Document:

ex101.htm

AMENDMENT TO

LINE OF CREDIT AGREEMENTS

THIS AMENDMENT TO LINE OF CREDIT AGREEMENTS (this “Amendment”), dated as of May 24, 2013, is entered into by and between Marine Drive Mobile Corp., a Nevada corporation (the “Borrower”) and Quarry Bay Capital LLC, a Delaware limited liability company (the “Lender”).

RECITALS

WHEREAS, the Borrower and Lender have entered into that certain Line of Credit Agreement, dated January 20, 2012, as amended (the “January LOC Agreement”).

WHEREAS, the Borrower and Lender have entered into that certain Line of Credit Agreement, dated July 20, 2012, as amended (the “July LOC Agreement”, and together with the January LOC Agreement, the “LOC Agreements”).

WHEREAS, the amounts loaned pursuant to the LOC Agreements are convertible into shares of common stock of the Borrower or payable upon demand of the Lender, at the Lender’s option.

WHEREAS, to forestall the demand of repayment of the amounts loaned pursuant to the LOC Agreements at this time, the Borrower and Lender have agreed (i) to make certain changes to the LOC Agreements as set forth herein, including changes to the conversion price, interest rate and security interest of the LOC Agreements, and (ii) to grant to the Lender 10,000,000 shares of common stock of the Borrower.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

AGREEMENT

1. Change to Interest Rate. Section 2 of each of the LOC Agreements is hereby amended and restated to read in its entirety as set forth below:

“Payment.  The Borrower shall pay to the Lender the amount of all indebtedness owing by the Borrower to the Lender in respect of this Amendment on demand, and shall pay interest thereon annually at the rate of six percent per annum, provided however, that effective as of January 1, 2013, the interest rate shall be increased to twelve percent per annum calculated annually.”

2. Change to Conversion Price. Section 8 of each of the LOC Agreements is hereby amended and restated to read in its entirety as set forth below

“Share Conversion.  The Lender shall have the right to convert all or any part of the unpaid indebtedness into shares of common stock of the Borrower at the price of $0.05 per share.”

3. Termination of Warrants.  Section 9 of the July LOC Agreement, entitled “Share Warrants”, is hereby deleted in its entirety, and any warrants to purchase any equity interest in the Company associated therewith (the “Share Warrants”) are hereby surrendered, terminated and of no further force or effect.  Immediately prior to the transactions contemplated by this Amendment, Lender is the sole owner of the Share Warrants, free and clear of all liens and encumbrances.  Neither the Share Warrants nor any interest therein had been sold, assigned, endorsed, transferred, deposited under any agreement, hypothecated, pledged for any bank or brokerage loan or otherwise disposed of in any manner by the Lender or on its behalf and no person, firm or corporation has any right, title, claim, equity or interest in, to or respecting any of the Share Warrants.

  

1

  

4. Addition of Security Interest. A new Section 9 is hereby added to each of the LOC Agreements, which in both cases shall read in its entirety as set forth below:

“Security Interest.  The full amount of this Agreement is secured by the Collateral identified and described as security herefor in the Security Agreement between the Lender and the Borrower dated May 24, 2013, as the same may be modified, amended, supplemented or restated from time to time.”

 

5. Effect on LOC Agreements. Except as specifically amended and modified by this Amendment, all terms, conditions, covenants and agreements set forth in each of the LOC Agreements shall remain in full force and effect.

6. Issuance of Common Stock.

	
a.  

	
Borrower agrees to issue to Lender 10,000,000 shares of the Borrower’s common stock (the “Securities”), subject to the restrictions and terms set forth herein.

 

	
b.  

	
Lender is acquiring the Securities for Lender’s own account, for investment purposes only, and not with a view toward the resale or distribution thereof within the meaning of the Securities Act of 1933 (the “Act”), except pursuant to effective registrations or qualifications relating thereto under the Act and applicable state securities or blue sky laws or pursuant to an exemption therefrom.

 

	
c.  

	
Lender is an “accredited investor” within the meaning of Regulation D of the rules and regulations promulgated under the Act and has such business or financial expertise as to be able to protect Lender’s own interests in connection with the purchase of the Securities

 

	
d.  

