agreement: That certain Security Agreement dated on even date herewith encumbering the Collateral as set forth therein and which is executed and delivered by Xxxxxxxx to and in favor of Lender to secure the Promissory Note.
1.3Rules of Definitions. Unless the context otherwise requires:
(a)a defined term shall have the meaning assigned to it in Section 1.2 hereof;
(b)an accounting term, not otherwise defined, shall have the meaning assigned to it in accordance with generally accepted accounting principles (“GAAP”);
(c)words in the singular include the plural, and words in the plural include the singular; and
(d)reasonableness is not implied in any requirement of consent, approval, or satisfaction unless expressly provided to the contrary.
ARTICLE 2
THE LOAN AND COLLATERAL
Loan Year 13.00% of the Original Loan Amount
Loan Year 22.00% of the Original Loan Amount
Loan Year 31.00% of the Original Loan Amount
2.4Interest on the Loan.
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(a)The Borrower shall pay interest on the Loan at the Interest Rate, in accordance with the Loan Documents.
(b)Upon an Event of Default, including failure to pay upon final maturity, the Interest Rate on this loan shall be increased to the Default Rate.
(c)Interest on the principal amount of the Loan shall accrue from and including the date the Loan is made. Interest on the Loan shall be payable monthly in arrears on each Payment Date. After the occurrence of an Event of Default, all interest and principal shall be payable on demand.
2.5Costs of the Loan. In addition to any fees heretofore, simultaneously herewith, or hereafter paid to, for, on behalf or at the direction of Lender, Borrower shall pay all costs and expenses (including, but not limited to, attorneys’ fees, para-professional fees, administrative fees, UCC search fees, inspection fees, audit fees, permit or license fees, insurance premiums, title search fees, title insurance premiums and endorsements, recording fees, documentary stamp tax, intangible tax, lien and judgment search fees, environmental assessments, filing fees, document preparation fees, settlement fees, escrow fees, appraisal fees, tax service fees, flood determination fees, survey fees and any other disbursements, court costs, litigation and other expenses) incurred or paid by the Lender or its legal counsel or representatives in connection with making the Loan and/or enforcing its terms. These fees are due and payable by Borrower regardless of whether the Loan closes. Lender shall retain the exclusive right in its sole discretion to approve or disapprove of the persons, or entities providing such services, matters or items. Additionally, Borrower shall pay the following fees: lender’s counsel fees, one-half percent (0.50%) of the loan amount which is, $15,000.00, regardless of whether the transactions contemplated by this Credit Agreement are consummated.
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such other security instruments and documents as may be required by Lender, each of which shall grant a security interest in the Collateral.
2.8Perfection of Liens. The Borrower shall take all action that may be necessary or desirable, or that Lender may request, so as at all times to maintain the validity, perfection, enforceability and priority of Xxxxxx’s security interest in the Collateral and to enable Lender to protect, exercise or enforce its rights hereunder and in the Collateral, including (i) immediately discharging all Liens (defined below) other than Permitted Encumbrances (as defined in Exhibit
“A” attached hereto and incorporated herein by reference), (ii) obtaining landlords’ or mortgagees’ Lien waivers, (iii) delivering to Lender, endorsed or accompanied by such instruments of assignment as Lender may specify, and stamping or marking, in such manner as Lender may specify, any and all chattel paper, instruments, letters of credits and advices thereof and documents evidencing or forming a part of the Collateral, (iv) entering into warehousing, lockbox and other custodial arrangements satisfactory to Lender, and (v) executing and delivering, or causing to be executed or delivered, lien perfection documents requested by Xxxxxx, in each case in form and substance satisfactory to Lender, relating to the creation, validity, perfection, maintenance or continuation of Xxxxxx’s security interest under the UCC or other applicable law. By its signature hereto, the Borrower hereby authorizes Lender to file against such Borrower, one or more financing, continuation or amendment statements pursuant to the UCC in form and substance satisfactory to Lender (which statements may have a description of collateral which is broader than that set forth herein). All charges, expenses and fees Xxxxxx may incur in doing any of the foregoing, and any local taxes or other expenses relating thereto, shall be charged to Borrower and reimbursed to Lender as an Advance under the Loan, or, at Xxxxxx’s option, shall be paid to Lender by Borrower immediately upon demand.
