Document:

Exhibit 10.93

 

Macadamia Nut Processing Agreement

 

ML Macadamia Orchards, L.P. & Buderim Macadamias of Hawaii, LLC

 

I.                                        Preamble.

 

This Macadamia Nut Processing Agreement is entered into on the date set forth below by and between ML Macadamia Orchards, L.P., a Delaware Partnership (“MLMO”) whose address is 26-238 Hawaii Belt Rd., Hilo, HI 96720, and Buderim Macadamias of Hawaii, LLC, a Hawaii Limited Liability Company, dba MacFarms of Hawaii (“MFH”) whose address is 89-406 Mamalahoa Highway, Captain Cook, HI 96704.

 

Whereas, MFH is experienced and capable in all aspects of the business of processing macadamia nuts;

 

Whereas, MLMO is the legal and beneficial owner of macadamia nut crop produced in certain macadamia nut orchards in Hawaii;

 

Whereas, MLMO desires to engage MFH to process between 1,500,000 and 7,000,000 pounds of wet-in-shell (“WIS”) macadamia nuts into kernel and MFH desires to process such macadamia nuts from MLMO, as provided herein;

 

Now, therefore, in consideration of the promises and mutual covenants and agreements set forth herein, the parties agree as follows:

 

II.                                   Term.

 

This Agreement shall be deemed to have commenced for all purposes as of January 1, 2013 and shall continue in full force and effect until December 31, 2013 unless terminated earlier as provided herein.

 

III.                              Delivery and Sampling.

 

MLMO shall arrange for the delivery of macadamia nuts in containers suitable for transport as mutually agreed upon and deliver wet-in-shell (“WIS”) nuts to MFH’s processing plant located at Captain Cook, Hawaii. MLMO or its representative will provide MFH with a numbered delivery receipt for each load delivered. This delivery receipt number will be the basis for tracking and providing relevant processing data for each load.

 

Upon acceptance, the WIS will be weighed by MacFarms on their weigh bridge at the site and a copy of the weighbridge record showing the MLMO delivery receipt number will be signed by the Driver of the vehicle making the delivery and mailed to MLMO as soon as is practical.

 

Alternatively, MFH will accept a certified public weighbridge record of the weight and record this on the numbered delivery receipt as the official record of the weight of the delivery from MLMO.

 

After weighing, WIS deliveries will be unloaded into the receiving bin at the MacFarms dehusking station. The automatic sampler installed at the station that takes a continuous sample of the WIS as it is unloaded from the receival bin will be used to take four (4) samples from approximately each quarter of the load as it is unloaded. Each of the four continuous samples will then be mixed and two 5 gallon bucket sub samples will be collected from each of the samples and labeled with the MLMO delivery number, the continuous number 1, 2, 3, or 4 to represent the relevant quarter of the load, and the letter A or B to represent the two subsamples taken from each of the four continuous samples.

 

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In each case Subsample A will be used to provide one 250 gram sample for Extraneous Matter and Moisture Determinations and one 500 gram sample for Quality Analysis. The Extraneous Matter — Moisture samples and the Quality Samples will be delivered to the MacFarms laboratory for determination of MacFarms standard NIS analyses for extraneous matter, moisture content and kernel recovery data. The results of the four tests from each delivery number will be averaged and the average result will be accepted as the laboratory test results for that individual delivery. The procedures to be used in sampling for moisture, extraneous matter (spoilage), and salable kernel recovery and in calculating the net kernel weight owed to MLMO from the processing are set forth in Schedule A — Sampling and Testing Procedure., Page 8.

 

In each case the Subsamples labeled B will be retained as a ‘check’ samples in the event that there is a dispute over the results for Sample A. The ‘check’ sample will be kept until the processing of the load to which it applies is completed and until the resultant kernel is returned to and accepted by MLMO.

 

Following sampling, the NIS will be delivered direct into a drying silo after Hand sorting to remove extraneous matter that may be detrimental to the processing equipment such as rocks, sticks, etc. Further treatment of the WIS such as hand sorting of defective nuts and unhusked nuts or water sorting will not be undertaken unless MLMO specifically instructs MFH to undertake these treatments.

 

If additional treatments are required by MLMO then MFH will keep a record of the weight of any material extracted from the delivery and record this against the MLMO delivery number.

 

Multiple deliveries from MLMO may be placed together in a silo but the entire amount of any individual delivery must be in one silo so that processing data can be attributed to a delivery number or a group of delivery numbers. .

 

MLMO and MFH will agree that the net weight of WIS delivered and recorded against the individual delivery number will be the weight of WIS shown on the weigh bridge docket for the delivery less deduction of any extraneous material as defined in Schedule A and less any other material that is hand or water sorted out of the product by MFH on instructions from MLMO. MFH will record the net wet-in-shell weight of each delivery against the appropriate delivery number.

 

MFH will determine the moisture content and the salable kernel recovery of the macadamia nuts delivered to it by MLMO with as much accuracy as is reasonably practicable and as set out in Schedule A — Sampling and Testing Procedure., Page 8.