	
Lender has had the opportunity to ask questions of, and to receive answers from, appropriate executive officers of Borrower with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial condition and results of operations of Borrower.  Lender has had access to such financial and other information as is necessary in order for the Lender to make a fully informed decision as to investment in Borrower, and has had the opportunity to obtain any additional information necessary to verify any of such information to which Lender has had access.

 

	
e.  

	
Lender  understands that:  (a) the Securities have not been registered under the Act or the securities laws of any state or other jurisdiction in reliance upon exemptions from such registration requirements for non-public offerings; (b) the Securities may not be sold, pledged or otherwise transferred except pursuant to effective registrations or qualifications relating thereto under the Act and other applicable securities laws or pursuant to an exemption therefrom; and (c)  Borrower is not under any obligation to register or qualify the Securities under the Act or any other applicable securities laws, or to take any action to make any exemption from any such registration provisions available.  Lender understands that Lender may not transfer any Securities unless such Securities are registered under the Act or qualified under applicable state securities laws or unless with respect to the Securities, in the reasonable opinion of counsel to Borrower, exemptions from such registration and qualification requirements are available.  Borrower may require an opinion to such effect from counsel to Lender reasonably satisfactory to Borrower.  Lender has also been advised that exemptions from registration and qualification may not be available or may not permit Lender to transfer all or any of the Securities in the amounts or at the times proposed by Lender.

 

	
f.  

	
Lender will not sell, assign or transfer any of the Securities received by Lender in connection with this Amendment except (a) pursuant to an effective registration statement under the Act, (b) in conformity with the volume and other limitations of Rule 144 promulgated under the Act, or (c) in a transaction which, in the opinion of independent counsel to Lender delivered to Borrower and satisfactory to Borrower, is not required to be registered under the Act.  Borrower shall not have any obligation to effect a transfer of any Securities that is not in compliance with applicable federal and state securities laws.

 

  

2

  

	
g.  

	
Lender has been advised and acknowledges that Securities and Exchange Commission Rule (“SEC”) Rule 144 promulgated under the Act, which permits certain limited sales of unregistered securities, is not presently available with respect to the Securities and, in any event, requires that the Securities be held for a minimum of six months (and the sale thereof may be subject to certain volume and other limitations under Rule 144), after they have been purchased and paid for (within the meaning of Rule 144), before they may be resold under Rule 144.  Lender understands that Rule 144 may indefinitely apply to and restrict transfer of the Securities if Lender is an “affiliate” of Borrower and “current public information” about Borrower (as defined in Rule 144) is not publicly available.

 

	
h.  

	
Borrower may place the below legend or such other legends as it may reasonably deem appropriate, on each certificate or instrument representing Securities:

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN A TRANSACTION WHICH IS NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE ACT OR ANY APPLICABLE SECURITIES OR BLUE SKY LAWS AND, IN THE CASE OF A TRANSACTION NOT SUBJECT TO SUCH REGISTRATION REQUIREMENTS, UNLESS THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL TO THE HOLDER REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE ACT.

 

7. Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of Delaware.

8. Counterparts. This Amendment may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute one agreement.

[Remainder of Page Intentionally Blank – Signature Page Follows]

  

3

  

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date and year first written above.

 

BORROWER:

	
Marine Drive Mobile Corp.

By: /s/ Colin Macdonald                                                                

Name: Colin Macdonald                                                                

Title: President                                                                

LENDER:

	
Quarry Bay Capital LLC

By: /s/ Tom Sharp                                                                

Name: Tom Sharp

Title: President   

[Signature Page to Amendment to Line of Credit Agreements]

 

  

4ex102.htm

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT (this “Agreement”) is made as of May 24, 2013 (“Effective Date”) by and between Quarry Bay Capital LLC, a Delaware limited liability company (the “Secured Party”) and Marine Drive Mobile Corp., a Nevada corporation (the “Company”).

 

RECITALS

 

WHEREAS, the Company and Secured Party previously entered into that certain Line of Credit Agreement, dated January 20, 2012, as amended (the “January LOC Agreement”).

WHEREAS, the Company and Secured Party previously entered into that certain Line of Credit Agreement, dated July 20, 2012, as amended (the “July LOC Agreement”, and together with the January LOC Agreement, the “LOC Agreements”).

