Document:

ex10-4.htm

Exhibit 10.4

 

SECURITY AGREEMENT

 

SECURITY AGREEMENT, dated April 8, 2010, made by INTERNET MEDIA SERVICES, INC. (the “Borrower”), in favor of RAYMOND MEYERS (“Lender”).

 

W I T N E S S E T H:

 

WHEREAS, the Lender and the Borrower are parties to a Credit Agreement, dated as of the date hereof (such agreement, as amended, restated or otherwise modified from time to time, being hereinafter referred to as the “Credit Agreement”);

 

WHEREAS, pursuant to the Credit Agreement, the Lender has agreed to make certain term loans (each a “Loan” and collectively, the “Loans”) to the Borrower in an aggregate principal amount at any one time outstanding not to exceed the Maximum Revolving Commitment (as defined in the Credit Agreement); 

 

WHEREAS, it is a condition precedent to the Lender making any Loan to the Borrower pursuant to the Credit Agreement, that the Borrower shall have executed and delivered to the Lender a security agreement providing for the grant to Lender of a security interest in all of the accounts receivable of the Company;

 

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Lender to make and maintain the Loans pursuant to the Credit Agreement, the Company hereby jointly and severally agrees with the Lender as follows:

 

SECTION 1.   Definitions .

 

(a)           Reference is hereby made to the Credit Agreement for a statement of the terms thereof.  All terms used in this Agreement and the recitals hereto which are defined in the Credit Agreement or in Article 9 of the Uniform Commercial Code (the “Code”) as in effect from time to time in the State of New York and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute except as Lender may otherwise determine.

 

(b)           As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:

 

  

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SECTION 2.   Grant of Security Interest .  As collateral security for all of the Obligations (as defined in Section 3 hereof), the Company hereby pledges and assigns to the Lender, and grants to the Lender, a continuing security interest in all of the assets of the Company, whether now outstanding or as of a future date (the “Collateral”).

 

SECTION 3.   Security for Obligations .  The security interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations, whether now existing or hereafter incurred (the “Obligations”):

 

(a)           the prompt payment by the Company, as and when due and payable (by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Credit Agreement and the other Loan Documents, including, without limitation, (i) principal of and interest on the Loans (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding of the Company, whether or not the payment of such interest is unenforceable or is not allowable due to the existence of such Insolvency Proceeding), and (ii) all fees, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any Loan Document; and

 

(b)           the due performance and observance by the Company of all of its other obligations from time to time existing in respect of the Loan Documents.

 

SECTION 4.   Representations and Warranties .  The Company represents and warrants as follows:

 

(a)           The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the state or jurisdiction of its organization, (ii) has all requisite power and authority to execute, deliver and perform this Agreement and each other Loan Document to be executed and delivered by it pursuant hereto and to consummate the transactions contemplated hereby and thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

 

(b)           The execution, delivery and performance by the Company of this Agreement and each other Loan Document to which the Company is a party or will be a party (i) have been duly authorized by all necessary action, (ii) do not and will not contravene its charter or by-laws, or any applicable law or any contractual restriction binding on or otherwise materially affecting the Company, (iii) do not and will not result in or require the creation of any Lien upon or with respect to any of its properties and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to it or its operations or any of its properties.

 

  

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(c)           This Agreement is, and each other Loan Document to which the Company is or will be a party, when executed and delivered pursuant hereto, will be, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws.

 

(d)           The Company is and will be at all times the sole and exclusive owners of, or otherwise have and will have adequate rights in, the Collateral free and clear of any Lien except for (i) the Lien created by this Agreement and (ii) the Permitted Liens.  No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except (A) such as may have been filed in favor of Lender relating to this Agreement and (B) such as may have been filed to perfect or protect any security interests or Liens permitted by the Credit Agreement.

 

(e)           This Agreement creates in favor of Lender a legal, valid and enforceable security interest in the Collateral, as security for the Obligations.

