Document:

Exhibit 4.68 TAL Guaranty Term Loan April 2014

DENTONS DRAFT
4/1/14

GUARANTY
GUARANTY (this “Guaranty”), dated as of April 2, 2014, is made by TAL INTERNATIONAL GROUP, INC., a Delaware corporation (together with its successors and permitted assigns, the “Guarantor”), in favor of the Beneficiaries (as defined below).
RECITALS:
WHEREAS, pursuant to the Term Loan Agreement, dated as of April 2, 2014 (as amended, restated, modified or supplemented from time to time in accordance with its terms, the “Term Loan Agreement”), TAL International Container Corporation, a Delaware corporation (together with its successors and permitted assigns, the “Borrower”), has requested from the lenders from time to time party thereto (each, a “Lender” and collectively, the “Lenders”), and SunTrust Bank, in its capacity as administrative agent and collateral agent (the “Administrative Agent” or the “Collateral Agent”, each of the Lenders, the Administrative Agent and the Collateral Agent, a “Beneficiary” and collectively, the “Beneficiaries”) a term loan facility in the initial principal amount of Three Hundred Fifty Million Dollars ($350,000,000), as such amount may be increased in accordance with the terms of the Term Loan Agreement;
WHEREAS, in order to induce the Administrative Agent, the Collateral Agent and the Lenders to enter into the Term Loan Agreement and the other Loan Documents referred to therein, the Guarantor will execute and deliver this Guaranty pursuant to which such Guarantor will guaranty, among other things, payment of all of the Obligations, as hereinafter defined; and
WHEREAS, the Borrower is a direct Subsidiary of the Guarantor and, as such, the Guarantor will receive substantial direct or indirect benefit from the transaction described in the Term Loan Agreement and therefore it is in the best interest of the Guarantor to enter into this Guaranty.
AGREEMENT:
Accordingly, the Guarantor agrees for the benefit of the Beneficiaries and each of their successors, permitted assigns and transferees, as follows:
1.    Certain Terms.
(a)    Capitalized terms used herein without definition have the respective meanings set forth in the Term Loan Agreement.
(b)    “Obligations” means and include all of the following: 
(i) any and all present and future payment obligations and liabilities of the Borrower and the Guarantor of every type and description to the Administrative Agent, the Collateral Agent or any Lender, or any of their successors or permitted assigns pursuant to or arising under this Term Loan Agreement and the other Loan Documents, whether for principal, interest, fees, expenses or other amounts (including reasonable and documented attorneys’ fees and expenses) actually incurred, in each case whether due or not due, direct or indirect, joint or several, absolute or contingent, voluntary or involuntary, liquidated or unliquidated, determined or undetermined, now or hereafter existing, renewed or restructured, whether or not from time to time decreased or extinguished and later increased, re-created or re-incurred, whether or not arising after the commencement of a proceeding under the Federal Bankruptcy Code (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding; and
(ii)    any and all reasonable sums incurred, paid or advanced by the Collateral Agent in order to protect or preserve the Collateral or to preserve or perfect the security interest of the Collateral Agent in the Collateral; and
(iii)    in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities referred to in clauses (a) and (b) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys’ fees actually incurred and court costs.
2.    Guaranty.  The Guarantor hereby absolutely, unconditionally and irrevocably guaranties to each of the Beneficiaries the full and punctual payment when due of all Obligations, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, and such guaranty is not conditional or contingent upon pursuit by any Beneficiary of any prior action or proceeding for collection, or for any other remedies the Beneficiaries may have, against the Borrower or any other Person.  All such Obligations shall be payable on demand.
3.    Expenses.  The Guarantor agrees to pay to the Beneficiaries any and all reasonable and documented costs and expenses (including reasonable and documented attorneys’ fees and expenses) actually incurred, that the Beneficiaries may incur in connection with (a) the collection of all sums guarantied hereunder and (b) the exercise or enforcement of any of the rights, powers or remedies of the Beneficiaries under this Guaranty or applicable law.
4.    Consent.  The Guarantor hereby consents and agrees that the time or place of payment of all, or any portion of, the Obligations may be exchanged or extended, in whole or in part, to a time certain or otherwise, and may be renewed or accelerated, in whole or in part; that any of the provisions of, and the maximum loan amount under, the Term Loan Agreement and other Loan Documents may be renewed, extended, modified, increased, accelerated, compromised, refinanced or waived; that the Borrower or any other obligor with respect to the Obligations may be granted indulgences or released from liability; that the insolvency, bankruptcy or dissolution of the Borrower, any other obligor or of the Guarantor shall not affect the obligations hereunder of the Guarantor; that neither the invalidity or unenforceability of any of the Obligations shall affect the obligations hereunder of the Guarantor; that no claim need be asserted against any trustee in bankruptcy or receiver or other representative in the event the Borrower, any other obligor or the Guarantor is adjudicated bankrupt or becomes insolvent; and that any property to the credit of the Borrower, any other obligor or the Guarantor or any other party liable for payment of  any of the Obligations may be released from time to time, in whole or in part, at, before or after the stated, extended or accelerated maturity of such Obligations, all of which (i) may be effected without notice to or further assent by the Guarantor and (ii) shall not affect the obligations of the Guarantor under this Guaranty.
