Exhibit 10.18

 
SECURED PROMISSORY NOTE
 
$250,000.00
August 14, 2018
 
 

 
FOR VALUE RECEIVED, the undersigned, BLOCKCHAIN INDUSTRIES, an individual
residing at 730 Arizona Ave., Suite 220, Santa Monica, California 90401 (the
“Borrower”), hereby promises to pay to the order of IC, LLC, a limited liability
company at 659 Stonequarry Rd., Dayton, OH, 45414 (the “Lender”) the principal
amount of TWO HUNDRED FIFTY THOUSAND UNITED STATES DOLLARS ($250,000.00) (the
“Loan”), or, if less, the aggregate unpaid principal amount of the Loan owing to
Lender with interest on the unpaid principal balance from the date of this
Secured Promissory Note (this “Promissory Note”) until paid, at the Interest
Rate (as hereinafter defined) provided herein.
 
1. Advances. The Lender shall advance the full principal amount of the Loan to
the Borrower upon the due execution and delivery to the Lender of an original
copy of this Promissory Note.
 
2. Rate of Interest. The Promissory Note shall bear a flat rate of interest at
$25,000.
 
3. Date and Time of Payment. The outstanding principal balance of this
Promissory Note, together with all accrued and unpaid interest, shall be paid in
full on the earlier to occur of (a) the Maturity Date (as hereinafter defined)
or (b) the date of termination of this Promissory Note, whether by its terms, by
prepayment, or by acceleration. All payments of principal of and interest on the
Loan by Borrower hereunder shall be made not later than 12:00 Noon (New York
City time) on the date when due by wire transfer of immediately available funds
to Lender’s account at a bank in the United States specified by Lender in
writing to Borrower.
 
4. Manner of Payment. The repayment of the Loan and all payments by Borrower in
respect of any obligations hereunder (the “Obligations”) shall be made without
deduction, defense, set off or counterclaim, free and clear of all taxes
delivered to Lender.
 
5. Maturity. To the extent not sooner due and payable in accordance with this
Promissory Note, the Obligations shall be due and payable THIRTY (30) days
following the date hereof (or such immediately preceding business day if such
date occurs on a non-business day) (the “Maturity Date”).
 
6. Application of Payments. All payments shall be applied to amounts then due
and payable in the following order: (a) to Lender’s costs and expenses
reimbursable in connection herewith; (b) to interest accrued on the outstanding
principal balance of this Promissory Note; (c) to the principal amount hereof;
and (d) to all other Obligations, or in such other manner as Lender shall
determine in its sole and exclusive discretion. As provided in Section 13
herein, notwithstanding anything contained herein to the contrary, the Lender’s
sole recourse hereunder shall be to the Pledged Assets.
 
7. Security. This Promissory Note shall be secured by a first priority security
interest in and pledge upon all of Borrower’s right, title, and interest in all
of its assets (the “Pledged Assets”). As security for the full and prompt
payment, when due, whether by acceleration or otherwise, of all amounts owing by
the Borrower to the Lender hereunder and the punctual and full performance and
compliance by the Borrower of each and every duty, covenant, agreement and
obligation hereunder, the Borrower hereby pledges, assigns, transfers and
delivers to the Lender the Pledged Assets and hereby grants to the Lender a
first priority lien on and a first priority security interest in the Pledged
Assets.
 
8. Representations and Warranties. Borrower makes the following representations
and warranties to Lender, which representations and warranties shall be true,
correct, and complete as of the date hereof and shall survive the execution and
delivery of this Promissory Note:
 
(a) Due Execution; No Conflict. This Promissory Note has been duly executed and
delivered by Borrower. The execution, delivery, and performance by Borrower of
this Promissory Note and the consummation of the transactions contemplated
hereby, do not and will not (i) violate any provision of federal, state or local
law or regulation applicable to Borrower, or any order, judgment or decree of
any court or other governmental authority, (ii) conflict with, result in a
breach or termination of, or constitute (with due notice or lapse of time or
both) a default under any contractual obligation of Borrower, (iii) result in or
require the creation or imposition of any lien of any nature whatsoever upon any
properties or assets of Borrower, other than liens or security interests in
favor of Lender or (iv) require any approval or consent of any other person or
entity, other than consents or approvals that have been obtained and that are
still in force and effect. The execution, delivery, and performance by Borrower
of this Promissory Note do not and will not require any registration with,
consent or approval of, or notice to, or other action with or by, any
governmental authority, other than consents or approvals that have been obtained
and that are still in force and effect. This Promissory Note when executed and
delivered by Borrower will be the legally valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its term, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally.
 