For purposes hereof the term “Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), encumbrance, claim or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the UCC or comparable law of any jurisdiction.
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ARTICLE 3
CONDITIONS PRECEDENT TO XXXXXX’S OBLIGATION
(a)satisfactory evidence, as reasonably determined by Xxxxxx and its counsel, that as of the date of funding the Loan, the Lender will have a first priority security interest in all of the Collateral, subject only to Permitted Encumbrances and that as of the date of funding, Borrower is current on all state and federal taxes;
(b)such other additional documents, instruments, and certificates as the Lender may request in connection with the consummation of the transactions contemplated hereby;
(c)confirmation that all financial covenants in Article 5 hereof are satisfied as of the date on which the Loan will be funded;
(d)confirmation that any and all UCC financing statements filed against the Collateral, other than UCC financing statements filed by the Lender or otherwise permitted in connection with the Permitted Encumbrances, have been terminated;
(e)payment of all additional costs, fees and expenses incurred by Xxxxxx and or owed by Borrower in connection with the Loan; and
(f)Organizational documents of the Borrower and evidence that the Borrower is in good standing and authorized to operate in the state that it was formed and each state that it conducts business.
(a)This Agreement and each of the other Loan Documents shall be effective;
(b)No event or condition shall have occurred or become known to Borrower, which has or could have a Material Adverse Effect on the business or operations of the Borrower;
(c)No default or Event of Default exists or would exist hereunder or under the Loan Documents;
(d)The Loan is within and complies with the terms and conditions of this Agreement;
(e)There shall not have been, in the judgment of the Lender, any material loss or damage to, or diminution in value of the Business Assets or any organizational change of the Borrower that causes or could cause a Material Adverse Effect;
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(f)No Lien (other than a Permitted Encumbrance incurred in the Borrower’s ordinary course of business) has been imposed on Borrower or its assets;
(g)Each representation and warranty set forth in this Agreement and any other Loan Document in effect at such time (as amended or modified from time to time) is true and correct in all material respects on the date hereof and shall continue to be until the Maturity Date, except to the extent such representations and warranties are made only as of a specific earlier date; and
(h)Borrower shall have delivered to Lender all such other documents, instruments, and certificates as Lender may request.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to make the Loan, Borrower hereby represents, warrants and covenants to and with Lender as follows:
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except as contemplated by the provisions of this Agreement. The Promissory Note, the Security Agreement, this Agreement and each and all of the other Loan Documents constitute the legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms.
4.10Litigation. There is not now any suit, action, claim or legal, administrative, arbitration or other proceeding or governmental investigation pending or, to the best of Borrower’s knowledge, contemplated or threatened, against or affecting the Borrower or any of the Collateral nor, to the best of Borrower’s knowledge, is there any basis for any such matters, except for such matters disclosed on Schedule I attached hereto and incorporated herein.
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Borrower shall not permit any of the Collateral to be levied upon under legal process, permit anything to be done that may impair the value of any of the Collateral or the security intended to be afforded by this Agreement.
ARTICLE 5 AFFIRMATIVE COVENANTS
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(a)annually, as soon as available, and in any event no later than one hundred fifty (150) days from the last day of Xxxxxxxx’s Fiscal Year, tax returns of the Borrower and audited financial statements of the Borrower prepared by an independent certified public accountant satisfactory to Lender. If on extension; a copy of the extension is required, and the tax return shall be due no later than the 15th day of the month of which the return is due;
(b)as soon as available, and in any event no later than fifteen (15) days of filing, SEC filings, including 10-K and 10-Q reporting;
(c)Quarterly, as soon as available, and in any event no later than fifteen (15) business days after the filing of the corresponding Quarterly Report on Form 10-Q or Annual Report on Form 10-K, Borrower’s Inventory Workbook;
(d)Borrower shall maintain a minimum Debt Service Coverage Ratio greater than or equal to 1.50x, tested annually, commencing with Fiscal Year end 2022 and continuing on each Fiscal Year end thereafter until the Maturity Date. The Debt Service Coverage Ratio shall be calculated utilizing the information derived from Xxxxxxxx’s tax returns delivered pursuant to 5.3(a) above; and
(e)In the event the aforementioned financial information is not provided to Lender within the timeframe required under the Loan Documents, the interest rate provided in the Promissory Note, may, at Lender’s option, increase to a rate equal to three percent (3.00%) above the then existing Interest Rate. In no such event, however, will the Interest Rate exceed the maximum rate permitted under Florida law.
