Document:

searchcore_ex105.htm

EXHIBIT 10.5

 

SECURED PROMISSORY NOTE

 

	$1,625,000	
August 1, 2012

Newport Beach, CA

 

For value received, SearchCore, Inc., a Nevada corporation (the “Company”), promises to pay to Justin Hartfield, or his assigns (the “Holder”) the principal sum of One Million Six Hundred Twenty-Five Thousand Dollars ($1,625,000). The principal hereof shall be due and payable on or before 5:00 p.m., Pacific Standard Time, on June 5, 2014 (the “Maturity Date”) (unless such payment date is accelerated as provided in Section 4 hereof). Payment of all amounts due hereunder shall be made to the Holder per the instructions in Section 5 hereof. Interest shall accrue on the outstanding principal amount on an annual basis at a rate of One and One Hundredth Percent
(1.01%).

 

1. HISTORY OF THE NOTE. This Note is being delivered to Holder as consideration under that certain Global Securities Purchase, Consulting and Resignation Agreement of even date herewith.

 

2. PAYMENT OF THE NOTE. Throughout the term of the Note, Company shall make monthly payments of Seventy Eight Thousand Ninety Nine Dollars and Thirty Eight Cents ($78,099.38) beginning September 5, 2012 and continuing on the fifth (5th) of each month thereafter for a total of Twenty-one (21) months. Each payment shall be credited first to accrued interest and then principal; interest shall then cease on the portion of the principal credited. All payments shall be made in lawful money of the United
States of America.

 

If any payment of principal or interest under this Note shall not be made within ten (10) business days when due, a late charge of ten percent (10%) of the outstanding payment amount may be charged by Holder for the purpose of defraying the expenses incident to handling such delinquent payments. Such late charge represents a reasonable sum considering all of the circumstances existing on the date of this Note and represents a fair and reasonable estimate of the costs that will be sustained by Holder due to the failure of Company to make timely payments.

 

3. PREPAYMENT. The Company may, at its option, at any time and from time to time, prepay all or any part of the principal balance of this Note, without penalty or premium.

 

4. DEFAULT. The occurrence of any one of the following events shall constitute an Event of Default:

 

(a) The non-payment, when due, of any principal pursuant to this Note;

 

(b) The material breach of any representation or warranty in this Note;

 

  

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(c) The breach of any covenant or undertaking, not otherwise provided for in this Section 4;

 

(d) The commencement by the Company of any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, receivership, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or the adjudication of the Company as insolvent or bankrupt by a decree of a court of competent jurisdiction; or the petition or application by the Company for, acquiescence in, or consent by the Company to, the appointment of any receiver or trustee for the Company or for all or a substantial part of the property of the Company; or the assignment by the Company for the benefit of creditors; or the written admission of the Company of its inability
to pay its debts as they mature; or

 

(e) The commencement against the Company of any proceeding relating to the Company under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, receivership, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, provided, however, that the commencement of such a proceeding shall not constitute an Event of Default unless the Company consents to the same or admits in writing the material allegations of same, or said proceeding shall remain undismissed for 20 days; or the issuance of any order, judgment or decree for the appointment of a receiver or trustee for the Company or for all or a substantial part of the property of the Company, which
order, judgment or decree remains undismissed for 20 days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Company.

 

In the event the Holder becomes aware of a breach of Sections 4(a), (b) or (c), then provided such breach is capable of being cured by Company, the Holder shall notify the Company in writing of such breach and the Company shall have thirty (30) calendar days after notice to cure such breach.

 

Upon the occurrence of any Default or Event of Default, the Holder, may, by written notice to the Company, declare all or any portion of the unpaid principal amount due to Holder, immediately due and payable, in which event it shall immediately be and become due and payable, provided that upon the occurrence of an Event of Default as set forth in paragraph (d) or paragraph (e) hereof, all or any portion of the unpaid principal amount due to Holder shall immediately become due and payable without any such notice.