 

WHEREAS, pursuant to the Amendment to Line of Credit Agreements, dated as of even date herewith, the Company and Secured Party agreed to amend the terms of the LOC Agreements, to provide that the indebtedness subject to the LOC Agreements would be secured by the Collateral (as defined herein), pursuant to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, and the representations, warranties, covenants and conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:

 

AGREEMENT

 

1. SECURITY.

 

1.1 Grant of Security Interest.  As security for the prompt and punctual payment and performance of all Indebtedness (as defined below) of the Company to the Secured Party when and as due under the LOC Agreements, the Company hereby grants to the Secured Party a security interest in the Collateral (as defined below).  For purposes of this Agreement, “Indebtedness” means all obligations and liabilities of the Company to the Secured Party under the LOC Agreements.

 

1.2 Collateral Defined.  As used in this Agreement, the term “Collateral” means all assets of the Company, whether now owned by the Company or hereafter acquired, and all proceeds and products thereof and all accessions to, substitutions and replacements for, and rents and profits of each of the foregoing.

 

1.3 Secured Party Rights.  Secured Party is hereby authorized to file one or more UCC-1 Financing Statements with the Secretary of State of the State of Nevada evidencing and providing notice of the security interest granted pursuant to this Agreement in the Collateral.

 

1.4 Release of Collateral.  Upon the full and final discharge of all of the Indebtedness, the Secured Party will execute and deliver such documents as may be reasonably necessary and requested by the Company to release the Collateral from the security interest granted to the Secured Party in this Agreement.

 

1.5 Termination.  When all the Indebtedness has been paid in full and discharged, this Agreement and the security interest granted to the Secured Party hereunder will terminate and a UCC-3 Termination Statement shall be filed by Secured Party to indicate the termination of the security interest created hereby.

 

  

1

  

2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company hereby represents and warrants to the Secured Party that the statements contained in the following paragraphs of this Section 2 are all true and correct immediately prior to the execution of this Agreement.

 

2.1 Title.  The Company owns all right, title and interest in and to the Collateral.

 

2.2 Right to Grant Interest.  The Company has the right to grant the security interest under this Agreement to Secured Party in the Collateral.

 

2.3 No Bankruptcy.  Company is not subject to any bankruptcy case or insolvency proceedings before any court in any jurisdiction.  In the ninety (90) days preceding the date of this Agreement, the Company has not received any threat from any third party to subject the Company to any involuntary bankruptcy or insolvency proceeding.

 

3. COVENANTS OF THE COMPANY.  So long as any of the Indebtedness to the Secured Party has not been fully satisfied, the Company covenants and agrees with the Secured Party that:

 

3.1 Payment of Indebtedness.  The Company will pay all Indebtedness when due under the LOC Agreements;

 

3.2 Condition of Collateral.  The Company will maintain the Collateral in good condition and repair;

 

3.3 Further Assurances. The Company will execute and deliver such documents as Secured Party deems necessary to create, perfect and continue the security interests granted by this Agreement;

 

3.4 Taxes.  The Company will pay all taxes due and owing by the Company at such time as they become due;

 

3.5 Books and Records.  The Company will keep, in accordance with accounting principles consistently applied, complete and accurate books and records regarding all Collateral.

 

4. RIGHTS AND REMEDIES UPON EVENT OF DEFAULT.

 

4.1 General Remedies.  In the event the Company fails to timely make any payment required pursuant to Section 2 of the LOC Agreements, and such failure is not cured within thirty (30) days following written notice of such failure by the Secured Party (a “Default”), in addition to exercising any other rights or remedies the Secured Party may have under the LOC Agreements, at law or in equity, or pursuant to the provisions of the Uniform Commercial Code, the Secured Party may, at its option, and without demand first made, exercise any one or all of the following rights and remedies: (i) collect the Collateral and its proceeds; (ii) take possession of the Collateral wherever it may be found, using all reasonable means to do so, or require the Company to assemble the Collateral and make it available to the Secured Party at a place designated by the Secured Party that is reasonably convenient to the Company; (iii) proceed with the foreclosure of the security interest in the Collateral granted herein and the sale or endorsement and collection of the proceeds of the Collateral in any manner permitted by law or provided for herein; (iv) sell, lease or otherwise dispose of the Collateral at public or private sale, with or without having the Collateral at the place of sale; (v) institute a suit or other action against the Company for recovery on the LOC Agreements or to obtain possession or effect a sale of the Collateral; (vi) exercise any rights and remedies of a Company under the Uniform Commercial Code; and/or (vii) offset, against any payment due from the Company to the Secured Party, the whole or any part of any Indebtedness of the Secured Party to the Company.