5.    Waiver.  The Guarantor hereby expressly waives, to the extent permitted by applicable law:
(a)    Notice of acceptance of this Guaranty;
(b)    Presentment and demand for payment of the Obligations;
(c)    Protest and notice of dishonor or default to the Guarantor or to any other party with respect to the Obligations or any security for the Obligations;
(d)    Demand for payment under this Guaranty;
(e)    Notice of disposition of the Collateral or any other security for any Obligation;
(f)    Any defense by reason of impairment of:  (i) the Collateral or any other security now or hereafter held for the Obligations; or (ii) recourse against any party liable for the payment of all, or any portion of, the Obligations; and
(g)    Any other defense or counterclaim whatsoever, other than indefeasible payment and performance of the Obligations.
6.    Guaranty of Payment.  This Guaranty is a guaranty of payment and not of collection.  The Guarantor (a) waives any claim to marshaling of assets and (b) waives any right to require that an action be brought against the Borrower or any other Person prior to action against the Guarantor hereunder.  The Guarantor shall be released from all liability hereunder only upon payment in full of all the Obligations.
7.    Binding Effect.  The provisions of this Guaranty shall be binding upon the Guarantor and its successors and assigns, and shall inure to the benefit of each Beneficiary and its successors and permitted assigns.  The Guarantor may not assign its rights, benefits, duties and obligations under this Guaranty without the prior written consent of the Administrative Agent.
8.    Right of Set Off.  To the extent that the Guarantor has made payment to any Beneficiary of all or any portion of principal and interest required to be paid under the Term Loan Agreement, the full amount of such payment shall be deducted from amounts allocable and payable to such Beneficiary pursuant to the Term Loan Agreement.
9.    Limitation of Guaranty.  Any term or provision of this Guaranty or the Term Loan Agreement to the contrary notwithstanding, the maximum aggregate amount of the Obligations for which the Guarantor shall be liable shall not exceed the maximum amount for which the Guarantor can be liable without rendering this Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer.
10.    Representations and Warranties.  The Guarantor makes the following representations, warranties and agreements with the Beneficiaries as of the Closing Date and each Drawdown Date:
(a)    Corporation Status.  The Guarantor is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware.
(b)    Power and Authority.  The Guarantor has the corporate power and authority to execute, deliver and carry out the terms and provisions of this Guaranty and has taken all necessary corporate action to authorize the execution, delivery and performance of this Guaranty.  The Guarantor has duly executed and delivered the Guaranty, and this Guaranty constitutes the legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(c)    No Violation.  Neither the execution, delivery or performance by the Guarantor of this Guaranty, nor compliance by the Guarantor with the terms and provisions of this Guaranty, nor the consummation of the transactions contemplated herein (i) will contravene any material provision of any applicable law, statute, rule or regulation, or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of the property or assets of the Guarantor pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement or any other agreement, contract or instrument to which the Guarantor is a party or by which it or any of its material property or assets are bound or to which it may be subject which would reasonably be expected to have a material adverse effect on the Guarantor and its Subsidiaries taken as a whole, or (iii) will violate any material provision of the certificate of incorporation, bylaws or any other organizational document of the Guarantor.
(d)    Litigation.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of the Guarantor, threatened (i) with respect to this Guaranty or (ii) with respect to any other matter which could reasonably be expected to have a material adverse effect on the Guarantor and its Consolidated Subsidiaries taken as a whole.
(e)    Governmental Approvals.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any domestic or foreign governmental or public body or authority, or any subdivision thereof, is required to authorize, in respect of the Guarantor, or is required to be obtained by the Guarantor in connection with (i) the execution, delivery and performance by the Guarantor of this Guaranty or (ii) the legality, validity, binding effect or enforceability of this Guaranty with respect to the Guarantor.
(f)    End of Fiscal Year; Fiscal Quarters.  The Guarantor will cause (i) the fiscal year of the Guarantor and its Consolidated Subsidiaries to end on December 31 of each calendar year, and (ii) the fiscal quarters of the Guarantor and its Consolidated Subsidiaries to end on March 31, June 30, September 30 and December 31 of each year.
(g)    Qualified ECP Guarantor.  The Guarantor is a Qualified ECP Guarantor.