(b)  No Litigation. No litigation, investigation or proceeding of or before any
arbitrator or government authority is (i) pending or, to the knowledge of
Borrower, threatened with respect to this Promissory Note or the Pledged Assets
or any of the transactions contemplated hereby or (ii) pending or, to the
knowledge of Borrower, threatened by or against Borrower, its properties or
revenues which, if adversely determined, would have a material adverse effect on
its business, operations, property or financial condition, when taken as a
whole.
 
9.  Covenant of Borrower. As of the date hereof and so long as the Obligations
shall be outstanding, Borrower will not create or incur any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind on the Pledged
Assets.
 
10. Events of Default; Remedies; Acceleration. The occurrence of any one or more
of the following events shall constitute an “Event of Default” hereunder:
 
(a) Borrower fails to make any payment of outstanding principal balance of this
Promissory Note, or interest thereon, or any of the other Obligation when due
and payable;
 
(b) Any representation or warranty of Borrower made in this Promissory Note and
the transactions contemplated hereby proves to have been false or incorrect in
any material respect or Borrower shall fail to comply in all respects with any
covenant herein or therein;
 
(c) Borrower shall violate any provision of this Promissory Note; or
 
(d) If this Promissory Note or any financing statement, document or other
instrument executed, delivered or filed in connection herewith or with the
security interest granted to Lender hereunder shall, for any reason, fail or
cease to create a valid and perfected lien on or a first priority security
interest in any or all of the Pledged Assets or the Pledged Assets shall be
compromised or encumbered.
 
Upon the occurrence of any Event of Default described herein, Lender’s sole
recourse shall be to foreclosure upon the Pledged Assets. Upon an Event of
Default, Lender shall have the right to sell the Pledged Assets without demand
or notice of sale. Any sale may be made at Lender’s discretion on any exchange
or other market where such business is usually transacted or at public auction
or private sale and Lender may be the purchaser for its own account. It being
understood that a prior demand or prior notice of the time and place of such
sale shall not be considered a waiver of Lender’s right to sell or buy without
demand or notice.
 
Notwithstanding anything contained herein to the contrary, upon an Event of
Default, the Lender shall be authorized to date an instrument of transfer and
take such other actions necessary or advisable to effectuate the transfer of the
Pledged Assets from the ownership of the Borrower to the ownership of the
Lender, including, but not limited to, delivering the Pledged Assets and the
instrument of transfer to any officer or director of IC, LLC. necessary or
advisable to effect the transfer of ownership thereof.
 
11. Non-Recourse. The Lender’s sole recourse for payment hereunder is to the
Pledged Assets. The Borrower shall not be liable for any deficiency in the event
that the liquidation of the Pledged Assets does not serve to fully repay the
principal, interest or other Obligations remaining hereunder following the
liquidation of the Pledged Assets, in whole or in part, by the Lender. The
Lender shall not owe any amount whatsoever to the Borrower in the event that the
liquidation of the Pledged Assets results in an amount greater than the amount
of principal, interest or other Obligations owed hereunder by the Lender.
Notwithstanding anything contained herein to the contrary, the Lender shall have
full recourse against the Borrower and his assets (including the ability to
enforce any remedies at law or in equity) until such time as the Pledged Assets
are freely tradable and deposited into the account of the Lender.
 