 

SECTION 5.   Covenants as to the Collateral .  So long as any of the Obligations shall remain outstanding and the Credit Agreement and the other Loan Documents shall not have expired or terminated, unless Lender shall otherwise consent in writing:

 

(a)           Further Assurances.  The Company will at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that may be necessary or desirable or that Lender may request in order to (i) perfect and protect the security interest purported to be created hereby; (ii) enable Lender to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise effect the purposes of this Agreement.

 

(b)           Transfers and Other Liens.

 

(i)           Except to the extent expressly permitted by the Credit Agreement, the Company will not sell or otherwise transfer (by operation of law or otherwise) any of the Collateral.

 

(ii)           Except to the extent expressly permitted by the Credit Agreement, the Company will not create, suffer to exist or grant any Lien upon or with respect to any Collateral.

 

SECTION 6.   Additional Provisions Concerning the Collateral .

 

(a)           The Company hereby (i) authorizes Lender to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral and (ii) ratifies such authorization to the extent that Lender has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof.  A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

 

(b)           The Company hereby irrevocably appoints Lender as its attorney-in-fact and proxy, with full authority in the place and stead of the Company and in the name of the Company or otherwise, from time to time in Lender’s discretion, to take any action and to execute any instrument which Lender may deem necessary or advisable to accomplish the purposes of this Agreement (subject to the rights of the Company under Section 5 hereof), including, without limitation, to execute assignments, licenses and other documents to enforce the rights of Lender and the Lender with respect to any Collateral.  This power is coupled with an interest and is irrevocable until all of the Obligations are indefeasibly paid in full after the termination of the Credit Agreement and the other Loan Documents.

  

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(c)           The powers conferred on Lender hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers.  Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Lender shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral.

 

SECTION 7.   Remedies Upon Default .  If any Event of Default shall have occurred and be continuing:

 

(a)           Lender may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into Lender’s name or into the name of its nominee or nominees (to the extent Lender has not theretofore done so) and thereafter receive, for the benefit of Lender, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Lender’s offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as Lender may deem commercially reasonable.  All Cash Proceeds received by Lender in respect of any sale of or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of Lender, be held by Lender as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to Lender pursuant to Section 8 hereof) in whole or in part by Lender against, all or any part of the Obligations in such order as Lender shall elect, consistent with the provisions of the Credit Agreement and the Intercreditor Agreements.  Any surplus of such cash or Cash Proceeds held by Lender and remaining after the indefeasible payment in full of all of the Obligations after the termination of the Credit Agreement and the other Loan Documents shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.

 

(b)           In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which Lender is legally entitled, the Company shall be liable for the deficiency, together with interest thereon at the highest rate specified in any applicable Loan Document for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other client charges of any attorneys employed by Lender to collect such deficiency.

 

(c)           The Company hereby acknowledges that if Lender complies with any applicable state or federal law requirements in connection with a disposition of the Collateral, such compliance will not adversely effect the commercial reasonableness of any sale or other disposition of the Collateral.

 

  

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SECTION 8.  Indemnity and Expenses .

 

(a)           The Company agrees to defend, protect, indemnify and hold Lender harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including, without limitation, reasonable legal fees, costs, expenses, and disbursements of Lender’s counsel) to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities resulting solely and directly from Lender’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction.

 

(b)           The Company will upon demand pay to Lender the amount of any and all costs and expenses, including the reasonable fees, costs, expenses and disbursements of counsel for Lender and of any experts of Lender (including, without limitation, any collateral trustee which may act as agent of Lender), which Lender may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of Lender hereunder, or (iv) the failure by the Company to perform or observe any of the provisions hereof.

 

SECTION 9.  Notices, Etc.   All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt requested), telecopied or delivered, if to the Company or to Lender, to it at its address specified in the Credit Agreement; or as to any such Person, at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 9.  All such notices and other communications shall be effective (i) if mailed (by certified mail, postage prepaid and return receipt requested), when received or three (3) Business Days after deposited in the mails, whichever occurs first, (ii) if telecopied, when transmitted and confirmation is received, provided same is on a Business Day and, if not, on the next Business Day; or (iii) if delivered, upon delivery, provided same is on a Business Day and, if not, on the next Business Day.

