DEMAND NOTE

 

As of October 1, 2019 Up to $1,750,000

 

BORROWER (Name): Sport-BLX, Inc., a Delaware corporation (“Borrower”)

(Address of chief executive office): 510 Madison Avenue, 9th Floor, New York,
New York 10022

 

LENDER: GlassBridge Enterprises, Inc. (“Lender”), having an office at 510
Madison Avenue, 9th Floor, New York, New York 10022, Attention: Daniel Strauss

 

WHEREAS, Borrower seeks to borrow from Lender, amounts not to exceed $1,750,000;
and

 

WHEREAS, Lender is willing to extend credit to borrow and may, at Lender’s sole
discretion, may make advances to Borrower on the terms and conditions set forth
herein.

 

NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, Borrower agrees as follows:

 

Promise to Pay. For value received, and intending to be legally bound, Borrower
promises to pay to the order of the Lender on demand the principal sum of up to
One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00), or if less,
the amounts actually borrowed from Lender as set forth on the schedule attached
hereto, plus interest as agreed below and all fees and costs (including without
limitation attorneys’ fees and disbursements whether for internal or outside
counsel) the Lender incurs in order to collect any amount due under this Note,
to negotiate or document a workout or restructuring, or to preserve its rights
or realize upon any guaranty or other security for the payment of this Note
(“Expenses”). Lender is hereby authorized to record on Schedule I hereto, and
any continuation sheets which Lender may attach thereto, (a) the date and amount
of each Advance to Borrower made by Lender (“Advances”), and (b) the date and
amount of each payment or prepayment of principal of any Advances. No failure to
so record or any error in so recording shall affect the obligation of Borrower
to repay the Advances hereunder, together with interest thereon, as provided in
this Note, and the outstanding principal balance of the Advances as set forth in
Schedule I shall be presumed to be correct. Advances shall be used to repay
existing trade indebtedness, repurchase common stock, and for other general
corporate purposes.

 

Request for Advance. Borrower shall request Advances from the Lender in writing
not less than one business day prior to the requested date of such Advance,
unless otherwise waived by Lender. Advances shall be in an amount of not less
than $50,000.

 

Interest. The unpaid principal balance of this Note shall earn interest
calculated on the basis of a 360-day year for the actual number of days in each
year (365 or 366), from and including the date the proceeds of this Note are
disbursed to, but not including, the date all amounts hereunder are paid in
full, at a rate per year which shall be fixed at 8.00%.

 

Upfront Fee: In consideration for the Lender extending credit to the Borrower,
the Borrower agrees to pay to Lender an upfront fee in the amount of $17,500,
which shall be fully earned on the date the first Advance is made hereunder, and
shall be payable out of the proceeds of the first Advance.

 

Due on Demand. This is a demand Note and all amounts referenced hereunder shall
become immediately due and payable upon demand by the Lender; provided, however,
that all amounts due hereunder shall automatically become immediately due and
payable if Borrower or any guarantor or endorser of this Note commences or has
commenced against it any bankruptcy or insolvency proceeding. Borrower hereby
waives protest, presentment and notice of any kind in connection with this Note.
Absent demand for payment in full, interest shall be due and payable monthly.

 

Default Rate. If the Lender has not actually received any payment under this
Note within ten (10) days after its due date, from and after such tenth day the
interest rate for all amounts outstanding under this Note shall automatically
increase to five (5) percentage points above the otherwise applicable rate per
year, and any judgment entered hereon or otherwise in connection with any suit
to collect amounts due hereunder shall bear interest at such default rate.

 

Payments; Due Date. Payments shall be made in immediately available United
States funds at the Lender’s office set forth above, or to any other location
given in writing by the Lender to the Borrower. Accrued and unpaid interest
shall be payable to Lender on the last business day of each calendar quarter,
and all accrued and unpaid interest, plus all outstanding principal amounts and
other fees and expenses, shall be payable in full upon the earlier to occur of
(a) demand by Lender, or (b) April 1, 2020.

 

Interest Accrual; Application of Payments. Interest will accrue at the rate set
forth herein and shall be paid no later than the last day of each month. All
payments (excluding voluntary prepayments of principal) will be applied as of
the date each payment is received and processed. Payments may be applied in any
order in the sole discretion of the Lender, but, prior to a payment default, may
be applied chronologically (i.e., oldest Advance first) to unpaid amounts due
and owing, in the following order: first to accrued interest, then to principal,
then to escrow (if any), then to late charges and other fees, and then to all
other Expenses.

 

Late Charges. If Borrower fails to pay, within five (5) days of its due date,
any amount due and owing pursuant to this Note or any other agreement executed
and delivered to the Lender in connection with this Note, Borrower shall
immediately pay to the Lender a late charge equal to the greatest of (a) $50.00,
or (b) five percent (5%) of the delinquent amount.