 

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IV.                               Processing of Macadamia Nuts.

 

A.                      General Overview.

 

MFH shall use industry acceptable methods to receive, weigh, sample, dry, crack, remove shell from WIS nuts and sort, inspect, roast and package macadamia kernels as agreed upon by both parties.  It is the intention of the parties that the quantities of specific Styles and products of macadamia kernel processed and made available in total under this Agreement shall be in the ratios and percentages as set forth in Schedule B — Kernel Recovery and Pack Out., Page 11.

 

During the packing process, MFH will collect a 250 gram kernel sample from approximately the beginning, and the end of packout of each pallet. The two samples will be mixed into a composite sample and the composite sample will be assessed for compliance with the in process physical parameters as outlined in Schedule C — Process Analysis., Page 12.

 

During the packing process, MFH will collect a 250 gram kernel sample from approximately the beginning, the middle, and the end of packout of each pallet. The three samples will be mixed into a composite sample and the composite sample divided into samples A and B and labeled with the applicable pallet number and date code. Sample A will be used for quality analysis and Sample B will be kept as a ‘check’ sample for 3 months after processing.

 

MFH will analyze Sample A for compliance with biological parameters as outlined in Laboratory Assessments in Schedule C — Process Analysis., Page 12.

 

V.                                    Processing Fee.

 

MLMO shall pay MFH a processing fee of $1.30 per kernel pound of nuts processed plus applicable Hawaii general excise tax for the first 300,000 pounds of kernel produced. MLMO shall pay MFH a processing fee of $1.20 per kernel pound of nuts processed plus applicable Hawaii general excise tax for any additional pounds of kernel produced above 300,000 pounds. Payment shall be due within 30 days of shipping of kernel from MFH’s processing plant. In the event that any payment hereunder is not made when it becomes due, the unpaid amount shall bear interest at 6.5% per annum.

 

VI.                               Accounting and Reports.

 

MFH shall keep full and accurate records and accounts showing, among other things, dates of delivery and weight of nuts (WIS by delivery number) from each delivery, and all other information that may be necessary or desirable in order to calculate and verify quantities of kernel processed, shipped and on hand and amounts owed under this Agreement. To the extent that information is provided to either party hereunder and is not otherwise in the public domain, both parties agree to keep such information confidential except as may be required by law or in connection with any litigation between MLMO and MFH. Each party agrees to return to the other party any copies of trade secrets or proprietary market information within a reasonable time after such information is provided.

 

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As soon as practicable after the end of each week, MFH will provide written or electronic reports to MLMO describing all deliveries, weights, quality analysis results and shipments under this Agreement during such week.

 

VII.                          Shipping.

 

MFH will load finished kernel into shipping containers at its processing facility and ship kernel to a location or locations as designated by MLMO.  Payment for shipping from MFH’s loading dock to designated destination will be the responsibility of MLMO.

 

MLMO shall retain ownership of its macadamia shell, FOB MFH factory, and will be responsible for pick-up and hauling costs.

 

VIII.                     Termination.

 

The parties may terminate this Agreement at any time by mutual agreement in writing. In addition, either party may terminate this agreement upon the sale of either MLMO or MFH.

 

In the event that any party shall be in default (as defined below), the non-defaulting party may terminate this Agreement at any time by delivering written notice of such termination to the defaulting party. Unless terminated earlier, this Agreement shall terminate at the close of business on December 31, 2013.

 

A party shall be in “default” under this Agreement in the event that

 

(i)                                     It files any voluntary proceeding for dissolution or under any federal or state bankruptcy, insolvency, receivership or similar law;

 

(ii)                                  Any such proceeding is commenced against it involuntarily and is not dismissed within 60 days;

 

(iii)                               It makes any composition with or assignment for the benefit of its creditors;

 

(iv)                              It enters into any corporate reorganization or acquisition without making adequate provision for the performance of its obligations under this Agreement;

 

(v)                                 It fails to perform any of its obligations when due under this Agreement and it fails to correct such non-performance within 30 days after written demand for performance is made by the other party.

 

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IX.                              Notice.

 

For convenience of operation hereunder, both MLMO and MFH shall designate one representative to serve as the channel of communication for delivering information to and securing necessary action by its principals. Any party may change its representative from time to time by delivering written notice of such change to the other party. Until further notice is given, each party’s representative shall be the person listed in the notice address below.

 

Any and all notices, demands, or other communications (collectively, “notice”) requiring or desired to be given hereunder by either party shall be in writing and shall be validly given or made to the other party or his authorized representative at the address set forth below, if served either personally or if deposited in the United States mails, certified or registered, postage prepaid, or if sent by fax.

 

MLMO: ML Macadamia Orchards, L.P.

26-238 Hawaii Belt Rd.