 

5. NOTICES. All notices provided for in this Agreement shall be in writing signed by the party giving such notice, and delivered personally or sent by overnight courier or messenger or by facsimile transmission. Notices shall be deemed to have been received on the date of personal delivery or facsimile transmission. Notices shall be sent to the addresses set forth below:

 

  

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If to the Holder:

 

Justin Hartfield

___________________________________

___________________________________

Facsimile: ___________________________

 

If to the Company:

 

SearchCore, Inc.

1300 Dove Street, Suite 100

Newport Beach, CA 92660

Attn: Jim Pakulis

Email: jpakulis@searchcore.com

 

with a copy to:

 

The Lebrecht Group, APLC

9900 Research Drive

Irvine, CA 92688

Attn: Brian A. Lebrecht, Esq.

Facsimile (949) 635-1244

 

or at such other address as the Company or Holder may designate by ten (10) days advance written notice to the other Party hereto.

 

6. ASSIGNMENT. In the event Company sells substantially all of its assets owned at the time of execution of this Note, Holder hereby agrees to the assignment of the Note to the buyer or transferee of the assets of the Company, provided that the assignee in such transaction assumes all of the Company’s obligations under this Note, the Pledge and Security Agreement, and the Global Securities Purchase, Consulting and Resignation Agreement of even date herewith. The Company will execute or obtain all
documents reasonably requested by the Holder in furtherance of such purported assignee’s assumption of obligations.

 

7. GOVERNING LAW; VENUE. This Note is executed pursuant to and shall be interpreted and governed for all purposes under the laws of the State of California. Any cause of action brought to enforce any provision of this Note shall be brought in the appropriate court in Orange County, California. If any provision of this Agreement is declared void, such provision shall be deemed severed from this Note, which shall otherwise remain in full force and effect. This Note shall supersede any previous agreements,
written or oral, expressed or implied, between the parties relating to the subject matter hereof.

 

  

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8. ATTORNEY’S FEES. The Company agreed to pay the following costs, expenses, and attorneys' fees paid or incurred by Holder, or adjudged by a court: (i) reasonable costs of collection, costs, and expenses, and attorneys' fees paid or incurred in connection with the collection or enforcement of this Note, and (ii) costs of suit and such sum as the court may adjudge as attorneys' fees in any action to enforce payment of this Note or any part of it.

 

9. CONFORMITY WITH LAW. It is the intention of the Company and of the Holder to conform strictly to applicable usury and similar laws. Accordingly, notwithstanding anything to the contrary in this Note, it is agreed that the aggregate of all charges which constitute interest under applicable usury and similar laws that are contracted for, chargeable or receivable under or in respect of this Note, shall under no circumstances exceed the maximum amount of interest permitted by such laws, and any excess,
whether occasioned by acceleration or maturity of this Note or otherwise, shall be canceled automatically, and if theretofore paid, shall be either refunded to the Company or credited on the principal amount of this Note.

 

10. MODIFICATION; WAIVER. No modification or waiver of any provision of this Note or consent to departure therefrom shall be effective unless in writing and approved by the Company and the Holder. No delay or omission by Holder in exercising any right hereunder shall operate as a waiver of such right or any other right of Holder. A waiver on one occasion shall not be construed as a bar to or waiver of any right in the future.

 

11. SECURITY. This Note is secured by the Collateral as described in that certain Pledge and Security Agreement of even date herewith.

 

12. SEVERABILITY; REFORMATION. In case any one or more of the provisions or parts of a provision contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement; and this Agreement shall, to the fullest extent lawful, be reformed and construed as if such invalid or illegal or unenforceable provision, or part
of a provision, had never been contained herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. Without limiting the foregoing, if any provision (or part of provision) contained in this Agreement shall for any reason be held to be excessively broad as to duration, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the fullest extent compatible with then existing applicable law.

 

13. TRIAL BY JURY. COMPANY (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY COMPANY, KNOWINGLY AND
VOLUNTARILY.

 

  

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IN WITNESS WHEREOF, Company has executed this Promissory Note as of the date first written above.