11.    Reinstatement.  This Guaranty shall remain in full force and effect and continue to be effective or be reinstated, as the case may be, if at any time payment or performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations or such part thereof, whether as a “voidable preference,” “fraudulent transfer,” or otherwise, all as though such payment or performance had not been made.  In the event that, and to the extent that, any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall, to the fullest extent permitted by law, be reinstated, and shall be deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
12.    Subrogation.  After (and not before) all amounts payable under or in respect of the Term Loan Agreement and the other Loan Documents and all other Obligations have been indefeasibly paid in full and in cash and fully performed, the Guarantor shall be subrogated to the rights of the Beneficiaries to receive payments in respect of the Term Loan Agreement and the other Loan Documents and all other Obligations, but only to the extent of amounts paid by the Guarantor under this Guaranty.
13.    Amendment.  This Guaranty may not be modified or amended except by a writing duly executed by the Guarantor and the Administrative Agent (acting at the direction of the Required Lenders).
14.    Governing Law.  THIS GUARANTY IS A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).  THE GUARANTOR AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS GUARANTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE GUARANTOR BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 18.  THE GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
15.    Severability.  Wherever possible, each provision of this Guaranty shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be invalid under such laws, such provision shall be ineffective only to the extent of such prohibition or invalidity, without affecting the remainder of such provision or the remaining provisions of this Guaranty, which shall be binding and enforceable to the fullest extent allowable by law.
16.    Waiver.  Waiver by the Administrative Agent (acting upon the instructions of the Required Lenders) of a breach of this Guaranty shall not operate as a waiver of any subsequent breach thereof.
17.    Signatures; Counterparts.  Facsimile or electronic transmissions of any executed original document or retransmission of any executed facsimile or electronic transmission shall be deemed to be the same as the delivery of an executed original.  At the request of any party hereto, the other parties hereto shall confirm facsimile or electronic transmissions, as applicable, by executing duplicate original documents and delivering the same to the requesting party or parties.  This Guaranty may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.
18.    Notices.  Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or courier service or electronic mail and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier or electronic mail, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier or electronic mail, except that notices and communications to the Administrative Agent or the Guarantor shall not be effective until received by the Administrative Agent or the Guarantor, as the case may be.  All notices and other communications shall be in writing and addressed as set forth in the Term Loan Agreement.  Notices to the Guarantor shall be made to: TAL International Group, Inc., 100 Manhattanville Road, Purchase, New York  10577-2135, Attention:  Marc A. Pearlin, Facsimile:  (914) 697-2526, or at such other addresses for notice as the Guarantor shall last have furnished in writing to the Person giving the notice.
19.    Waiver of Jury Trial.  THE GUARANTOR HERETO HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE ADMINISTRATIVE AGENT RELATING TO THE ENFORCEMENT OF THIS GUARANTY AND AGREES THAT IT WILL NOT SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  Except as prohibited by law, the Guarantor hereby waives any right it may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages.  The Guarantor (a) certifies that no representative, agent or attorney of any Beneficiary has represented, expressly or otherwise, that the Administrative Agent would not, in the event of litigation, seek to enforce the foregoing waivers and (b) acknowledges that each of the Administrative Agent and the Lenders have been induced to enter into the Loan Documents by, among other things, the waivers and certifications contained in this Section 19.  The Guarantor hereby agrees the Administrative Agent may file a copy of this Section 19 with any court as written evidence of the knowing, voluntary, and bargained for agreement of each party hereto to waive its right to trial by jury.
20.    Guaranty Enforceable by Administrative Agent.  Notwithstanding anything to the contrary contained elsewhere in this Guaranty, the Beneficiaries agree (by their acceptance of the benefits of this Guaranty) that this Guaranty may be enforced only by the action of the Administrative Agent, in each case acting upon the instructions of the Required Lenders.
21.    Termination.  After the date upon which all of the Obligations have been indefeasibly paid in full and in cash and performed in full, this Guaranty shall terminate and the Administrative Agent, at the request and expense of the Guarantor, will promptly execute and deliver to the Guarantor a proper instrument or instruments acknowledging the satisfaction and termination of this Guaranty.
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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the date first set forth above.
TAL INTERNATIONAL GROUP, INC. 
 