Hilo, Hawaii 96720

Attention: President

Fax number: 808-969-8052

 

MFH: Buderim Macadamias of Hawaii, LLC

89-406 Mamalahoa Highway

Captain Cook, Hawaii 96704

Attention: Operations Manager

Fax number: 808 328-8081

 

If such notice is delivered personally, service shall conclusively be deemed to have been made at the time of such delivery. If such notice is given by mail, service shall conclusively be deemed to have been made 72 hours after deposit thereof in the mail as provided for above. If such notice is given by fax, service shall conclusively be deemed to have been made 24 hours after the transmission thereof and receipt of the proper response code. Any party may change its address for the purpose of receiving notices as herein provided by a written notice given to the other party.

 

X.                                   Right to Inspect.

 

MFH, upon reasonable notice, shall allow MLMO to observe, inspect or audit processing and laboratory operations and MLMO shall be notified by MFH of any material deviations from established procedures during the processing of its production. MLMO shall not make any requests of MFH staff or give MFH staff any instructions during observance and inspection of MFH Processing or Laboratory operations.

 

XI.                              Force Majeure.

 

Neither of the parties hereto shall be liable or accountable to the other party for any delay in complying or any failure to comply with any of the terms, provisions or conditions of this Agreement in the event that such failure shall have been caused by an act of God, strike, lockout, public enemy, war, civil commotion, riot, condemnation, judicial or governmental order or other requirements of law which directly prohibit the

 

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performing by either party of the obligations hereunder (such as, but not limited to, governmental regulations concerning the hazards of marketing or consumption of macadamia nuts) or the refusal or failure of any governmental office or officer to grant any permit or order necessary for compliance herewith by either party hereto, nor shall either of the parties hereto be liable or accountable to the other party for any damages arising from any such delay or failure.

 

XII.                         Waiver.

 

The failure of either party to enforce its rights upon any default on the part of the other party shall not be construed as a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this Agreement be construed to waive or to lessen the right of either party to demand performance by the other party or exercise its rights in the event of default. No provision of or default under this Agreement may be waived except by a notice in writing signed by the party making the waiver. A waiver by either party of a particular default shall not be deemed to be a waiver of any other subsequent default.

 

XIII.                    Assignment.

 

Neither of the parties hereto may assign any of its rights or obligations under this Agreement without the prior written consent of the other party. No consent or approval required under this Agreement shall be unreasonably withheld and no charge for the giving of such consent or approval shall be made.

 

XIV.                     Entire Agreement.

 

This Agreement represents the entire agreement and understanding of the parties with respect to the subject matter hereof. The parties specifically acknowledge and agree that no joint venture or lease is created hereby and that neither party is hereby appointed as the agent of the other party.

 

XV.                          Governing Law.

 

This Agreement will primarily be performed in and shall be governed by and construed in accordance with the laws of the State of Hawaii.  Each of the parties consents to the jurisdiction of the courts of the State of Hawaii or any federal court sitting in Hawaii and agrees that Hawaii is an appropriate venue for any action that may be brought under this Agreement.

 

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XVI.                     Signatures.

 

IN WITNESS WHEREOF, MLMO and MFH have caused this Macadamia Nut Processing Agreement to be executed and delivered by their duly authorized representatives on this 11th day of July, 2012.

 

	
 
    	
ML MACADAMIA ORCHARDS, LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Dennis J. Simonis
    
	
 
    	
Its:   President.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BUDERIM MACADAMIAS OF HAWAII, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ John A. Wilke
    
	
 
    	
Its:   Operations Manager.
    

 

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Schedule A — Sampling and Testing Procedure.

 

A.                      Sampling.

 

WIS nuts for analysis shall be collected from a continuous sampler located on a discharge chute taking the nuts from the factory receival hopper. Four samples will be taken for each MLMO delivery number and represent the delivery number total weight (Gross Pounds Received, GPR) as recorded by the certified scale used to weigh each load of WIS nuts delivered to MFH

 

The Four separate samples taken from the continuous sampler will then be mixed and two 5 gallon bucket sub samples will be collected and labeled with the MLMO delivery number, the number 1, 2, 3, or 4 to represent the continuous sample number, and the letter A or B for each subsample.

 

Sample A will be used to provide a 250 gram sample for Moisture and Extraneous Matter Determination and a 500 gram sample for Quality Analysis. The moisture and Quality Samples will be delivered to the MacFarms laboratory for determination of MacFarms standard NIS analyses for moisture content and kernel recovery data. The results for the four tests from each delivery number will be averaged and the average result will be accepted as the laboratory test results for that individual delivery number.

 

Sample B will be retained as a ‘check’ sample in the event that there is a dispute over the results for Sample A. The ‘check’ sample will be kept until the processing of the load to which it applies is completed and until the resultant kernel is returned to and accepted by MLMO.

 

B.                      Sample Testing.

 

The WIS Moisture samples will be used for determining the amount of extraneous material (as defined below) and moisture content. The WIS Quality Analysis samples will be used for determining kernel quality, and kernel recovery for their representative deliveries.

 

1.                                 Moisture Sample.

 

a.                                      Determination of Extraneous Material.

 

Weigh the entire sample and record the weight as the Gross Sample Weight (“GSW”).  Remove all extraneous material.

