Exhibit 10.5

 

EXECUTION VERSION

  

 

FIRST AMENDMENT TO MASTER PROMISSORY NOTE (DEMAND)

 

THIS FIRST AMENDMENT TO MASTER PROMISSORY NOTE (DEMAND) (“Amendment”) is made
effective as of July 17, 2020, by and among CCUR HOLDINGS, INC. (the "Lender")
and LM CAPITAL SOLUTIONS, LLC, a New York limited liability company (the
“Borrower”).

 

RECITALS:

 

WHEREAS, the Borrower has executed and delivered in favor of the Lender the
Master Promissory Note (Demand) dated as of February 13, 2019 in the principal
amount of $10,350,000 (as amended, restated, supplemented or otherwise modified
from time to time, the “Promissory Note”); and

 

WHEREAS, Borrower has notified the Lender of an upcoming transaction that would
otherwise constitute an Acceleration Event (as defined in the Promissory Note);
and

 

WHEREAS, the Lender is willing to amend the Promissory Note; and

 

WHEREAS, to accomplish the foregoing, the parties hereto have agreed to modify
certain terms of the Promissory Note.

 

NOW THEREFORE, in consideration of the Recitals and the mutual covenants and
conditions set forth in the Promissory Note, the other documents and instruments
executed in connection with the Promissory Note (together with the Promissory
Note, the “Loan Documents”) and herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree that the Loan Documents shall be amended by this Amendment
as more specifically set forth herein. Defined terms utilized in this Amendment
and not otherwise defined herein shall have the meanings given to them in the
Promissory Note as the same is amended hereby.

 

1.                  Reaffirmation of Existing Debt. The Borrower acknowledges
and confirms as of the date hereof (a) that the Borrower’s obligation to repay
the outstanding principal amount of the Loans is unconditional and not subject
to any offsets, defenses or counterclaims, (b) that the Lender has performed
fully all of its respective obligations under the Promissory Note and the other
Loan Documents, and (c) by entering into this Amendment, the Lender does not
waive or release any term or condition of the Promissory Note or any of the
other Loan Documents or any of their rights or remedies under such Loan
Documents or applicable law or any of the obligations of the Borrower
thereunder.

 

2.                  Amendments to Promissory Note.

 

(a)                The section titled “Covenants.” is hereby amended and
restated to read as follows:

 

Covenants. At all times during the term hereof and so long as any Loan hereunder
remains outstanding:

 

(a)       The Borrower shall not make any dividend or other distribution without
the consent of the Lender;

 

(b)        The Borrower shall not make any payments to (whether as an operating
expense, consultant fee or otherwise) Avraham Zeines, Oskar Kowalski or Kamil
Blaszczak;

 

(c)       On the 20th day of each month, the Borrower shall repay, in an amount
equal to Excess Cash as of the last day of the immediately preceding month, (i)
first, accrued and unpaid interest and (ii) second, the outstanding principal
amount of the Note. “Excess Cash” shall mean all revenue minus operating
expenses and agreed upon distributions (which shall not include, for the
avoidance of doubt, management fees, consultant fees or any payments prohibited
to be made by the Borrower under this Note); and

 

 

 

 

(d)The Borrower shall furnish to the Lender:

 

(i)Notices of any of the following (collectively, “Notice Events”): (A) the
occurrence of (1) a default or breach by the Borrower under this Note or any
other Loan Document or (2) the occurrence of any Acceleration Event, (B) any
matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, (C) any default occurs under any agreement in connection with
any credit the Borrower or any of the Borrower’s related entities or affiliates
has obtained from anyone other than the Lender or which the Borrower or any of
the Borrower’s related entities or affiliates has guaranteed, (D) any lawsuit or
lawsuits are filed on behalf of one or more trade creditors against the Borrower
in an aggregate amount of Fifty Thousand Dollars ($50,000) or more in excess of
any insurance coverage or (E) any judgments or arbitration awards are entered
against the Borrower, or the Borrower enters into any settlement agreements with
respect to any litigation or arbitration, in an aggregate amount of Fifty
Thousand Dollars ($50,000) or more in excess of any insurance coverage. For
purposes hereof, “Material Adverse Effect” shall mean (1) a material adverse
change in, or a material adverse effect upon, the operations, business,
properties, liabilities (actual or contingent), condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its subsidiaries
taken as a whole, (2) a material impairment of the ability of the Borrower to
perform its obligations under this Note or any other Loan Document, or (3) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower under this Note or any other Loan Document.

  

(b)                The section titled “Acceleration.” is hereby amended and
restated to read as follows:

 

Acceleration. If any of the following events occurs (each an “Acceleration
Event”), then the entire debt outstanding under this Note will automatically be
due immediately (without prior notice): (a) upon demand by the Lender, (b) the
Borrower files a bankruptcy petition, a bankruptcy petition is filed against the
Borrower, or the Borrower makes a general assignment for the benefit of
creditors, (c) a receiver or similar official is appointed for a substantial
portion of the Borrower’s business, or the business is terminated, or, the
Borrower is liquidated or dissolved or (d) a Change of Control has occurred.
“Change of Control” means the Lender shall cease to own and control, of record
and beneficially, at least 51% of the outstanding equity interests of the
Borrower.