5.4 Costs and Attorneys’ Fees. All reasonable costs and expenses of any kind or nature whatsoever, including without exception reasonable attorneys’ fees and expenses, paid, suffered or incurred by the Lender in the enforcement or defense of this Agreement or any of the other Loan Documents, including proceedings in appellate courts, shall be paid by Xxxxxxxx. In any litigation between Lender and Borrower involving the interpretation or enforcement of this Agreement or any of the other Loan Documents, Xxxxxx’s costs, expenses and attorneys’ fees as specified in the preceding sentence shall only be required to be paid by Xxxxxxxx in the event that the Lender is the prevailing party in such litigation, and if Borrower is determined by the court to be the prevailing party in any such litigation between Xxxxxx and Borrower, Lender shall be required to pay Borrower’s costs, expenses and attorneys’ fees. Whenever used herein or in any of the other Loan Documents, “attorneys’ fees” shall include fees and expenses of attorneys or paralegals whether or not any suit, proceeding or action shall be commenced, whether incurred before during or after trial or upon any appellate level, or in mediation, arbitration, any administrative or quasi- judicial proceeding, or in any proceeding in bankruptcy or insolvency.
5.5Maturity. The Loan hereunder shall mature and all indebtedness outstanding thereunder shall be paid in full on the applicable Maturity Date.
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the other Loan Documents and (ii) any Event of Default or event which, with notice or lapse of time or both, could become an Event of Default under this Agreement or under any of the other Loan Documents specifying in each case the nature thereof and what action Borrower has taken, is taking and proposes to take with respect thereto.
5.10Disclosure of Litigation. Borrower shall promptly (but in no event later than ten
(10) days after a responsible officer of the Borrower acquires knowledge of one of the following state of affairs), give written notice to the Lender of any suit, action, claim or legal, administrative, arbitration or other proceeding or governmental investigation pending or, to the best of Xxxxxxxx’s knowledge, contemplated or threatened, against or affecting the Borrower or any of the Collateral, not otherwise disclosed herein.
ARTICLE 6 NEGATIVE COVENANTS
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(a)serve as a guarantor or otherwise assume the debts or become liable for the debts of another person or entity;
(b)wind up, liquidate or dissolve (voluntarily or involuntarily) or commence or suffer any proceedings seeking any such winding up, liquidation or dissolution;
(c)redeem, retire, purchase or otherwise acquire, directly or indirectly, for value or set apart any sum for the redemption, retirement, purchase or other acquisition of, any of the capital stock (or any options or warrants in respect thereof) of the Borrower or any subsidiary now or hereafter outstanding without the prior written consent of the Lender, which consent shall not be unreasonably withheld or delayed;
(d)enter into any transaction, including, without limitation, the purchase, sale, exchange, or transfer of property or the rendering of any service, with any affiliate or subsidiary, or permit any subsidiary to enter into any transaction, including, without limitation, the purchase, sale, or exchange of property or the rendering of any service, with any affiliate or any other subsidiary;
(e)permit the outstanding principal balance of the Loan exceed forty percent (40%) of the fair market value (as determined by the Lender of all Collateral securing the Loan); nor
(f)directly or indirectly issue, assume, create, incur or suffer to exist additional indebtedness on the Collateral.
ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES
(a)Any regularly scheduled or recurring payment of principal, interest or other fee or charge on or under the Promissory Note, the Security Agreement, this Agreement or any other Loan Document is not made by Borrower after five (5) days’ prior written notice;
(b)Any payment or reimbursement of any amount which is to be paid or reimbursed by Borrower to Lender under the Promissory Note, the Security Agreement, this Agreement, or any other Loan Document other than the amounts specified in subsection 7.1(a) above is not made within five (5) days of the date written notice of or demand for the payment of such amount is given by Lender to Borrower;
(c)An event of default or default as defined in the Promissory Note the Security Agreement, or any other Loan Document shall occur and all applicable cure periods with regard thereto, if any, have expired;
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(d)A claim of lien or any other lien or encumbrance or any kind or nature shall be filed against the Collateral, or any part thereof or interest therein, except for Permitted Encumbrances, without Lender’s prior written consent, and not released within thirty (30) days from the date of notification of filing, or Borrower shall fail to post a statutory bond or have obtained a discharge of such claim of lien from the Collateral, or any part thereof or interest therein, without Xxxxxx’s prior written consent, within thirty (30) days from notification of the date of filing;
(e)Borrower shall fail to perform any covenant, obligation or term or condition of this Agreement as and when required hereby and which is not cured within fifteen (15) days after such failure to perform or any representation or warranty of Borrower herein or in any other Loan Documents executed concurrently herewith or made subsequent hereto, shall be found to be inaccurate, untrue or breached in any respect;
(f)If Borrower shall file a voluntary petition in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any petition to answer seeking any reorganization, arrangement, composition, readjustment, liquidation, wage earner’s plan, assignment for the benefit of creditors, receivership, dissolution or similar relief under any present or future Federal Bankruptcy Act or any other present or future applicable federal, state or other statute or law, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of Borrower or all or any part of the properties of Borrower or if within sixty (60) days after commencement of any proceeding against Borrower or any endorser of the Promissory Note, seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, debtor relief or similar relief under any present or future federal bankruptcy act or any other present or future federal, state or other statute or law, such proceeding shall not have been dismissed, or stayed on appeal; or if, within sixty (60) days after the appointment, without the consent of acquiescence of Borrower or of any endorser of the Promissory Note, of any trustee, receiver, or liquidator of Borrower or any endorser of the Promissory Note, such appointment shall not have been vacated or stayed on appeal or otherwise; or if within ten (10) days after the expiration of any such stay, such appointment shall not have been vacated;
(g)A violation or breach by Borrower shall occur in any contract, agreement, covenant, indenture, restriction, or encumbrance affecting title to the Collateral which is not cured within fifteen (15) days after written notice thereof;
(h)Except as otherwise permitted hereunder, a sale, transfer, conveyance, assignment, disposition, master lease, pledge or encumbrance of the Collateral, or any portion thereof or any interest therein, or the sale, transfer, conveyance, pledge or encumbrance of any ownership interest in or of the Borrower and/or any partnership or ownership interest in or of the Borrower, without the prior written consent of Lender in each instance;
(i)Any substantial damage to or destruction of the Collateral, if (i) the applicable insurance proceeds shall not, in the reasonable opinion of the Lender, be sufficient to repair and restore the Collateral, or (ii) if the insurance proceeds shall not be paid within a reasonable time;
(j)The holder of any lien or security interest on or in any portion of the Collateral (without implying Lender’s or Lender’s consent to the existence, placement, creation or
permitting of any such lien or security interest) commences proceedings for foreclosure on any
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Collateral or for the enforcement of its other remedies thereunder;
(k)A judgment for the payment of money in excess of the lesser of (i) $50,000, or (ii) the available and unused commitment, and either (i) enforcement proceedings, including, without limitation, through attachment, levy or garnishment or repossession or seizure of property, shall have been commenced by any creditor upon such judgment or order, or (ii) there shall be a period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;
(l)Any suit, action, claim or legal, administrative, arbitration or other proceeding or governmental investigation pending, against or affecting the Borrower or any of the Collateral which, such suit, action, claim or legal, administrative, arbitration or other proceeding or governmental investigation pending may cause the value of the Loan to exceed forty percent (40%) of the value of the Collateral.