 

SECTION 10.  Miscellaneous .

 

(a)           No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by the Company and Lender, and no waiver of any provision of this Agreement, and no consent to any departure by the Company therefrom, shall be effective unless it is in writing and signed by Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(b)           No failure on the part of Lender to exercise, and no delay in exercising, any right hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies of Lender in the other Loan Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.  The rights of Lender against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights under any other Loan Document against such party or against any other Person, including but not limited to, the Company.

  

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(c)           Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

 

(d)           This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the later of (A) the indefeasible payment in full of the Obligations and (B) the termination of the Credit Agreement and the other Loan Documents and (ii) be binding on the Company and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of Lender and the Lender hereunder, to the benefit of Lender and the Lender and their respective permitted successors, transferees and assigns.  Without limiting the generality of clause (ii) of the immediately preceding sentence, without notice to the Company, Lender may assign or otherwise transfer their rights and obligations under this Agreement and any other Loan Document, to any other Person and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to Lender and the Lender herein or otherwise.  Upon any such assignment or transfer, all references in this Agreement to Lender shall mean the assignee of Lender.  None of the rights or obligations of the Company hereunder may be assigned or otherwise transferred without the prior written consent of Lender, and any such assignment or transfer shall be null and void.

 

(e)           Upon the satisfaction in full of the Obligations and the termination of the Credit Agreement and the other Loan Documents, (i) this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall revert to the Company and (ii) Lender will, upon the Company’s request and at the Company’s expense, (A) return to the Company such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver to the Company such documents as the Company shall reasonably request to evidence such termination, all without any representation, warranty or recourse whatsoever.

 

(f)           THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.

 

(g)           ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA IN THE COUNTY OF LOS ANGELES, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

  

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(h)           THE COMPANY AND (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) LENDER WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO.

 

(i)            The Company irrevocably consents to the service of process of any of the aforesaid courts in any such action, suit or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Company at its address provided herein, such service to become effective 10 days after such mailing.

 

(j)            Nothing contained herein shall affect the right of Lender to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against the Company or any property of the Company in any other jurisdiction.

 

(k)           The Company irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

 

(l)            Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

(m)          This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one in the same Agreement.

 

(n)           All of the obligations of the Company hereunder are joint and several.  Lender may, in its sole and absolute discretion, enforce the provisions hereof against any of the Company and shall not be required to proceed against the Company or seek payment from the Company.  In addition, Lender may, in its sole and absolute discretion, select the Collateral of any one or more of the Company for sale or application to the Obligations, without regard to the ownership of such Collateral, and shall not be required to make such selection ratably from the Collateral owned by all of the Company.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written.

 

	  	
INTERNET MEDIA SERVICES, INC

	  	  
	  	
By: /s/ Michael Buechler

	  	
Name: Michael Buechler

	  	
Title:  Executive Vice President and Secretary

 

 

 

 

 

 

 

 

 

 

 

  

-8-ex10-5.htm

Exhibit 10.5

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE LAW, AND MAY NOT BE SOLD, OFFERED FOR SALE, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE, OR FOREIGN SECURITIES LAWS COVERING ANY SUCH TRANSACTION OR (B) SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

 

SECURED PROMISSORY NOTE

$64,744 April 8, 2010

Santa Monica, CA

 

FOR VALUE RECEIVED, INTERNET MEDIA SERVICES INC. (the “Borrower”), promises to pay to RAYMOND MEYERS (the “Lender”), or to its order, the principal sum of Sixty-Four Thousand, Seven-Hundred, and Forty-Four U.S. DOLLARS ($64,744) (the “Principal Amount”), together with interest in arrears on the unpaid principal balance from time to time outstanding from the date hereof until the entire principal amount due hereunder is paid in full at the rate(s) provided below.