 

	 	
“Company”

	 	 
	 	
SearchCore, Inc.

	 	
a Nevada corporation

	 	 
	 	/s/ James Pakulis 	 
	 	
By: James Pakulis

	 	
Its: Chief Executive Officer

	 	 
	 	 
	
Acknowledged:

	 
	 	 
	/s/ Justin Hartfield 	 	 
	
Justin Hartfield, an individual

	 

 

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EXHIBIT 10.6

 

CONSULTING AGREEMENT

 

This Consulting Agreement (this “Agreement”) is made and entered into effective as of July [insert], 2012 (the “Effective Date”) by and between SearchCore, Inc., a Nevada corporation (the “Company”), WeedMaps Media, Inc., a Nevada corporation (“WeedMaps”) and Justin Hartfield, an individual (“Hartfield”). The Company, WeedMaps and Hartfield shall each be referred to herein as a “Party” and collectively as the “Parties.”

 

WITNESSETH

 

WHEREAS, the Parties have entered into that certain Global Securities Purchase, Consulting and Resignation Agreement (the “Global Agreement”), of even date herewith;

 

WHEREAS, the Parties desire to enter into a consulting agreement whereby Hartfield will provide certain consulting services to the Company and the Company will compensate Hartfield as agreed upon herein;

 

NOW THEREFORE, in consideration of the promises and respective mutual agreement herein contained, the sufficiency and receipt of which is hereby acknowledged, it is agreed by and among the Parties hereto as follows:

 

ARTICLE 1

SERVICES TO BE PROVIDED BY HARTFIELD

 

	
1.   

	
Consulting Services. Hartfield shall provide continuous support, guidance, advice and instructions as it relates to the business of WeedMaps (the “Consulting Services”). Hartfield shall provide a total of [insert] hours of Consulting Services per week for a total of thirty (30) months beginning August 1, 2012, or upon the completion of the payment as outlined below. The Consulting Services may be provided in person, via telephone, electronic mail or other acceptable means as determined by the Parties.

 

ARTICLE 2

PAYMENT BY COMPANY

 

	
2.   

	
Payment Terms. The company shall pay Hartfield for the Consulting Services on a revenue sharing basis as follows:

 

	
a.   

	
The Company shall pay Hartfield a total maximum of One Million Six Hundred and Twenty-five Thousand Dollars ($1,625,000.00) to be paid in monthly payments beginning September 1, 2012, and ending March 1, 2015, or upon the total payment of One Million Six Hundred and Twenty-five Thousand Dollars ($1,625,000), based on the gross revenue of WeedMaps in the preceding month as follows:

 

  

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i.   

	
If the gross revenues of WeedMaps are equal to or less than Six Hundred Thousand Dollars ($600,000.00) in a particular month, the Company shall pay Hartfield Zero Dollars ($0.00);

 

	
ii.   

	
If the gross revenues of WeedMaps are greater than $600,000.00 and equal to or less than $800,000.00, the Company shall Hartfield $15,000.00;

 

	
iii.   

	
If the gross revenues of WeedMaps are greater than $800,000.00 and equal to or less than $1,000,000.00, the Company shall pay Hartfield $37,142.00;

 

	
iv.   

	
If the gross revenues of WeedMaps are greater than $1,000,000.00 and equal to or less than $1,200,000.00, the Company shall pay Hartfield $46,428.00;

 

	
v.   

	
If the gross revenues of WeedMaps are greater than $1,200,000.00 and equal to or less than $1,600,000.00, the Company shall Hartfield $58,035.00;

 

	
vi.   

	
If the gross revenues of WeedMaps are greater than $1,600,000.00 and equal to or less than $1,800,000.00, the Company shall pay Hartfield $69,642.00;

 

	
vii.   

	
If the gross revenues of WeedMaps are greater than $1,800,000.00 and equal to or less than $2,000,000.00, the Company shall pay Hartfield $83,571.00;

 

	
viii.   

	
If the gross revenues of WeedMaps are greater than $2,000,000.00, the Company shall pay Hartfield $150,000.00.

 

ARTICLE 3

MISCELLANEOUS

 

	
3.   