 

Extraneous Material is defined as

 

·                  Foreign Material

·                  Trash

·                  Husk (loose pieces)

·                  Husks from un-husked nuts

·                  Empty nuts

 

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·                  Rat damaged

·                  Sticks

·                  Rocks

·                  Germinated nuts

·                  Pee Wee nuts, < 5/8 inch in diameter

 

The ratio of weight of the Extraneous Material to the Gross Sample Weight (“GSW”) will be applied to the “GPR” to determine the Gross Weight WIS (“GW) delivered (after extraneous material).

 

b.                                      Determination of Moisture.

 

After removal of the Extraneous Material weigh and record the weight of the moisture sample. The moisture sample will then be dried in a convection oven at 105 degrees Celsius (220 degrees Fahrenheit) for 24 hours.  After drying the dried sample will be weighed and the weight recorded. The percentage moisture “M” will be determined by dividing the difference in weight prior to and after drying by the weight prior to drying.

 

2.                                 Quality Analysis Sample.

 

The Quality Analysis Sample be weighed and then dried to a kernel moisture content of 1.5% at a temperature of approximately 38 degrees Celsius (100 degrees Fahrenheit) for 7 days using the standard MFH drying procedure and after review and approval of that procedure by MLMO.

 

After drying, crack the Quality Analysis sample and separate the shells from the kernels.  Determine the weight of the recovered raw kernel.

 

Roast all recovered kernels from the sample using standard MFH procedure and after review and approval of that procedure by MLMO. Using the Hawaii Department of Agricultural “Standards for roasted macadamia nuts” separate the saleable kernel from the unsalable kernel. Weigh the saleable kernel and record the weight.

 

Separate the unsalable kernel into the following categories and weigh each category and record the weight.

 

a.         Stink bug damage (>2 spots)

b.         Other insect damage

c.          Koa Seed worm

d.         Tropical nut borer

e.          Mold

f.           Germinated

g.         Immature/Shrivel

h.         Discoloured

i.            Bacterial damage

 

Total (a) through (i) and record the weight as un-saleable kernel.

 

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Each category for un-saleable kernel will be reported by weight and by % of total weight of recovered raw kernel.

 

Weigh remaining Saleable kernel from sub sample A and record as Saleable Kernel (“SK”).

 

Determine Kernel recovery (“KR”) where:-

 

KR= SK/X

 

3.                                 QA Data:

 

The QA data will be provided by MFH for each delivery which will include the Gross Pounds received, Moisture content (from moisture sample), % Extraneous material (from sample), % un-saleable kernel (from sample), % un-saleable kernel by category (from sample) and Kernel Recovery “KR” (SK/DIS).

 

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Schedule B — Kernel Recovery and Pack Out.

 

A.                      Kernel Recovered.

 

Kernel recovery percent (SKR) will be established as outlined in Schedule A. The minimum kernel recovered and hence net kernel weight available to MLMO will be determined by multiplying the kernel recovery percentage, less a 1% factory loss factor, by the net weight of dry nut in shell (DIS) available for cracking. The net weight of DIS available for cracking will be deemed to be the weight of WIS delivered and recorded against the individual delivery number less the extraneous material as defined in Schedule A and adjusted to dry in shell (DIS) moisture using the WIS moisture content as determined in Schedule A and summarized below.

 

Weight of DIS = WIS x (100% - WIS % Moisture) / (100% - 3%)

 

B.                      Kernel Recovery and Pack Out.

 

MFH can pack off the following industry standard Styles of Product according to the MFH Specification Sheet that is available for each Style. Mixtures of the styles may be possible after consultation and agreement by MFH Factory Manager.

 

Style I (30’s)

Style I (40’s)

Style 1 (Whole Kernel of Mixed Sizes)

Style II (Wholes and Halves at defined percentages of each)

Style 4L (Large Halves)

Style IV Regular (Small Halves and Pieces)

Style VI (Small Pieces.)

Confectionery Grade (edible Kernels with slight physical defects)

 

C.                      Packaging:

 

MFH will supply 25 lb boxes and foil liners. MFH will label the packed product with labels supplied for the purpose by MLMO.

 

**********

 

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Schedule C — Process Analysis.

 

A.                      In Process Physical Assessments.

 

	
Characteristic:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Sample   Size
    	
 
    	
500   grams
    
	
 
    	
 
    	
 
    
	
Style
    	
 
    	
Compliance   with Style Sizing.
    
	
 
    	
 
    	
 
    
	
Foreign   Material
    	
 
    	
Less   than 0.02%
    
	
 
    	
 
    	
 
    
	
Reject   Kernel
    	
 
    	
0%
    
	
 
    	
 
    	
 
    
	
Total   Serious Defects
    	
 
    	
1.0%   Maximum
    
	
 
    	
 
    	
 
    
	
Moisture
    	
 
    	
1.5%   Maximum
    
	
 
    	
 
    	
 
    
	
Color
    	
 
    	
Uniform,   typical roasted &
    
	
 
    	
 
    	
free   of dark pieces
    
	
 
    	
 
    	
 
    
	
Flavor
    	
 
    	
Clean,   fresh, macadamia flavor.
    
