Document:

f8k063014ex10iii_excelcorp.htm

Exhibit 10.3

Execution

PROMISSORY NOTE

 

	$1,200,000.00	June 30, 2014

 

FOR VALUE RECEIVED, Payprotec Oregon, LLC d/b/a Securus Payments, an Oregon limited liability company with a principal office at 7724 SE Aspen Summit Drive, Suite 300, Portland, Oregon 97266 (the “Borrower”) hereby promises to pay to the order of BlueAcre Ventures LLC, a Delaware limited liability company (“Lender”), the principal sum of one million two hundred thousand dollars and 00/100 cents ($1,200,000.00) with interest thereon, to be computed from the date hereof, and which remains unpaid, in lawful money of the United States and immediately available funds. This Promissory Note (the “Note”) is issued pursuant to the terms and provisions of that certain Secured Residual Loan Agreement of even date herewith, by and between the Lender and Borrower (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Loan Agreement”). All capitalized terms used but not defined herein shall have the meanings assigned to them in the Loan Agreement.

	
  

	
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The outstanding principal balance of this Note shall bear simple interest at a rate equal to fifteen percent (15%) per annum, calculated based on the beginning Principal Amount of the Note and not reduced for any principal repayment over the term.  As a result of the foregoing calculation of interest, the effective rate of interest on this Note is twenty-nine and 31/100 percent (29.31%).

	
  

	
2.

	
Interest on the outstanding principal balance of this Note shall be computed on the basis of a year of three hundred sixty-five (365) days.

	
  

	
3.

	
Beginning on the Effective Date and continuing on each Due Date up to and including the Maturity Date, the Borrower shall pay Lender, or cause to be paid to Lender from the Residuals pursuant to the Loan Agreement, the Monthly Payment to satisfy the payment of the Principal Amount and interest due hereunder.

	
  

	
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The outstanding principal balance hereof, together with all accrued interest and all additional Loan Obligations, if not paid sooner, shall be due and payable in full on the Maturity Date.

	
  

	
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All payments shall, at the option of Lender, be applied first to any costs of collection, second to any late charges, third to accrued interest and the remainder thereof to principal.

	
  

	
6.

	
Any portion of the Loan repaid may not be reborrowed.

	
  

	
7.

	
In addition to the rights and remedies set forth in the Loan Agreement, if an Event of Default occurs, then the unpaid principal balance of this Note, including any accrued interest, shall automatically bear interest at the applicable Default Rate.

	
  

	
8.

	
If the Borrower fails to make any payment hereunder or pursuant to the Loan Agreement, within ten (10) days of the due date thereof, the Borrower shall, in addition to such amount, pay a late charge equal to five percent (5%) of the amount of such unpaid amount.

	
  

	
9.

	
This Note is secured by, among other instruments, the Loan Agreement. In the event that any such security is found to be invalid for whatever reason, such invalidity shall constitute an Event of Default hereunder. All of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Agreement, or any instrument securing this Note are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence with respect to this Note.

 

  

  

  

 

	
  

	
10.

	
Upon the occurrence at any time of an Event of Default, the outstanding principal balance hereof plus accrued interest hereon plus all other amounts due hereunder or under any other Loan Documents, including reasonable attorneys’ fees and costs, shall, at the option of Lender, be immediately due and payable, without notice or demand and Lender shall be entitled to exercise all remedies provided in this Note, the Loan Agreement or any of the Loan Documents.

	
  

	
11.

	
Upon the occurrence at any time of an Event of Default, Lender shall have the right to set off any and all amounts due hereunder by the Borrower to Lender against any indebtedness or obligation of Lender to the Borrower.

	
  

	
12.

	
The Borrower promises to pay all reasonable costs of collection of this Note, including, but not limited to, attorneys’ fees paid or incurred by Lender on account of such collection, whether or not suit is filed with respect thereto and whether or not such costs are paid or incurred, or to be paid or incurred, prior to or after the entry of judgment.