 

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3.                  Representations and Warranties of the Borrower. The Borrower
hereby represents and warrants to Lender as follows:

 

(a)                All of the agreements, acknowledgments, covenants,
representations and warranties of the Borrower set forth in the existing Loan
Documents, as the same are amended hereby, are hereby made again by the Borrower
as of the date of this Amendment and are all true and correct in all respects as
of the date hereof;

 

(b)                There has been and is no event of default or other breach or
nonfulfillment under any of the existing Loan Documents, and no other act,
omission, matter or circumstance has occurred or is in existence which, with the
giving of notice or the passage of time, or both, would give rise to or
constitute an event of default, breach or nonfulfillment under any of the
existing Loan Documents or this Amendment; and

 

(c)                The Borrower has taken all action necessary to fully
authorize the execution, delivery and performance of this Amendment and all
other agreements, documents and instruments contemplated hereby, and this
Amendment and all such other agreements, documents and instruments constitute in
all respects the legal, valid and binding obligation of the Borrower,
enforceable in accordance with their respective terms.

 

4.                  Effectiveness; Conditions Precedent. This Amendment shall
become effective, as of the date first written above, upon satisfaction of the
following conditions precedent:

 

(a)                Receipt by the Lender of counterparts of this Amendment,
which collectively shall have been executed on behalf of the Borrower and the
Lender; and

 

(b)                Receipt by the Lender of a prepayment of the Promissory Note
in the amount of One Million One Hundred Fifty Four Thousand Eighty Dollars and
Thirty Two Cents ($1,154,080.32).

 

5.                  Expenses. The Borrower agrees to pay all reasonable,
out-of-pocket costs and expenses of the Lender, the Borrower, AZOKKB, LLC and
their affiliates in connection with the preparation, execution and delivery of
this Amendment (including, for the avoidance of doubt, the reasonable and
documented counsel fees of such parties).

 

6.                  Survival of Representations and Warranties. All
representations and warranties contained in this Amendment and in the Loan
Documents as amended hereby shall survive the execution and delivery of this
Amendment and any investigation made by the Lender or the Lender’s agents or
representatives.

 

7.                  Continuing Effect; Inconsistency. All of the terms and
conditions of the Loan Documents remain in full force and effect, as amended
hereby. In the event there is determined to be any inconsistency between the
terms and conditions of the existing Loan Documents and the terms and conditions
of this Amendment, the terms and conditions of this Amendment shall govern to
the full extent of such inconsistency.

 

8.                  Cross Default; Remedies. This Agreement is a Loan Document.
Any breach of warranty, misrepresentation or nonfulfillment of any agreement on
the part of the Borrower of this Amendment shall be and constitutes a breach and
default under the Promissory Note. Lender shall have all rights and remedies
available under the Loan Documents, this Amendment and all agreements, documents
and instruments contemplated hereby, and all other rights and remedies available
to it at law, in equity or otherwise, upon any such breach of warranty,
misrepresentation or nonfulfillment of agreement by the Borrower.

 

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9.                  No Waiver. Nothing herein is intended or shall be construed
as a waiver by the Lender of any breach, default or other nonfulfillment by any
party under any of the Loan Documents.

 

10.              No Future Obligation to Amend, Extend or Renew. The Borrower
acknowledges and agrees that the Lender was not obligated or required to enter
into this Amendment and that the Lender has not agreed to, and is not obligated
or required to further revise, alter or amend any terms or conditions of any of
the Loan Documents, this Amendment or any agreement, document or instrument
contemplated hereby, or to provide the Borrower with any additional credit
facilities or other funds or credit.

 

11.              Receipt by the Borrower. The Borrower hereby acknowledges its
receipt of a true and correct copy of this Amendment and of each document
executed and delivered in connection herewith.

 

12.              Headings and Captions. The titles or captions of sections and
paragraphs in this Amendment are provided for convenience of reference only, and
shall not be considered a part of this Amendment for purposes of interpreting or
applying this Amendment, and such titles or captions do not define, limit,
extend, explain or describe the scope or extent of this Amendment or any of its
terms or conditions.

 

13.              Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.

 

14.              Notices. Any notice or other communication desired or required
to be made or given pursuant to this Amendment shall be made or given to the
parties at any address, and in any manner as provided in, the Master Note.

 

15.              Entire Agreement. This Amendment, the Loan Documents as amended
hereby, and all exhibits and schedules hereto and thereto, constitute the entire
agreement between the parties hereto pertaining to the subject matters hereof
and supersede all negotiations, preliminary agreements and all prior or
contemporaneous discussions and understandings of the parties hereto in
connection with the subject matters hereof. All exhibits and schedules are
incorporated into this Amendment as if set forth in their entirety and
constitute a part hereof. This Amendment is a Loan Document.

 

16.              Modifications in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision of this Amendment, or
consent to any departure therefrom, shall be effective unless the same shall be
in writing and signed by or on behalf of the party to be charged with the
enforcement thereof.

 

17.              Relationship. Nothing contained in this Amendment and no action
taken by the parties pursuant hereto shall be deemed to constitute the parties a
partnership, an association, a joint venture or other entity.

 

18.              Binding Effect on Successors and Assigns. This Amendment shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, successors, legal representatives and permitted assigns.

 

19.              Governing Law. This Amendment shall be governed by and shall be
interpreted according to federal law and the laws of New York.

 

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IN WITNESS WHEREOF, the parties have executed this Amendment to be duly executed
as of the date first above written.

 

 

LM CAPITAL SOLUTIONS, LLC

 

 

By: /s/ Igor Volshteyn

 

Name: Igor Volshteyn

 

Title: President

 

 

 

CCUR HOLDINGS, INC.

 

 

By: /s/ Igor Volshteyn

 

Name: Igor Volshteyn

 

Title: COO/President

 

 

 

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