	
 
    	
 
    	
 
    
	
Roasted   Defects
    	
 
    	
Less   than 5% dark brown colors. (Exception: This does not include the dark basal   cap which is genetic).
    

 

B.                      Laboratory Assessments.

 

	
Std   Plate Count
    	
 
    	
Less   than 10,000 per gram
    
	
 
    	
 
    	
 
    
	
Yeast   and Mold
    	
 
    	
Less   than 100 per gram
    
	
 
    	
 
    	
 
    
	
Coliforms
    	
 
    	
Less   than 100 per gram
    
	
 
    	
 
    	
 
    
	
E.   coli
    	
 
    	
Negative
    
	
 
    	
 
    	
 
    
	
Salmonella
    	
 
    	
Negative
    
	
 
    	
 
    	
 
    
	
Aflatoxin
    	
 
    	
20   ppb Maximum
    
	
 
    	
 
    	
 
    
	
Peroxide   Value
    	
 
    	
5.0   meq/kg Maximum
    
	
 
    	
 
    	
 
    
	
Free   Fatty Acid, as oleic
    	
 
    	
1.5%   maximum
    

 

Compliance with the above criteria indicates that the Product complies with the U.S. Federal Food, Drug and Cosmetic Act as amended.

 

********

 

12exhibit4-1.htm

Exhibit 4.1

Combined, Amended and Restated Senior Secured Redeemable Debenture

 

Original Issue Date effective as of:  June 1, 2012

 

 

Maturity Date: June 1, 2013

 

Amount: $770,833.33

This Combined, Amended and Restated Senior Secured Redeemable Debenture (the “Debenture”) is issued effective as of June 1, 2012 (the “Closing Date”) by Dynamics Ventures Corp., a Delaware corporation (the “Company”), to TCA Global Credit Master Fund LP, a Cayman Islands limited partnership (together with its permitted successors and assigns, the “Holder”) pursuant to exemptions from registration under the Securities Act of 1933, as amended.

 

 

ARTICLE I.

 

Section 1.01 Principal and Interest.  For value received, the Company hereby promises to pay to the order of the Holder, by no later than June 1, 2013 (the “Maturity Date”), in immediately available and lawful money of the United States of America, Seven Hundred Seventy Thousand Eight Hundred Thirty-Three and 33/100 Dollars ($770,833.33), together with interest on the outstanding principal amount under this Debenture, at the rate of twelve percent (12%) per annum simple interest (the “Interest Rate”) from the date of the original issue of this Debenture, until paid, as more specifically provided below.

 

Section 1.02 Optional Redemption in Full.  The Company, at its option, shall have the right to redeem this Debenture in full and for cash, at any time prior to the Maturity Date, with three (3) business days advance written notice (the “Redemption Notice”) to the Holder. The amount required to redeem this Debenture in full pursuant to this Section 1.02 shall be equal to: (i) the aggregate principal amount then outstanding under this Debenture; plus (ii) all accrued and unpaid interest due under this Debenture as of the redemption date; plus (iii) all other costs, fees and charges due and payable hereunder or under any other “Transaction Documents” (as hereinafter defined); plus (iv) a redemption premium equal to the then outstanding principal amount due under this Debenture multiplied by eight percent (8%) (collectively, the “Redemption Amount”).  The Company shall deliver the Redemption Amount to the Holder on the third (3rd) business day after the date of the Redemption Notice.

 

Section 1.03   Mandatory Redemption at Maturity.  On the Maturity Date, the Company shall redeem this Debenture for the Redemption Amount, which Redemption Amount shall be due and payable to the Holder by no later than 2:00 P.M., EST, on the Maturity Date.

 

Section 1.04 Payments.

 

(1) Monthly Payments.  The Company shall make monthly payments of principal, interest and the corresponding amount of redemption premium to the Holder, as applicable, commencing on the first (1st) day of July, 2012, and on the first (1st) day of each consecutive calendar month thereafter while this Debenture is outstanding, until the Maturity Date, based on the payment, amortization and redemption premium schedule attached hereto as Exhibit “A”.

 

 

  

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(2) Interest Calculations; Payment Application. Interest shall be calculated on the basis of a 360-day year, and shall accrue daily on the outstanding principal amount outstanding from time to time for the actual number of days elapsed, commencing on the Closing Date until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder or under any Transaction Documents, has been made.  Unless otherwise expressly provided elsewhere in this Debenture, all payments made under this Debenture shall include a redemption premium equal to eight percent (8%) of the amount of principal paid with such payment.  All payments received and actually collected by Holder hereunder shall be applied first to any costs and expenses due or incurred hereunder or under any other Transaction Documents, second to the redemption premium due on such payment in accordance with this Debenture, third to accrued and unpaid interest hereunder, and last to reduce the outstanding principal balance of this Debenture.