 

This Secured Promissory Note (this “Note”) is one of a series of Secured Promissory Notes in the aggregate principal of up to $200,000 containing substantially identical terms and conditions (the “Notes”) issued by the Borrower to the Lender on behalf of the Lenders.  The Notes are pari passu such that all Notes are ranked equally, and no payments shall be made by the Borrower under any of the Notes unless a pro rata payment is simultaneously made under all other Notes.  Terms not defined herein shall have the meaning ascribed to them in that certain Credit Agreement, dated April 8, 2010, between the Lender and the Borrower.

 

Subject to applicable law, the Notes will be senior in all respects (including the right of payment) to all other indebtedness of the Borrower now existing or hereafter incurred.

 

1.          Maturity.  The aggregate Principal Amount, together with all accrued interest thereon and expenses incurred by the Lender in connection herewith (cumulatively, the “Outstanding Amount”), shall be due and payable in full on the earliest to occur of (the earliest of such events, the “Maturity Date”): (i) April 8, 2011 (the “Scheduled Maturity Date”) and (ii) the acceleration of this Note upon the occurrence of an Event of Default.  Unless payment is made following a demand therefor by the Lender, the Borrower shall provide the Lender with not less than five (5) business days’ prior written notice of its intent to repay the amounts outstanding hereunder.

 

2.           Interest.  This Note shall bear interest at a rate of six percent (6%) in excess of the then in effect one-year LIBOR rate per annum.  Interest shall be calculated on the basis of a year of 360 days for the actual number of days elapsed.  All accrued interest on this Note shall be due and payable on the first day of each calendar quarter commencing with the first calendar quarter following the disbursement of any Revolving Credit Loan.  From and after the occurrence of an Event of Default, the unpaid principal balance of this Note and, to the extent permitted by law, overdue interest shall bear interest at a rate per annum equal to four (4%) percent over the then applicable interest rate due under each Loan (the “Default Rate”).

 

  

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3.           Payment; Usury.  All payments by the Borrower under this Note shall be made in United States Dollars without deduction, set-off or counterclaim and shall be free and clear and without any deduction or withholding for any taxes or fees of any nature whatever, unless the obligation to make such deduction or withholding is required by law.  Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal.  Unless otherwise expressly provided in this Note, the Borrower, to the extent permitted by applicable law, waives presentment for payment, protest, and demand, and notice of protest, demand, and/or dishonor and nonpayment of this Note, notice of any Event of Default under this Note, and all other notices or demands otherwise required by law that the Borrower may lawfully waive.  All agreements between the Borrower and the Lender are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the Lender for the use, forbearance, or detention of the indebtedness evidenced hereby exceed the maximum permissible amount under applicable law.  If, from any circumstance whatsoever, fulfillment of any provision hereof at the time performance of such provision shall be due shall involve transcending the limit of validity prescribed by law, the obligation to be fulfilled shall automatically be reduced to the limit of such validity, and if from any circumstances the Lender should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance evidenced hereby and not to the payment of interest, and, if the principal amount of this Note has been paid in full, shall be refunded to the Borrower.

 

Immediately upon full repayment or conversion of the Outstanding Amount in accordance with the terms hereof, the Borrower shall be released from the repayment obligation or the conversion obligation set forth in this Note, the pledge and security interest shall be terminated, and the Lender shall execute releases of financing statements.

 

4.           Security Interest and Collateral.  This Note is secured by a first priority security interest on the Collateral pursuant to the terms of the Security Agreement, of even date hereof, made by the Borrower in favor of the Lender (the “Security Agreement”).

 

5.           Replacement of Note.  If this Note is mutilated, lost, stolen or destroyed, the Borrower shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Note, a new Note, but only upon receipt of evidence reasonably satisfactory to the Borrower of such loss, theft or destruction and customary and reasonable bond or indemnity, if requested.