 
 
By:  ______________________________________ 
        Name: 
        Title:fnrg_ex401.htm

Exhibit 4.01

EXHIBIT B

FORM OF SENIOR

SECURED PROMISSORY NOTE

$[__________] April 25, 2014

 

FOR VALUE RECEIVED, the undersigned, ForceField Energy Inc., a Nevada corporation (the “Debtor”), hereby promises to pay to [___________], his heirs, successors and assigns (collectively, “Holder”), the principal sum of [$__________], with interest on the outstanding principal amount at the rate set forth below, all as further provided in this Senior Secured Promissory Note (this “Note”).  Capitalized terms used but not defined herein have the meanings assigned to them in the Stock Purchase Agreement, dated as of April 25, 2014 (the “Purchase Agreement”), by and among the Debtor, 17th Street ALD Management Corporation, a Delaware corporation (the “Company”), the Sellers and the Seller Representative.

 

This Note is one of a series of Senior Secured Promissory Notes issued by the Debtor as partial consideration for the Purchased Shares, all of which have substantially similar terms (collectively, the “Senior Notes”).  This Note shall be equal in right of payment as between all other Senior Notes then outstanding, but shall otherwise be senior in right of payment to any and all other obligations of Debtor.  The obligations of the Debtor under this Note are secured by a first priority security interest in and to all of the assets of the Company, as further set forth in the Security Agreement.

 

Section 1.                      Repayment.  The Debtor shall repay the principal amount outstanding under this Note in full, together with all accrued and unpaid interest then due hereon, on the one-year anniversary of the date of this Note (the “Maturity Date”).

 

Section 2.                      Payment of Interest.  Holder shall be entitled to receive interest on the unpaid principal amount of this Note and on all accrued and unpaid interest due hereunder from the date such interest is due, in each case at the rate of 5% per annum, compounded monthly on the last day of each month that this Note is outstanding (“Interest”). All accrued but unpaid Interest due hereunder shall be payable in cash on the Maturity Date, provided that the Debtor may, in its sole discretion, pay all or any portion of any accrued Interest due hereunder at any time and from time to time during the term of this Note.

 

Section 3.                      Payments.  All payments under this Note shall be:  (a) made to Holder in United States Dollars in immediately available funds, at the office of Holder at its address as set forth on the books and records of the Debtor, or such other place as Holder shall designate to the Debtor in writing from time to time and (b) applied first to fees, costs, expenses and all other amounts due Holder hereunder that are incurred by Holder after a breach hereunder, then to Interest and the balance to the principal balance then due under this Note.