 

(3) Late Fee. If all or any portion of the payments of principal, interest or other charges due hereunder are not received by the Holder within five (5) days of the date such payment is due, then the Company shall pay to the Holder a late charge (in addition to any other remedies that Holder may have) equal to five percent (5%) of each such unpaid payment or sum.  Any payments returned to Holder for any reason must be covered by wire transfer of immediately available funds to an account designated by Holder, plus a $100.00 administrative fee charge.  Holder shall have no responsibility or liability for payments purportedly made hereunder but not actually received by Holder; and the Company shall not be discharged from the obligation to make such payments due to loss of same in the mails or due to any other excuse or justification ultimately involving facts where such payments were not actually received by Holder.

 

Section 1.05 Manner of Payments. All sums payable to the order of Holder hereunder shall be payable by wire transfer of lawful dollars of the United States of America to the wire instructions set forth below, or at such place as Holder, from time to time, may designate in writing.  Wire Instructions for all sums due and payable hereunder are as follows:

 

TCA Global Credit Master Fund, LP (US Dollars)

 

Correspondent Bank:

Bank of New York

1 Wall Street

New York, New York 10286

ABA# 021-0000-18

SWIFT: IRVTUS3N

Beneficiary Bank:

Caledonian Bank Limited

A/C Number: 89-000-50977

SWIFT: CBTLKYKY

For Final Credit:

Account Name: Caledonian Fund Services (Cayman) Limited – Client Bank Account

Account Number: 0201420308681001

Beneficiary Reference: TCA Global Credit Master Fund, LP A/C # 0201420310849001

 

 

  

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ARTICLE II.

 

Section 2.01 Amended and Restated Debenture.  This Debenture combines, amends, restates, replaces and supersedes, in their entirety, that certain Senior Secured Redeemable Debenture issued as of July 31, 2011 from the Company to Holder, in the original principal amount of $500,000.00 (the “First Debenture”), and that certain Senior Secured Redeemable Debenture issued as of April 30, 2012 from the Company to Holder, in the original principal amount of $750,000.00 (the “Second Debenture”).  It is the intention of the Company and Holder that while this Debenture combines, amends, restates, replaces and supersedes the First debenture and the Second Debenture, in their entirety, it is not in payment or satisfaction of the First Debenture or the second Debenture, but rather is the substitute of one evidence of debt for another without any intent to extinguish the old.  Should there be any conflict between any of the terms of the First debenture and Second Debenture, and the terms of this Debenture, the terms of this Debenture shall control.  This Debenture is not a novation.

 

Section 2.02 Secured Nature of Debenture.  This Debenture is being issued in connection with a Securities Purchase Agreement dated as of July 31, 2011, as amended by First Amendment to Securities Purchase Agreement dated as of April 30, 2012, as further amended by Second Amendment to Securities Purchase Agreement dated effective as of June 1, 2012 by and between the Company and the Holder (collectively, the “SPA”).  The indebtedness evidenced by this Debenture is also secured by all of the assets and property of the Company pursuant to that certain Security Agreement by and between the Company and Holder made as of July 31, 2011 (the “Security Agreement”), by a guaranty executed by Bundled Builder Solutions, Inc. (“BBSI”), a wholly-owned subsidiary of the Company (the “Guaranty”), by all of the assets and property of BBSI pursuant to that certain Security Agreement by and between BBSI and Holder made as of July 31, 2011 (the “BBSI Security Agreement”), and UCC financing statements filed against the Company and BBSI in the State of Delaware (the “UCC’s”). The SPA, as amended, this Debenture, the First Debenture, the Second Debenture, the Security Agreement, the Guaranty, the BBSI Security Agreement, the UCC’s, and all other documents and instruments heretofore or hereafter executed or filed in connection with the SPA or the indebtedness evidenced by this Debenture, and all modifications, extensions, future advances, and renewals thereof, and any substitutions therefor, being herein collectively referred as the “Transaction Documents.” All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Transaction Documents which are to be kept and performed by the Company are hereby made a part of this Debenture to the same extent and with the same force and effect as if they were fully set forth herein, and the Company covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

 

 

ARTICLE III.

 

Section 3.01 Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default” hereunder: (i) the Company shall fail to pay any installment of interest, principal or other charges due under this Debenture when any such payment shall be due and payable; (ii) the Company makes an assignment for the benefit of creditors; (iii) any order or decree is rendered by a court which appoints or requires the appointment of a receiver, liquidator or trustee for the Company, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (iv) any order or decree is rendered by a court adjudicating the Company insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (v) the Company files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (vi) the Company admits, in writing, its inability to pay its debts as they become due; (vii) a proceeding or petition in bankruptcy is filed against the Company and such proceeding or petition is not dismissed within thirty (30) days from the date it is filed; (viii) the Company files a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States or any other foreign country or state; or (ix) the Company shall fail to perform, comply with or abide by any of the material stipulations, agreements, conditions and/or covenants contained in this Debenture or any of the other Transaction Documents on the part of the Company to be performed complied with or abided by. 