 

6.           Miscellaneous.

 

(a)      Authority and Enforceability; Etc.  The Borrower hereby represents and warrants to the Lender that:

 

(i)  it has full power and authority and has taken or shall take all required corporate and other action necessary to permit it to execute, deliver, and perform all of its obligations contained in this Note, the Security Agreement, and any other documents or instruments delivered in connection herewith, and to borrow hereunder, and such actions to the best of its knowledge will not violate any provision of law applicable to, or the organizational documents of, the Borrower, or result in the breach of or constitute a default under any material agreement or instrument to which the Borrower is a party or by which it is bound, which default has not been waived in writing on or prior to the date hereof;

 

  

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(ii)  this Note has been duly authorized and validly executed by and is the valid and binding obligation of the Borrower enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other laws affecting creditors’ rights and remedies generally, and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law);

 

(iii)  neither the execution and delivery by the Borrower of this Note, nor the performance by the Borrower of its obligations hereunder, requires the consent, approval or authorization of any person or governmental authority, which consent, approval, or authorization has not been obtained; and

 

(b)       Notices.  All notices to any party required or permitted hereunder shall be in writing and shall be sent to the address or facsimile number set forth for such party as follows:

 

	
(i)

	
If to the Lender:

	  	  
	  	
Raymond Meyers

	  	
1434 6th Street, Unit 9

	  	
Santa Monica, CA 90401

	
(ii)

	
If to Company:

	  	  
	  	
Internet Media Services, Inc.

	  	
1434 6th Street, Unit 9

	  	
Santa Monica, CA 90401

Any such notice shall be deemed effectively given (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (iii) three days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one day after deposit with a recognized national overnight courier, specifying next day delivery, or two days after deposit with a recognized international overnight courier, specifying two day delivery, in each case with written verification of receipt.

(c)      Waiver.  No failure to exercise, and no delay in exercising, on the part of the Lender, any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.  The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

 

  

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(d)      Amendments.  Any term, covenant, or condition of this Note may be amended or waived only by written consent of the Borrower and the Lender.

 

(e)      Expenses.  Any reasonable expense incurred by the Lender (including, without limitation, reasonable attorneys’ fees and disbursements) in connection with the administration, or enforcement of this Note and any other document executed by the Borrower in connection with the obligations of Borrower hereunder or any amendment hereto or thereto, or the exercise of any right or remedy upon the occurrence of an Event of Default, including, without limitation, the recording and filing fees to perfect the liens granted under the Security Agreement and the costs of collection and reasonable attorneys’ fees and expenses, shall be paid by the Borrower within 15 days of receiving written notice thereof from the Lender.  Any such expense incurred by the Lender and not timely paid by the Borrower shall be added to the other obligations hereunder and shall earn interest at the same rate per annum as the principal hereunder.

 

(f)      Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of California without giving effect to any conflict or choice of laws principles.

 

(g)      Transfer; Successors and Assigns.  The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. This Note shall not be assignable by any Lender without the prior written consent of the Borrower, provided that the Lender may assign or transfer any of its rights, privileges, or obligations set forth in, arising under, or created by this Agreement to any entity controlled by, controlling or under common control with the Lender. The Borrower may not assign this Note without prior written consent of the Lender, provided that the Borrower may assign this Note to any successor of all or substantially all of its assets or business, or any entity surviving the merger, combination or consolidation with the Borrower.

 

(h)      Entire Agreement.  This Note and any other agreement or instrument entered into in connection herewith contains the entire agreement of the Borrower and the Lender with respect to the subject matter hereof.

 

(i)       Confidentiality.  In addition to separate confidentiality agreement, if any, each Lender will at all times keep confidential and not divulge, use or make accessible to anyone the terms and conditions of this Agreement and the transactions described herein, and any non-public material information concerning or relating to the business or financial affairs of the Borrower to which such party has been or will become privy relating to this Agreement, except to its employees and advisors in such capacity, as required to perform its obligations hereunder, if required by law or rules of a stock exchange on which its or its parent’s securities are listed, or with the prior written consent of the Borrower.

 

  

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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by its duly authorized representative as of the day and year first above written.

 

	  	
INTERNET MEDIA SERVICES, INC

	  	  
	  	
By: /s/ Michael Buechler

	  	
Name: Michael Buechler

	  	
Title:   Executive Vice President and Secretary

 

 

 

 

 

 

 

  

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