	
Expenses. Except as otherwise specifically provided for herein, whether or not the transactions contemplated hereby are consummated, each of the Parties hereto shall bear the cost of all fees and expenses relating to or arising from its compliance with the various provisions of this Agreement and such Party’s covenants to be performed hereunder, and except as otherwise specifically provided for herein, each of the Parties hereto agrees to pay all of its own expenses (including, without limitation, attorneys and accountants’ fees and printing expenses) incurred in connection with this Agreement, the transactions contemplated hereby, the negotiations leading to the same and the preparations made for carrying the same into effect.

 

  

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4.   

	
Entire Agreement. This Agreement, together with its exhibits, sets forth the entire agreement and understanding of the Parties hereto with respect to the transactions contemplated hereby, and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any Party hereto which is not embodied in this Agreement or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth.

 

	
5.   

	
Incorporated by Reference. All documents delivered as part hereof or incident hereto are incorporated as a part of this Agreement by reference.

 

	
6.   

	
Remedies Cumulative. No remedy herein conferred upon any Party is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

 

	
7.   

	
Execution of Additional Documents. Each Party hereto shall make, execute, acknowledge and deliver such other instruments and documents, and take all such other actions as may be reasonably required in order to effectuate the purposes of this Agreement and to consummate the transactions contemplated hereby.

 

	
8.   

	
Notices. All notices provided for in this Agreement shall be in writing signed by the party giving such notice, and delivered personally or sent by overnight courier or messenger or by facsimile transmission. Notices shall be deemed to have been received on the date of personal delivery or facsimile transmission. Notices shall be sent to the addresses set forth below:

 

If to the Hartfield:

 

Justin Hartfield

_______________________________________

_______________________________________

 

If to WeedMaps or the Company:

 

SearchCore, Inc.

1300 Dove Street, Suite 100

Newport Beach, CA 92660

Attn: Jim Pakulis

Facsimile (949) 

 

  

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with a copy to:

 

The Lebrecht Group, APLC

9900 Research Drive

Irvine, CA 92688

Attn: Brian A. Lebrecht, Esq.

Facsimile (949) 635-1244

 

	
9.   

	
Governing Law. This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of California including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws.

 

	
10.   

	
Venue. The parties submit to the jurisdiction of the Courts of the State of California or a Federal Court empanelled in the State of California, County of Orange, for the resolution of all legal disputes arising under the terms of this Agreement.

 

	
11.   

	
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

 

	
12.   

	
Attorneys’ Fees. Except as otherwise provided herein, if a dispute should arise between the Parties, the prevailing Party shall be reimbursed by the nonprevailing Party for all reasonable expenses incurred in resolving such dispute, including reasonable attorneys’ fees exclusive of such amount of attorneys’ fees as shall be a premium for result or for risk of loss under a contingency fee arrangement.

 

	
13.   

	
Binding Effect and Assignment. This Agreement shall inure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, legal representatives and assigns.

 

	
14.   

	
Third Party Beneficiaries. The Parties intend that any relevant ancillary parties to the Parties, including companies where the Parties have an ownership interest, will be third party beneficiaries to this Agreement, including the waiver and release, and can avail themselves of the materials terms of this Agreement, if necessary.

 

	
15.   

	
Taxes. Any income taxes required to be paid in connection with the payments due hereunder, shall be borne by the party required to make such payment. Any withholding taxes in the nature of a tax on income shall be deducted from payments due, and the party required to withhold such tax shall furnish to the party receiving such payment all documentation necessary to prove the proper amount to withhold of such taxes and to prove payment to the tax authority of such required withholding.

 

[remainder of page intentionally left blank; signature page to follow]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the date first written hereinabove.

 

 

	
“Hartfield”

	
“Company”

	 	 
	 	
SearchCore, Inc.

a Nevada corporation

	 	 
	/s/ Justin Hartfield 	 	/s/ James Pakulis 	 
	
Justin Hartfield, an individual

	
By: James Palukis

	 	
Its: Chief Executive Officer

	 	 
	 	
“WeedMaps”

 

WeedMaps Media, Inc.

a Nevada corporation

	 	 
	 	/s/ James Pakulis 	 
	 	
By: James Pakulis

Its: Chief Executive Officer

 

 

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