12. Certain Rights and Waivers. To the extent not prohibited by the provisions
of applicable law, Borrower hereby expressly waives: (a) all presentments,
demands for performance, notices of nonperformance (except to the extent
required by this Promissory Note), protests, notices of protest and notices of
dishonor; (b) any requirement of diligence or promptness on the part of Lender
in the enforcement of its rights under this Promissory Note; (c) any and all
notices of every kind and description which may be required to be given by any
statute or rule of law; and (d) any defense (other than indefeasible payment in
full) which it may now or hereafter have with respect to its liability under
this Promissory Note.
 
13. Prepayment. Borrower may prepay this Promissory Note in whole or from time
to time in part, together with all accrued interest on this Promissory Note (or
portion being prepaid) without penalty or premium of any kind.
 
14. Assignments. Borrower may assign or transfer any of its rights or
obligations hereunder without consent of Lender.
 
15. Attorney Review. Each party hereto acknowledges and agrees that it has had
sufficient time to review and revise this Promissory Note, with the assistance
of counsel, and that this Promissory Note is the work product of both parties.
 
 
16.  CHOICE OF LAW. THE VALIDITY OF THIS PROMISSORY NOTE, THE CONSTRUCTION,
INTERPRETATION AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE BORROWER AND LENDER
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, SHALL BE
DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES EXCEPT TO
THE EXTENT NECESSARY TO ENFORCE THIS CHOICE OF LAW PROVISION. Borrower submits
to and agrees to the exclusive jurisdiction of the state and federal courts
sitting in the city of New York, New York, in any action or proceeding arising
out of or relating to this Promissory Note and agrees that all claims in respect
of the action or proceeding may be, and shall be, heard and determined in any
such court. Borrower waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought and waives any bond, surety or other
security that might be required of any other party with respect thereto. Lender
may make service of process by sending or delivering a copy of the process to
Borrower at the address and in the manner provided for the giving of notices
above. Nothing in this Section, however, shall affect the right of any of Lender
to serve legal process in any other manner permitted by law or in equity.
Borrower and the Lender shall be bound by a final judgment in any action or
proceeding so brought, which shall be conclusive and may be enforced by suit on
the judgment or in any other manner provided by law or in equity. In the event
of any action or suit based upon or arising out of any alleged breach of any
provision of this Promissory Note, the prevailing party will be entitled to
recover from the other party reasonable attorneys' fees and other costs of such
action or suit.
 
17.  Severability. If, for any reason, a court of competent jurisdiction finds
any provision of this Promissory Note, or any portion hereof, to be
unenforceable, such decision shall not affect the validity of the remaining
portion, which remaining portion shall continue in full force and effect as if
this Promissory Note had been executed with the invalid portion thereof
eliminated therefrom or modified to the extent permitted by law.
 
18. Notices. All communications hereunder shall be in writing and shall be
deemed to be duly given and received (a) upon delivery if delivered personally
or upon emailing if by email or upon confirmed transmittal if by facsimile, (b)
on the next business day if sent by overnight courier, or (c) four (4) business
days after mailing if mailed by prepaid registered mail, return receipt
requested, in each case to the appropriate notice address or facsimile number.
 
19. Transfers. Borrower may not transfer or assign this Promissory Note nor any
right or obligation hereunder to any person or entity without the prior written
consent of Lender. This Promissory Note is freely transferable by Lender.
 
20. Independent Arms Length Transaction. It is understood and agreed that this
Promissory Note and the transactions contemplated hereby were negotiated in an
arms length transaction separate and distinct from any other transaction or
contractual obligations and are independent of any transaction or transactions
between Borrower, on the one hand, and Lender and any of its affiliates or
related entitles on the other hand. Borrower further agrees that the contractual
obligations of Borrower hereunder are in no way dependent or conditioned upon
any other agreements, contracts or transactions whatsoever unless expressly
stated herein.
 
 
[ signature page follows ]
 
 

 
IN WITNESS WHEREOF, the undersigned has executed this Promissory Note as of the
date first written above.
 
BLOCKCHAIN INDUSTRIES, INC.
 
 
 
_____________________________
By: Patrick Moynihan
Title: CEO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[ signature page to Promissory Note ]