(m)The Borrower is liquidated, dissolved, consolidated or merged;
(n)The Borrower has made materially false or misleading representations to the Lender or has provided materially false or misleading information;
(o)Borrower sells, transfers, assigns, or otherwise conveys the Collateral, any portion thereof, or any of Borrower’s interest therein, without the prior written consent of the Lender;
(p)Lender fails to have an enforceable first lien on or security interest in any Collateral;
(q)Lender determines that the value of the Collateral is less than $7,500,000, even if no other Event of Default has occurred or is occurring; or
(r)Xxxxxxxx’s rights under this commitment and the Loan shall be personal as the Lender has evaluated this Loan and has agreed to make this Loan based on the unique qualifications of Borrower, both financial and otherwise. Any sale, conveyance or transfer effecting a change in ownership or control of LLI and/or the collateral shall cause the Loan to become due and payable in full.
(a)Upon the occurrence of an Event of Default (after the expiration of any applicable notice and cure periods), Lender may take any one or more of the following actions:
(i)Cease making Loan Advances or Disbursements hereunder; Without prior notice (but with written notice being provided to Borrower by Lender within 48 hours after such set-off), set-off against, appropriate and apply all balances, credits and deposits in any account of Borrower with Xxxxxx, credits with and claims of Borrower against the Lender and any other property of Borrower, and the proceeds thereof, now or hereafter held or received by or in transit to the Lender from or for the account of the Borrower whether for safekeeping, custody, pledge, transmission, collection or otherwise;
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(ii)Declare immediately due and payable, with interest, all monies advanced hereunder and accordingly accelerate payment of the Promissory Note and, at Xxxxxx’s option, take any other action permitted thereby, or by law, notwithstanding anything contrary in the terms of payment stated therein;
(iii)Enter upon the property or wherever the Collateral may be situated, and take possession of all Collateral located thereon, as well as all books, records, files, correspondence and other material of Borrower related to the Collateral, and all materials, supplies, tools, equipment and appliances located thereon or stored off-site;
(iv)Seek and obtain the appointment of a receiver to take possession of and operate and/or dispose of the business, assets and Collateral of Borrower and any costs and expenses incurred by Lender in connection with such receivership shall bear interest at the Default Rate, at Xxxxxx’s option, and shall be secured by the Collateral; or
(v)Cause all outstanding indebtedness under the Loan to bear interest at the Default Rate from and after the occurrence of an Event of Default until the default is cured or a waiver granted by Xxxxxx in writing.
(b)The remedies herein provided for shall be in addition to and not in substitution for the rights and remedies which would otherwise be vested in Lender in law or equity or those additional remedies as specified in the Promissory Note, the Security Agreement, and any other Loan Documents, all of which rights and remedies shall be cumulative and which are specifically reserved by Lender, and the failure by Lender to exercise the remedies herein or therein provided shall not preclude the resort to any other remedy or remedies, nor shall the exercise of the remedies herein or therein provided prevent the subsequent or concurrent resort to any other remedy or remedies which by law or equity or provided hereunder or in any other Loan Document shall be vested in Lender for the recovery of damages or otherwise in the event of a breach of any of the undertakings or Borrower hereunder. No delay or omission by Xxxxxx in exercising any right or remedy accruing upon the happening of an Event of Default shall impair any such right or remedy or shall be construed as a waiver of any such default; and every right and remedy hereby conferred upon Lender may be exercised from time to time and as often as shall be deemed expedient by Xxxxxx. No waiver of any Event of Default shall extend to or affect any other Event of Default.
7.3Cross-Collateral/Cross-Default. The parties hereto agree that the this Credit Agreement, the Promissory Note, the Security Agreement, and the other Loan Documents pertaining to the Promissory Note of even date herewith, including any and all extensions, renewals, replacements and/or modifications thereof, are cross defaulted with each other and with any and all other loans or agreements which any of the undersigned may have with Lender, now or in the future; and a default in any such other loan or agreement will be deemed a default of this Loan and vice-versa. At the option of Lender, without notice, a default under any such instruments will constitute a default of the other instruments hereby cross-defaulted; and are cross- collateralized by all collateral securing one another and by all collateral securing any other loans that Borrowers, now, or in the future, has with Lender and a default of any such other loans or agreements will be deemed a default of the Loan of even date. The terms of this cross-collateral provision apply to any collateral securing any loans or agreements which Borrower, now has with Lender or may have in the future with Lender. The parties hereby provide the Security Agreement
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on all such collateral (real or personal) that secures such present or future loans to Borrowers, by lender without any further reference in the loan documents of such other loan(s). In addition, the Loan Documents will be cross-collateralized and cross-defaulted with the proposed Kenosha, WI commercial real estate purchase.