 

  

2

  

4.2 No Election of Remedies.  The election by the Secured Party of any right or remedy will not prevent the Secured Party from exercising any other right or remedy against the Company.

 

4.3 Proceeds.  If a Default occurs, all proceeds and payments with respect to the Collateral will be retained by the Secured Party (or if received by the Company will be held in trust and will be forthwith delivered by the Company to the Secured Party in the original form received, endorsed in blank) and held by the Secured Party as part of the Collateral or applied by the Secured Party to the payment of the Indebtedness.

 

4.4 Sales of Collateral.  Any item of Collateral may be sold for cash or other value at public or private sale or other disposition and the proceeds thereof collected by or for the Secured Party as provided in the Uniform Commercial Code or under other applicable law.  The Company agrees to promptly execute and deliver, or promptly cause to be executed and delivered, such instruments, documents, assignments, waivers, certificates and affidavits and supply or cause to be supplied such further information and take such further action as the Secured Party may reasonably require in connection with any such sale or disposition.  The Secured Party will have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in the Company, which right or equity is hereby waived or released to the extent permitted by applicable law.

 

4.5 Application of Proceeds.  The proceeds of all sales and collections in respect of the Collateral, the application of which is not otherwise specifically herein provided for, will be applied as follows:  (i) first, to the payment of the costs and expenses of such sale or sales and collections and the actual attorneys’ fees and out-of-pocket expenses incurred by the Secured Party relating to costs of collection; (ii) second, any surplus then remaining will be applied to the payment of all unpaid principal under the LOC Agreements; and (iii) third, any surplus then remaining will be paid to the Company.

 

5. GENERAL PROVISIONS.

 

5.1 Survival of Warranties.  The representations, warranties and covenants of the Company and the Secured Party contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of any of the Secured Party or the Company, as the case may be.

 

5.2 Successors and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.

 

5.3 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of Delaware.

 

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

 

  

3

  

5.5 Headings.  The headings and captions used in this Agreement are used only for convenience and are not to be considered in construing or interpreting this Agreement.  All references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits and schedules attached hereto, all of which exhibits and schedules are incorporated herein by this reference.

 

5.6 Notices.  Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given (i) at the time of personal delivery, if delivery is in person; (ii) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States, with proof of delivery from the courier requested; or (iii) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries when addressed to the party to be notified at the address indicated for such party on the signature page hereto, or, or at such other address as any party or the Company may designate by giving ten (10) days’ advance written notice to all other parties.

 

5.7 Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

 

5.8 Further Assurances.  From and after the date of this Agreement, upon the request of the Secured Party or the Company, the Company and the Secured Party shall execute and deliver such instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.

 

5.9           Waiver and Amendment.  Any of the terms and provisions of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but only by a written instrument executed by such party.  This Agreement may be amended only by an agreement in writing executed by the parties.

5.10           Delay or Omission.  No delay or omission to exercise any right, power or remedy accruing to any party hereto shall impair any such right, power or remedy of such party nor be construed to be a waiver of any such right, power or remedy nor constitute any course of dealing or performance hereunder.

 

[Remainder of Page Intentionally Blank – Signature Page Follows]

 

  

4

  

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered as of the date first above written.

 

 

SECURED PARTY:

 

	
Quarry Bay Capital LLC

By: /s/ Tom Sharp                                                                      

Name: Tom Sharp                                                             

Title: President                                                                

 

COMPANY:

	
Marine Drive Mobile Corp.

 

By: /s/ Colin Macdonald                                                                

Name: Colin Macdonald

Title: President

 

[Signature Page to Security Agreement]

  

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00218-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00218-of-00352.parquet"}]]