	
  

	
13.

	
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ARIZONA AS IF WHOLLY PERFORMED IN THE STATE OF ARIZONA, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF. The parties hereby agree that any suit to enforce or interpret any provision of this Note or arising out of or based upon this Note or the business relationship between the parties hereto shall be brought in federal or state court in Scottsdale, Arizona.

	
  

	
14.

	
In the event of any conflict between this Note and the Loan Agreement, the Loan Agreement shall control.

	  	
PAYPROTEC OREGON, LLC D/B/A SECURUS PAYMENTS

 

By: _______________________________

Name/Title: _________________________

E-mail: _____________________________f8k063014ex10iv_excelcorp.htm

Exhibit 10.4

 

SETTLEMENT AGREEMENT AND RELEASE

THIS SETTLEMENT AGREEMENT AND RELEASE ("Settlement Agreement'') is hereby entered into as of the last date executed below (the “Effective Date”) by and between:

	
  

	
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Payprotec Oregon LLC.  D/B/A Securus Payments (“Securus”)

 

	
  

	
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Excel Corporation  (“Excel”)

 

	
  

	
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Steven Lemma

 

	
  

	
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Mychol Robirds

 

	
  

	
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Shalom Auerbach

 

	
  

	
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E-Cig Ventures, LLC (“E-Cig”)

 

RECITALS

WHEREAS, On or about January 27, 2014 Securus and E-Cig executed a Residual Purchase Agreement related to $250,000 of residuals pursuant to Securus’s agreements with First Data Merchant Services Corporation; and

WHEREAS, E-Cig and Securus executed an Option Agreement concurrent with the Residual Purchase Agreement referred to above (collectively, the “RPA”); and

WHEREAS, Excel and E-Cig executed a Securities Exchange Agreement on April 21, 2014 whereby Excel issued 2,000,000 shares of its common stock in consideration for a 10% membership interest in Securus E-Cig received in connection with the RPA; and

WHEREAS, a dispute has arisen as to the efficacy of the underlying deal and the parties wish to enter into this Settlement Agreement to settle all disputes related to the RPA; and

WHEREAS, Excel and Securus are desirous of buying out E-Cig’s repurchase option and settling all amounts due under the RPA for a total price of $2,700,000, as will be set forth below.

  

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NOW, THEREFORE, in consideration of the foregoing recitals and the Settlement Agreement herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:

AGREEMENT

1.           Securus shall pay, or cause to be paid on its behalf, E-Cig Ventures (or its designees) $2,400,000 in cash from the closing of a new financing transaction with respect to its residuals.

2.           Additionally, Excel will issue a $300,000 note in favor of E-Cig to be paid in 12 equal installments starting 91 days after close with interest at 6%.

3.           E-Cig  will retain 1,000,000 of the 2,000,000 shares of Excel common stock issued after it receives payment as per paragraph 1 and 2 above.  The other 1,000,000 shares will be returned to Excel. Until that time, all 2,000,000 shares will remain under the ownership and control of E-Cig, with 1,000,000 of those shares being held in escrow as per the terms of this agreement,

4.           Securus will indemnify Shalom Auerbach and E-Cig excepting fraud.

5.           E-Cig  will retain only $85,000 of the Residual paid on or about June 20, 2014.  If Securus does not complete its refinancing by June 30, 2014, it will pay an additional amount of $25,000 on June 30, 2014.  The $85,000  paid with respect to this section 6 shall not be credited towards the $2,400,000 due upon the closing of Securus’s refinancing, however the additional $25,000 shall be credited towards the $2,400,000.