ARTICLE 8 MISCELLANEOUS
8.1Immunity. Xxxxxx’s commitment to make advances hereunder shall not at any time be subject or liable to attachment or levy at the suit of any creditor of Borrower or any agent, contractor, subcontractor or supplier of Borrower.
If to Borrower:LFTD Partners Inc.
00000 Xxxx Xxxxxx Xxxxx Xxxxxxxxxxxx, Xxxxxxx 00000 Attention: Xxxxxxx X. Xxxxxx
Lifted Liquids, Inc. 0000 00xx Xxx.
Kenosha, Wisconsin 53144 Attention: Xxxxxxx X. Xxxxxx
If to Lender:Surety Bank
000 X. Xxxxxxxx Xxxx. Deland, Florida 32720
Attention: Xxxx X. Xxxxx, President
with a copy to:Xxxxxx Xxxxxx PLLC
000 X. Xxxxxxx Xxxx., Xxxxx 0000
Tampa, Florida 33602
Attention: Xxxxx X. Xxxxxx, Esq.
Provided, that additional or other addresses for the giving of notices may be hereafter designated by the giving of written notices thereof to the other party. Such notices shall be deemed given upon the earlier of actual receipt by the addressee or when delivery is attempted at the addresses specified herein during normal business hours and delivery is refused.
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8.5Controlling Document. To the extent that a Loan Document conflicts with or is in any way incompatible with this Agreement, the terms of this Agreement shall control as to matters related to this Loan, and if this Agreement does not address an issue, then the Loan Document that deals most specifically with such issue shall control.
8.6Commitment Letter. All terms and conditions of that certain Commitment Letter, dated August 31, 2023, between the parties hereto, and any modifications or addendums thereto, if any, are hereby incorporated and made a part hereof. All terms and conditions thereof apply to this Credit Agreement.
8.8Time. Time is of the essence as to all matters provided for in this Agreement. In the event of any inconsistency between the applicable time periods or dates contained in this Agreement and those contained in any other Loan Document entered into between Borrower and Lender concurrently herewith, the time periods and dates set forth herein shall control. Borrower shall not assign any right or obligation hereunder without Xxxxxx’s prior written consent, and any purported assignment in violation of this provision will be null and void.
8.9Lawful Rate of Interest. Nothing contained in this Agreement or elsewhere in the Promissory Note, the Security Agreement, or any other Loan Document is intended to or shall create an obligation for Borrower to pay interest or a charge in the nature of interest for the Loan or the use of any money advanced by Lender in excess of the maximum amount or rate permitted by applicable law and any such amount so paid shall be immediately credited in reduction of the outstanding principal balance of the Loan or if repaid in full, then repaid to Borrower by Lender.
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8.14Severability. If any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
(Signatures begin on next page)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered the year and day first above written by their undersigned, duly authorized officer.
BORROWER: | |
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LFTD PARTNERS INC., a Nevada | |
corporation | |
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By: | /s/ Xxxxxxx X. Xxxxxx |
Name: | Xxxxxxx X. Xxxxxx |
Title: | President |
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LIFTED LIQUIDS, INC., a Illinois | |
corporation | |
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By: | /s/ Xxxxxxx X. Xxxxxx |
Name: | Xxxxxxx X. Xxxxxx |
Title: | President |
[BORROWER SIGNATURE PAGE TO CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered the year and day first above written by their undersigned, duly authorized officer.