 

 

  

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Section 3.02 Remedies.  Upon the occurrence of an Event of Default, the interest on this Debenture shall immediately accrue at an Interest Rate equal to the maximum rate permitted by applicable law, and, in addition to all other rights or remedies the Holder may have, at law or in equity, the Holder may, in its sole discretion, accelerate full repayment of all principal amounts outstanding hereunder, together with accrued interest thereon, together with all attorneys’ fees, paralegals’ fees and costs and expenses incurred by the Holder in collecting or enforcing payment hereof (whether such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise), and together with all other sums due by the Company hereunder and under the Transaction Documents, all without any relief whatsoever from any valuation or appraisement laws, and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Holder at law, in equity, or under this Debenture or any of the other Transaction Documents.  In connection with the Holder’s rights hereunder upon an Event of Default, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it in equity or under applicable law.

 

 

ARTICLE IV.

 

Section 4.01 Ususry Savings Clause.  Notwithstanding any provision in this Debenture or the other Transaction Documents, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Debenture or any other applicable law.  In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Debenture, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal balance then outstanding.  It is the intention of the parties that the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this Debenture greater than the highest non-usurious rate of interest which may be charged under applicable law.

 

 

  

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ARTICLE V.

 

Section 5.01 No Exemption.  The Company hereby waives and releases all benefit that might accrue to the Company by virtue of any present or future laws exempting any property that may serve as security for this Debenture, or any other property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy, or sale under execution, exemption from civil process, or extension of time for payment; and the Company agrees that any property that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in part in any order or manner desired by Holder.

 

Section 5.02 Exercise of Remedies.  The remedies of the Holder as provided herein and in any of the other Transaction Documents shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

 

Section 5.03 Waivers.  The Company and all others who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest of this Debenture or any other Transaction Documents, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Debenture and the other Transaction Documents; (ii) expressly consent to all extensions of time, renewals or postponements of time of payment of this Debenture and any other Transaction Documents from time to time prior to or after the maturity of this Debenture without notice, consent or further consideration to any of the foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies against the Company or any other person or party to become liable hereunder or against any collateral that may secure this Debenture in order to enforce the payment of this Debenture; and (iv) expressly agree that, notwithstanding the occurrence of any of the foregoing (except the express written release by the Holder of any such person), the undersigned shall be and remain, directly and primarily liable for all sums due under this Debenture.

 

Section 5.04 No Waiver.  Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Holder, and then only to the extent specifically set forth in the writing.  A waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.

 

 

  

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ARTICLE VI.

 

Section 6.01 Notice.  Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Debenture must be in writing and in each case properly addressed to the party to receive the same in accordance with the information below, and will be deemed to have been delivered: (i) if mailed by certified mail, return receipt requested, postage prepaid and properly addressed to the address below, then three (3) business days after deposit of same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by Federal Express, UPS or other nationally recognized overnight courier service, next business morning delivery, then one (1) business day after deposit of same in a regularly maintained receptacle of such overnight courier; or (iii) if hand delivered, then upon hand delivery thereof to the address indicated on or prior to 5:00 p.m., EST, on a business day.  Any notice hand delivered after 5:00 p.m., EST, shall be deemed delivered on the following business day.  Notwithstanding the foregoing, notice, consents, waivers or other communications referred to in this Debenture may be sent by facsimile, e-mail, or other method of delivery, but shall be deemed to have been delivered only when the sending party has confirmed (by reply e-mail or some other form of written confirmation) that the notice has been received by the other party.  The addresses and facsimile numbers for such communications shall be as set forth below, unless such address or information is changed by a notice conforming to the requirements hereof.

 

If to the Company:                                           Dynamic Ventures Corp.

8776 E. Shea Blvd., Suite B3A-615

Scottsdale, AZ 85260

Attn: Mr. Paul Kalkbrenner, CEO

E-Mail: paul@bbsiaz.com

With a copy to:                                                  Leslie Marlow, Esq.

Garcin & Marlow, LLP

405 Lexington Ave., 26th Floor

New York, New York 10174

Telephone: (516) 496-2223

E-Mail: lmarlow@garcinmarlow.com

If to the Holder:                                                TCA Global Credit Master Fund, LP

1404 Rodman Street

Hollywood, FL 33020

Attn: Mr. Robert Press

Telephone: (786) 323-1650

Facsimile: (786) 323-1651

E-Mail: bpress@trafcap.com

With a copy to:                                                 David Kahan, P.A.

6420 Congress Ave., Suite 1800

Boca Raton, FL 33487

Attn: David Kahan, Esq.

Telephone: (561) 672-8330

Facsimile: (561) 672-8301

E-Mail: david@dkpalaw.com

 

 

  

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Section 6.02 Governing Law.  This Debenture shall be deemed to be made under and shall be construed in accordance with the laws of the State of Florida without giving effect to the principals of conflict of laws thereof.  Each of the parties consents to the jurisdiction of the U.S. District Court sitting in the Southern District of the State of Florida or the state courts of the State of Florida sitting in Broward County, Florida in connection with any dispute arising under this Debenture and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens to the bringing of any such proceeding in such jurisdictions, provided, however, nothing contained herein shall limit the Holder’s ability to bring suit or enforce this Debenture or any other Transaction Documents in any other jurisdiction.