 

Section 4.                      Prepayment; Survival.

 

(a)           The Debtor may prepay the outstanding principal amount under this Note and all accrued Interest thereon in whole or in part at any time and from time to time prior to the Maturity Date without any premium or penalty.

 

  

  

  

 

(c)           The Holder’s rights under Sections 8 and 9 shall survive any prepayment of this Note.

 

Section 5.                      Events of Default; Rights and Remedies on Default.

 

5.1           Event of Default.  The occurrence of any one or more of the following events shall constitute an “Event of Default”:

 

(a)           the Debtor shall fail to pay any amount of principal or Interest on this Note on the Maturity Date;

 

(b)           the Debtor or any of its Affiliates shall fail or neglect to perform or observe any other term, covenant, warranty or representation contained in this Note;

 

(c)           the occurrence of any of the following events:

 

(i)           the liquidation, dissolution, sale, lease, exchange or other disposition of all or substantially all of the Debtor’s assets;

 

(ii)           any merger, consolidation or other business combination or recapitalization that results in the holders of the issued and outstanding voting securities of the Debtor immediately prior to such transaction beneficially owning or controlling, directly or indirectly, less than a majority of the voting securities of the continuing or surviving entity immediately following such transaction; or

 

(iii)           any Person or Persons acting together or that would constitute a “group” for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), together or with any affiliates (as defined in Rule 12b-2 under the Exchange Act) thereof, other than the beneficial owners of the Debtor’s voting securities as of the date of this Note, beneficially owning (as defined in Rule 13d-3 of the Exchange Act) or controlling, directly or indirectly, at least 50% of the total voting power of the Debtor’s voting securities, other than in connection with the issuance of securities in a bona fide equity financing transaction.

 

(d)           any assets of the Debtor shall be attached, seized, levied upon or subjected to a writ or distress warrant, or come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within 30 days thereafter;

 

(e)           an application shall be made by the Debtor or any third party for the appointment of a receiver, trustee or custodian for any of the Debtor’s assets and in the case of an application made by a third party, the same is not dismissed within 30 days after the application therefor;

 

(f)           a petition under any bankruptcy, insolvency or similar law shall be filed by or against the Debtor, and in the case of any petition filed by any third party, such petition is not dismissed within 60 days of such filing, or the Debtor shall make an assignment for the benefit of its creditors or any case or proceeding shall be filed by or against the Debtor for its dissolution, liquidation, or termination;

 

  

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(g)           the insolvency of the Debtor;

 

(h)           an “Event of Default” under and as defined in (i) the Security Agreement, or (ii) the Pledge Agreement.

 

5.2           Remedies.  If an Event of Default shall have occurred and be continuing, the Holder of this Note may at its option:

 

(a)           without presentment, demand, notice, protest or legal process of any kind, declare all of the outstanding principal and Interest due under this Note immediately due and payable; and

 

(b)           exercise any other remedy specifically granted under this Note, the Security Agreement, the Pledge Agreement or  now or hereafter existing in equity, at law, by virtue of statute (including, without limitation, the Uniform Commercial Code).

 

Section 6.                      Covenants.  For so long as any principal or interest under this Note is outstanding:

 

6.1           Affirmative Covenants.

 

(a)           Existence.  The Debtor shall maintain its existence and the existence of each of its subsidiaries.

 

(b)           Conduct of Business.  The Debtor shall, and shall cause its subsidiaries to, conduct its business only in the ordinary course and consistent with past practice and in compliance with applicable laws.

 

 (c)           Notice.  Upon the occurrence of an Event of Default, Debtor shall immediately but in any event within five (5) days provide notice and reasonably detailed description of such Event of Default to Holder.

 

6.2           Negative Covenants.  Debtor shall not, without the prior written consent of Holder:

 

(a)           Merger or Consolidation.  Merge with, or consolidate into, any other entity (other than a merger of a wholly-owned subsidiary of Debtor into Debtor), unless all principal and accrued and unpaid interest through the closing date on this Note is paid in full at the closing of such transaction.

