Exhibit 10.5

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THIS NOTE MAY NOT BE OFFERED
FOR SALE OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS; OR AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE ACCEPTABLE TO THE ISSUER, THAT REGISTRATION IS
NOT REQUIRED.

 

SECURED DISBURSED ESCROW PROMISSORY NOTE

 

Issuance Date:  April 27, 2018 $264,000

 

FOR VALUE RECEIVED, Creative Realities, Inc., a Minnesota corporation (“CRI”),
Creative Realities, LLC, a Delaware limited liability company (“CRLLC”), and
Conexus World Global, LLC, a Kentucky limited liability company (“Conexus,” and
collectively referred to together with CRI and CRLLC as the “Maker”), hereby
promises to pay to the order of Slipstream Communications, LLC, an Anguillan
limited liability company, or its successors or assigns (as applicable,
the “Holder”), the principal amount of $264,000 (USD), or such lesser amount as
actually advanced as a Disbursed Escrow Loan pursuant to that certain Loan and
Security Agreement by and between Maker and initial Holder dated as of August
17, 2016 (as amended, modified, restated, waived or supplemented, the “Loan and
Security Agreement”), in accordance with the terms hereof and the Loan and
Security. This Secured Disbursed Escrow Promissory Note is hereinafter referred
to as the “Note” and is the Disbursed Escrow Note referred to in the Loan and
Security Agreement. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Loan and Security Agreement.

 

1. INTEREST AND PAYMENTS

 

(a)       Interest. The principal amount of this Note will bear simple interest
(calculated in the manner provided in the Loan and Security Agreement) at the
rate equal to the Loan Rate, subject to increase as provided in the Loan and
Security Agreement. Interest will be payable in cash on a monthly basis in
arrears on the first Business Day of each month, with the first interest payment
due on the first Business Day of the first month after the Disbursed Escrow
Trigger Date.

 

(b)       Term and Payment; Application. The principal amount of this Note,
together with all accrued but unpaid interest and any other sums owed hereunder,
shall be due and payable at the close of business on the Disbursed Escrow
Maturity Date. All payments and prepayments shall be applied first to any costs
payable under this Note or the Loan and Security Agreement, second to accrued
but unpaid interest, and third to principal.

 

(c)       Prepayment. Maker may at its option prepay all principal and interest
owed under this Note, in whole or in part, at any time and from time to time,
without penalty or premium.

 

 

 

 

2. TRANSFER, EXCHANGE AND REPLACEMENT

 

(a)       Transfer or Exchange. This Note has not been and is not being
registered under the provisions of the Securities Act of 1933 (the “Securities
Act”) or any state securities laws and this Note may not be transferred prior to
the end of the holding period applicable to sales under Rule 144 unless in
accordance with applicable law and unless: (1) the transferee is an “accredited
investor” (as defined in Regulation D under the Securities Act) and (2) the
Holder shall have delivered to Maker an opinion of counsel, reasonably
satisfactory in form, scope and substance to Maker, to the effect that this Note
may be sold or transferred without registration under the Securities Act. Upon
surrender of any Note for registration of transfer or for exchange to CRI at its
principal office, Maker at its sole expense will execute and deliver in exchange
therefor a new Note or Notes, as the case may be, as requested by the Holder or
transferee, which aggregate principal amount is equal the unpaid principal
amount of such Note, registered as such Holder or transferee may request;
provided, however, that this Note may not be transferred by Holder to any Person
other than Holder’s affiliates without the prior written consent of Maker. Maker
shall be entitled to regard the registered Holder of this Note as the Holder of
the Note so registered for all purposes until Maker or its agent, as applicable,
is required to record a transfer of this Note on its register.

 

(b)       Replacement. Upon notice to Maker of the loss, theft, destruction or
mutilation of this Note, and, in the case of loss, theft or destruction, of an
indemnification undertaking by the Holder to Maker in a form reasonably
acceptable to Maker and, in the case of mutilation, upon surrender and
cancellation of the Note, Maker shall execute and deliver a new Note of like
tenor and date and in substantially the same form as this Note.

 

3. DEFAULTS AND REMEDIES

 

An Event of Default shall occur when and as provided in the Loan and Security
Agreement and, upon any such default, the Holder shall have the remedies
described in the Loan and Security Agreement.

 

4. AMENDMENT AND WAIVER

 

The provisions of this Note may not be modified, amended or waived, and Maker
may not take any action herein prohibited, or omit to perform any act herein
required to be performed by it, without the written consent of the Holder.

 

5. MAKER’S WAIVER OF NOTICE

 

To the extent permitted by law, Maker hereby waives demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, except as may be set forth in
the Loan and Security Agreement.

 

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6. GOVERNING LAW

 

This Note shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this
Note shall be governed by, the laws of the State of New York, without giving
effect to provisions thereof regarding conflict of laws.

 

7. INDEMNITY AND EXPENSES

 

Maker agrees to pay and reimburse the Holder upon demand for all reasonable
costs and expenses (including without limitation reasonable attorneys’ fees and
expenses) that the Holder may incur in enforcing its rights under this Note
(including but not limited to collection).

 

8. NO WAIVER OF ENFORCEMENT RIGHTS

 

No failure or delay on the part of this Note in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.

 

9. NOTICE

 

Notices shall be given at the address for Maker or Holder, as applicable,
indicated in the Loan and Security Agreement. Notice shall be deemed to have
been given as described in the Loan and Security Agreement.

 

10. JOINT AND SEVERAL

 

All obligations of Maker under this Note shall be joint and several.

 

 

* * * * * * *

 

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IN WITNESS WHEREOF, the undersigned have set their hands to this Secured
Disbursed Escrow Promissory Note as of the date first set forth above.

 

MAKER:

 

CREATIVE REALITIES, INC.

        By:  /s/ Rick Mills     Rick Mills     Chief Executive Officer  

 

CREATIVE REALITIES, LLC

        By:  /s/ Rick Mills     Rick Mills     Chief Executive Officer  

 

CONEXUS WORLD GLOBAL, LLC

        By:  /s/ Rick Mills     Rick Mills     Chief Executive Officer