 

Section 6.03 Severability.  In the event any one or more of the provisions of this Debenture shall for any reason be held to be invalid, illegal, or unenforceable, in whole or in part, in any respect, or in the event that any one or more of the provisions of this Debenture operates or would prospectively operate to invalidate this Debenture, then and in any of those events, only such provision or provisions shall be deemed null and void and shall not affect any other provision of this Debenture.  The remaining provisions of this Debenture shall remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.

 

Section 6.04 Entire Agreement and Amendments.  This Debenture, together with the other Transaction Documents, represents the entire agreement between the parties hereto with respect to the subject matter hereof and thereof, and there are no representations, warranties or commitments, except as set forth herein and therein.  This Debenture may be amended only by an instrument in writing executed by the parties hereto.

 

Section 6.05 Binding Effect.  This Debenture shall be binding upon the Company and the successors and assigns of the Company and shall inure to the benefit of the Holder and the successors and assigns of the Holder.

 

Section 6.06 Assignment.  The Holder may from time to time sell or assign, in whole or in part, or grant participations in, this Debenture and/or the obligations evidenced hereby without the consent of the Company.  The holder of any such sale, assignment or participation, if the applicable agreement between Holder and such holder so provides, shall be: (i) entitled to all of the rights, obligations and benefits of Holder (to the extent of such holder’s interest or participation); and (ii) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to the Company (to the extent of such holder’s interest or participation), in each case as fully as though the Company was directly indebted to such holder.  Holder may in its discretion give notice to the Company of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Holder’s or such holder’s rights hereunder.

 

Section 6.07 Lost or Mutilated Debenture.  If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company.

 

 

  

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Section 6.08 Waiver of Jury Trail.  THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS DEBENTURE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS DEBENTURE OR ANY OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE COMPANY AGREES AND CONSENTS TO THE GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS DEBENTURE FROM THE COMPANY.  THE COMPANY’S REASONABLE RELIANCE UPON SUCH INDUCEMENT IS HEREBY ACKNOWLEDGED.

 

Section 6.09 Non-U.S. Status.  THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE.  IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS.  THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES.  ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.  BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANTS THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(B)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITES STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).

 

[Signatures on the following page]

 

 

  

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IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as executed this Debenture as of the date first written above.

 

	  	
DYNAMIC VENTURES CORP.

	  	  
	  	
By:/s/ Paul Kalkbrenner

	  	
Name: Paul Kalkbrenner_______________________________

	  	
Title:CEO________________________________

 

Signature page – Debenture

 

  

Page - 9

  

 

Exhibit “A”

	
Payment Date

	
Payment No.

	
Interest Payment

	
Prin. Payment

	
Redemption prem. %

	
Prem. Payable

	
Total Payable

	
Balance Outstanding

	  	  	  	  	  	  	  	
$770,833.33

	
7/1/2012

	
1

	
$7,708.33

	
0.00

	
8%

	
0.00

	
$7,708.33

	
$770,833.33

	
8/1/12

	
2

	
$7,708.33

	
0.00

	
8%

	
0.00

	
$7,708.33

	
$770,833.33

	
9/1/12

	
3

	
$7,708.33

	
$73,677.85

	
8%

	
$6,166.67

	
$87,552.85

	
$697,155.48

	
10/1/12

	
4

	
$6,971.55

	
$74,414.63

	
8%

	
$6,166.67

	
$87,552.85

	
$622,740.85

	
11/1/12

	
5

	
$6,227.41

	
$75,158.78

	
8%

	
$6,166.67

	
$87,552.85

	
$547,582.08

	
12/1/12

	
6

	
$5,475.82

	
$75,910.36

	
8%

	
$6,166.67

	
$87,552.85

	
$471,671.71

	
1/1/13

	
7

	
$4,716.72

	
$76,669.47

	
8%

	
$6,166.67

	
$87,552.85

	
$395,002.25

	
2/1/13

	
8

	
$3,950.02

	
$77,436.16

	
8%

	
$6,166.67

	
$87,552.85

	
$317,566.09

	
3/1/13

	
9

	
$3,175.66

	
$78,210.52

	
8%

	
$6,166.67

	
$87,552.85

	
$239,355.56

	
4/1/13

	
10

	
$2,393.56

	
$78,992.63

	
8%

	
$6,166.67

	
$87,552.85

	
$160,362.93

	
5/1/13

	
11

	
$1,603.63

	
$79,782.55

	
8%

	
$6,166.67

	
$87,552.85

	
$  80,580.38

	
6/1/13

	
12

	
$805.80

	
$80,580.38

	
8%

	
$6,166.67

	
$87,552.85

	
-

 

 

 

  

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