 

(b)           Disposition of Assets.  Sell, transfer or otherwise dispose of any assets of the Company or any of its subsidiaries outside of the ordinary course of business, other than sales, whether in a single transaction or a series of related transactions, for aggregate consideration of $500,000 or less for all such transactions in any 12-month period, unless this Note is paid in full at the closing of such transaction or transactions.

 

  

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(c)           Incurrence of Indebtedness.  Incur any Indebtedness at the Company that is not expressly subordinated in right to payment of all obligations of Debtor to Holder hereunder pursuant to terms and conditions that are satisfactory to Holder, in its sole discretion, provided that the restrictions contained in this Section 6.2(c) shall not apply to (i) unsecured indebtedness to any third party, (ii) indebtedness to finance the purchase of equipment by the Company, secured by purchase money liens on such equipment, not to exceed  $100,000 in the aggregate at any time or from time to time, or (iii) performance bonds issued by the Company in the ordinary course of its business, without taking into account the monetary obligation underlying any such bond.

 

(d)           Liens.  Cause, suffer or permit any of the assets of the Company to become subject to any Lien, other than purchase money liens on equipment acquired or held by Debtor for no more than $100,000 in the aggregate at any time or from time to time.

 

 Section 7.                      Waiver of Presentment, Etc.  The Debtor hereby expressly waives presentment for payment, demand for payment, notice of dishonor, protest, notice of protest, notice of non-payment, and all lack of diligence or delays in collection or enforcement of this Note.

 

Section 8.                      Expenses.  The Debtor agrees to reimburse Holder for any out-of-pocket costs or expenses, including but not limited to attorneys’ fees, reasonably incurred in connection with collection or enforcement by Holder of any of its rights under this Note, whether suit be brought or not.

 

Section 9.                      Miscellaneous.

 

9.1           Governing Law.

 

(a)           This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada that apply to contracts made and performed entirely in such state.

 

(b)           Any Action with respect to this Note and any matter arising out of or in connection with this Note shall be brought exclusively in the manner provided in the Purchase Agreement.

 

9.2           Headings.  The Section and other headings contained in this Note are inserted for convenience of reference only and will not affect the meaning or interpretation of this Note.

 

9.3           Amendments and Waivers.  This Note may not be modified or amended except by an instrument or instruments in writing signed by Holder and the Debtor.  Holder may, only by an instrument in writing, waive compliance by the Debtor with any term or provision hereof on the part of the Debtor to be performed or complied with.  No failure or delay of Holder in exercising any right or remedy hereunder shall operate as a waiver thereof, nor will any single or partial exercise of any right or power, or any abandonment or discontinuance of steps to enforce such right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The waiver by Holder of a breach of any term or provision hereof shall not be construed as a waiver of any subsequent breach.  The rights and remedies of Holder hereunder are cumulative and are not exclusive of any rights or remedies that it would otherwise have hereunder.

 

  

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9.4           Absence of Presumption.  With regard to each and every term and condition of this Note, the Debtor understands and agrees that the same has been mutually negotiated, prepared and drafted, and if at any time the Debtor or Holder is required to interpret or construe any such term or condition, no consideration will be given to the issue of whether the Debtor or Holder actually prepared, drafted or requested any term or condition of this Note.

 

9.5           Transaction Document.  This Note is a Transaction Document and accordingly is subject to the terms and provisions of the Purchase Agreement.

 

9.6           Assignment.  This Note may not be assigned by Debtor without the consent of the Holder.  This Note may be assigned by Holder at any time without the consent of Debtor, provided that Debtor shall have received five (5) Business Days’ notice prior to such assignment.

 

9.7           Limited Right of Setoff. This Note shall be subject to a limited right of setoff, as set forth in Section 2.3 of the Purchase Agreement.

 

The Debtor has executed and delivered this Note as of the date first written above.

FORCEFIELD ENERGY INC.

By:                                                      

      David Natan

      Chief Executive Officer

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