6.           E-Cig and Shalom Auerbach represent that Shalom Auerbach is the sole member and 100% owner of E-Cig.

  

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7.           Cross-Release by All Parties: Upon completion of the above, every party hereto and every other affiliated name  and entity of the aforementioned, excepting claims for fraud shall be deemed to have irrevocably released one another and any other entity or affiliate of the aforementioned parties hereto, their officers, directors, members, affiliates, subsidiaries and related entities from all actions, causes of action, claims, counterclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents executions, attorneys’ fees, claims, and demands whatsoever, in law, admiralty or equity, including, but not limited to, all claims and allegations set forth in this deal and all other deals and every of its affiliates, subsidiaries, heirs, executors, administrators, successors and assigns hereafter can, shall or may, have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the Effective Date of this Agreement.

8.           Acknowledgement; Covenants: In consideration of the payment in full of the obligations set forth above, the parties agree: (i) that each party to the RPA shall be released from all their respective obligations thereunder and the RPA shall be of no further force and effect; (ii) that all Uniform Commercial Code releases, terminations and any similar instruments shall be filed within fifteen (15) days of the Effective Date; and (iii) to take any other such actions necessary to evidence the consummation of the transactions hereof and that the Residuals (as defined in the RPA) are free and clear of all liens and any other encumbrances.

9.           Non-Disparagement: The Parties and its officers, directors, agents and representatives individually and collectively covenant, represent and warrant that they shall not and will not, from the date hereof, criticize, denigrate or disparage, directly or indirectly, each other and/or any of their present and former directors, officers, partners, managers, members, agents, employees or attorneys.  Should either party violate this provision, in addition to the penalties set forth in paragraph 15 below, the non-defaulting party will be allowed to defend itself without regard to this provision and not be subject to any penalties contained in this agreement.

  

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10.         Entire Agreement and Successors in Interest: This Settlement Agreement contains the entire agreement between the parties with regard to the matters set forth herein and shall be binding upon and inure to the benefit of the executors, administrators, personal representatives, heirs, successors and assigns of each.

11.         Representation of Comprehension of Document: This Agreement has been negotiated at arm’s length among the parties, and each of the parties has been afforded the opportunity to have the Agreement reviewed by legal counsel. Accordingly, each of the parties shall be deemed to have participated in the preparation of this Agreement.

12.         Governing Law: This Settlement Agreement shall be construed and interpreted in accordance with the laws of the State of New York without regard to any applicable conflicts of laws principles. Any litigation arising between the parties hereto, out of this Agreement, shall be brought in Supreme Court of New York, Kings County.

13.         Additional Documents: All parties agree to cooperate fully and execute any and all supplementary documents and to take all additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Settlement Agreement.

14.         Severability: The provisions of this Agreement are severable and the invalidity of one (1) or more of the provisions herein shall not have any effect upon the validity or enforceability of any other provision.

  

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15.         Entire Agreement: This Agreement and the Exhibits and other documents delivered pursuant hereto or incorporated herein by reference, contain and constitute the entire agreement among the parties with respect to the subject matter hereof and thereof, and supersede and cancel any prior agreements, representations, warranties, or communications, whether oral or written, among the parties relating to the transactions contemplated by this Agreement. Neither this Agreement nor any provision hereof may be changed, waived, discharged, or terminated orally, but only by an agreement in writing and signed by the parties hereto.

16.         Confidentiality:  The Parties shall keep the contents of this agreement strictly confidential and shall not use same for any purpose other than to complete the terms of this agreement as are contained herein, provided that confidential information may be disclosed by Excel pursuant to FINRA or SEC reporting requirements or in compliance with other legal requirements and Excel agrees to inform E-Cig of such required disclosure on a timely basis.  The Parties agree that if either Party discloses any of the contents of this agreement to anyone, at any time, for any reason, the non-disclosing Party shall be entitled to such relief as may be available to it pursuant hereto, at law or in equity, including, without limiting the generality of the foregoing, any proceedings to: (i) obtain direct damages for any breach of this Agreement not to be below One Million dollars ($1,000,000); (ii) order the specific performance thereof; or (iii) enjoin the breach of such provisions. This provision shall survive closing for a period of one (5) years.

 

(Signatures Appear on Next Page)

  

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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed as of the Effective Date.

	
Dated: __________________

	  	
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