LENDER | |
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SURETY BANK | |
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By: | /s/ Xxxxx Xxxxxx |
Name: | Xxxxx Xxxxxx |
Title: | Chief Financial Officer |
[LENDER SIGNATURE PAGE TO CREDIT AGREEMENT]
Exhibit “A”
Permitted Encumbrances
Exhibit “B”
Business Assets Business Assets consist of:
a)All of Borrower’s Furniture, Fixtures, and Equipment (as hereinafter defined);
b)All of the proceeds and products, as the case may be, of Borrower’s Furniture, Fixtures, and Equipment;
g)All accessions to, substitutions for and all replacements, products, cash and non-cash proceeds of and income and profits arising from any of (a) through (b) above, including, without limitation, proceeds of and unearned premiums with respect to insurance policies insuring any of the Collateral;
i)All books and records of Borrower pertaining to any of (a) through (b) above;
j)All assets and properties of the foregoing types acquired by Borrower subsequent to the date of this Agreement;
k)All of Borrower’s distribution rights, income rights, liquidation interests, accounts, contract rights, notes, instruments, drafts and documents relating to any of the above listed assets;
As used herein, the following terms shall have the meanings set forth below:
“Furniture, Fixtures, and Equipment” shall mean all equipment and fixtures of whatever kind or nature now owned or hereafter acquired by Borrower, and wherever located, including, without limitation, all machinery, vehicles, tools, dies, trade fixtures, furnishings and equipment, patterns, cranes, furniture, furnishings, motor vehicles, tractors, trailers, rolling stock, office machines and equipment, material handling equipment, manufacturing equipment, conveyors, forklifts, machine systems, computers, and all other goods used in the operation of Borrower’s business, together with all accessories, parts and additions now or hereafter affixed thereto or used in connection therewith.
Schedule I
Disclosed Litigation
Lifted currently is involved in one pending lawsuit, as the plaintiff:
Lifted Liquids, Inc. v. Xxxx Xxxxxxx and Xxxxx Xxxx and Carry SD, Inc. – The Company has filed an action seeking to recover approximately $98,000 in damages resulting from Defendants’ failure to pay for product they ordered. The matter has been filed in California and the Company intends to pursue the action and recover its damages.
On November 13, 2023, Xxxxxx received a letter dated November 6, 2023 from the State of Wisconsin Department of Workforce Development (“Department”). The letter stated that the Department had dismissed the case Lifted Liquids, Inc. v. Xxxxx Xxxx, ERD Case No.: CR202301774; EEOC Case No: 26G202301223. Previously, a disgruntled former Lifted employee had filed an action with the Wisconsin Department of Workforce Development claiming discrimination and retaliation.
On November 9, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Lifted Liquids, Inc. v. Girish GPO, Inc., Xxxxxx Xxx, and the Law Offices of Xxxx Xxxxx. The Company had filed an action in a case styled “Lifted Liquids, Inc. v. Girish GPO, Inc., Xxxxxx Xxx, and the Law Offices of Xxxx Xxxxx” seeking to recover $30,000 that was to be held in escrow by the Law Offices of Xxxx Xxxxx. The Company also sought approximately $14,569 in damages resulting from Xxxxxx GPO’s failure to pay for product it ordered and that the Company delivered. The Company has obtained a $30,000.00 default judgment against the Law Offices of Xxxx Xxxxx and is attempting to collect on the judgment. The action against Xxxxxx GPO has been resolved with the Xxxxxx defendants agreeing to pay the Company $34,000.00 over time.
On October 9, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Lifted Liquids, Inc. v. DEV Distribution, LLC, No, DC-22-15080. In October 2022, Lifted filed an action against Dev Distribution LLC (“Dev”), a vendor who failed to deliver certain products that Lifted has purchased for $263,938 for. Xxx filed a counterclaim alleging breach of contract. In October 2023, the parties settled the litigation and agreed to mutual releases and dismissal of the lawsuit in exchange for Dev paying $230,000.00 and providing certain equipment and product.
On May 25, 2023, Lifted entered into a settlement agreement that was mutually acceptable to the parties which has resolved the following lawsuit: Xxxxxx, Xxxxx x. Lifted Liquids. Mr. Xxxxx Xxxxxx, who worked in Lifted’s production facility, had sued Lifted in regard to an alleged chemical burn. In May 2023, the parties settled the litigation and agreed to mutual releases and dismissal of the lawsuit in exchange for $5,000 paid by Lifted to Mr. Xxxxxx.