 

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Representations and Warranties. Borrower represents that it is duly organized
and in good standing or duly constituted in the state of its organization is
duly authorized to do business in all jurisdictions material to the conduct of
its business; that the execution, delivery and performance of this Note have
been duly authorized by all necessary regulatory and corporate action or by its
governing instrument; that this Note has been duly executed by an authorized
officer and constitutes a binding obligation enforceable against Borrower and
not in violation of any law, court order or agreement by which Borrower is
bound; and that Borrower’s performance is not threatened by any pending or
threatened litigation. None of Borrower’s assets are subject to any lien or
encumbrance.

 

Covenants: Borrower agrees that so long as this Note remains unpaid, it shall
not incur any indebtedness for borrowed money without the Lender’s prior written
consent other than trade indebtedness incurred in the ordinary course of
business. Borrower will pay or discharge when due all taxes, assessments and
governmental charges or levies imposed upon Borrower unless such amounts are
being diligently contested in good faith by appropriate proceedings provided
that adequate reserves with respect thereto are maintained on the books of
Borrower in conformity with GAAP. Without first obtaining Lender’s prior written
consent, Borrower shall not change (i) its name as it appears in the official
filings in the state of its formation, (ii) the type of legal entity it is,
(iii) its state of formation or (iv) amend its certificate of incorporation, by
laws or other organizational document.

 

Revival. To the extent that Borrower makes a payment or Lender receives any
payment or proceeds for Borrower’s benefit which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver, custodian or any other party under
the United States Bankruptcy Code or any other bankruptcy law, common law or
equitable cause, then, to such extent, the obligations of Borrower hereunder
intended to be satisfied shall be revived and shall continue as if such payment
or proceeds had not been received by Lender.

 

Miscellaneous. This Note, together with any related loan letter agreement,
security agreements and/or guaranties, contains the entire agreement between the
Lender and Borrower with respect to the Note, and supersedes every course of
dealing, other conduct, oral agreement and representation previously made by the
Lender. All rights and remedies of the Lender under applicable law and this Note
or amendment of any provision of this Note are cumulative and not exclusive. No
single, partial or delayed exercise by the Lender of any right or remedy shall
preclude the subsequent exercise by the Lender at any time of any right or
remedy of the Lender without notice. No waiver or amendment of any provision of
this Note shall be effective unless made specifically in writing by the Lender.
No course of dealing or other conduct, no oral agreement or representation made
by the Lender, and no usage of trade, shall operate as a waiver of any right or
remedy of the Lender. No waiver of any right or remedy of the Lender shall be
effective unless made specifically in writing by the Lender. Borrower agrees
that in any legal proceeding, a copy of this Note kept in the Lender’s course of
business may be admitted into evidence as an original. This Note is a binding
obligation enforceable against Borrower and its successors and assigns and shall
inure to the benefit of the Lender and its successors and assigns. If a court
deems any provision of this Note invalid, the remainder of the Note shall remain
in effect. Section headings are for convenience only. Singular number includes
plural and neuter gender includes masculine and feminine as appropriate.

 

Notices. Any demand or notice hereunder or under any applicable law pertaining
hereto shall be in writing and duly given if delivered to Borrower (at its
address on the Lender’s records) or to the Lender (at the address on page one
and separately to the Lender officer responsible for Borrower’s relationship
with the Lender). Such notice or demand shall be deemed sufficiently given for
all purposes when delivered (i) by personal delivery and shall be deemed
effective when delivered, or (ii) by mail or courier and shall be deemed
effective three (3) business days after deposit in an official depository
maintained by the United States Post Office for the collection of mail or one
(1) business day after delivery to a nationally recognized overnight courier
service (e.g., Federal Express). Notice by e-mail is not valid notice under this
or any other agreement between Borrower and the Lender.

 

Governing Law; Jurisdiction. This Note will be interpreted in accordance with
the laws of the State of New York excluding its conflict of laws rules. BORROWER
HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT IN THE STATE OF NEW YORK IN NEW YORK COUNTY AND CONSENTS THAT THE
LENDER MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS
SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED
IN THIS NOTE WILL PREVENT THE LENDER FROM BRINGING ANY ACTION, ENFORCING ANY
AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY,
AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER
COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges
and agrees that the venue provided above is the most convenient forum for both
the Lender and Borrower. Borrower waives any objection to venue and any
objection based on a more convenient forum in any action instituted under this
Note.

 

Waiver of Jury Trial. Borrower and the Lender hereby knowingly, voluntarily, and
intentionally waive any right to trial by jury Borrower and the Lender may have
in any action or proceeding, in law or in equity, in connection with this note
or the transactions related hereto. Borrower represents and warrants that no
representative or agent of the Lender has represented, expressly or otherwise,
that the Lender will not, in the event of litigation, seek to enforce this jury
trial waiver. Borrower Acknowledges that the Lender has been induced to enter
into this note by, among other things, the provisions of this Section.

 

[Signature Page Follows]

 

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Acknowledgment. Borrower acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law; Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.

 

  SPORT-BLX, INC.

 

      By: /s/ Cesar A. Baez   Name: Cesar A. Baez   Title: Acting Chair, Related
Party Transaction Committee

 

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