Document:

ex10_86.htm

Exhibit 10.86

 

SENIOR SECURED LINE OF CREDIT PROMISSORY NOTE

 

$ 200,000.00 December 31st, 2011

Sarasota, Florida

 

FOR VALUE RECEIVED, the undersigned, INVISA, INC., a Nevada corporation (“Borrower”) having an address at 1800 Second Street, Suite 965 Sarasota, Florida, 34236 promises to pay to the order of Centurian Investors, Inc, a Delaware corporation (“Lender”), having an office at 1800 Second Street, Suite 970 Sarasota, Florida, 34236, or such other place as the Lender may designate in writing, the principal amount up to and not to exceed TWO HUNDRED THOUSAND United States Dollars (U.S. $200,000.00), to the extent advanced hereunder and then outstanding, with interest on the unpaid principal balance from the date of this Senior Secured Promissory Note (this “Promissory Note”), until paid, at the Interest Rate (as hereinafter defined) provided herein.

 

1.           Rate of Interest.  The outstanding principal balance of this Promissory Note shall bear interest at ten percent (10%) per annum (the “Interest Rate”).

 

                      2.           Date and Time of Payment.  The outstanding principal balance of this Promissory Note, together with all accrued and unpaid interest, shall be paid in full on earlier to occur of (a) the Maturity Date or (b) the date of termination of this Promissory Note, whether by its terms, by prepayment, or by acceleration.  All amounts outstanding hereunder shall constitute Borrower’s obligations hereunder, and such obligations include without limitation all principal, interest (including all interest which accrues after the commencement of any case or proceeding by or against Borrower in bankruptcy whether or not allowed in such case or proceeding), expenses, attorneys’ fees and any other sum chargeable to Borrower hereunder and owing to Lender under this Promissory Note (all such obligations and all other obligations of Borrower under this Promissory Note ,(the “Obligations”).  No principal amount of this Note paid or prepaid may be reborrowed.

 

                      3.           Default Rate.  Notwithstanding Section 1, after the occurrence of any Event of Default and for so long as such Event of Default continues, and in any event from and after the Maturity Date, all principal, interest and other amounts payable under this Promissory Note shall bear interest until paid in full at a rate of interest equal to four percent (4%) above the per annum rate otherwise applicable hereunder (the “Default Rate”).

 

                      4.           Computation of Interest.  Interest on the principal amount hereof and all other Obligations shall be computed on the basis of a 360-day year, and shall be charged for the actual number of days elapsed during any month or other accrual period.

 

                      5.           Manner of Payment.  All payments by Borrower in respect of any Obligations shall be made without deduction, defense, set off or counterclaim, free and clear of all taxes delivered to Lender.

 

                      6.           Maturity.  To the extent not sooner due and payable in accordance with this Promissory Note, the Obligations shall be due and payable on March 31st, 2014 (the “Maturity Date”).

 

                      7.           Application of Payments.  All payments shall be applied to amounts then due and payable in the following order:  (a) to Lender’s costs and expenses reimbursable in connection herewith; (b) to interest accrued on the outstanding principal balance of this Promissory Note; (c) to the principal amount hereof; and (d) to all other Obligations, or in such other manner as Lender shall determine in its sole and exclusive discretion.

  

  

  

 

8.           Procedure for Borrowing and Use of Proceeds. The proceeds of this Promissory Note shall be funded in multiple advances (each, an “Advance”) by Lender to Borrower in the amounts and on such dates as determined by Lender based on requests from Borrower.  Borrower shall give Lender notice requesting that Lender make an Advance in accordance herewith specifying (a) the Borrowing Date, (b) the amount requested and (c) a detailed, itemized list of the use of such Advance.  Upon receipt of such notice from Borrower, Lender shall determine, in its sole and exclusive discretion, whether it shall make such amount available to Borrower on the Borrowing Date.  Upon each Advance, Lender shall record each Advance on Schedule I to this Promissory Note.  For purposes of this Section 8, the Borrowing Date shall mean any business day specified in the notice pursuant to this Section 8 as a date on which Borrower requests Lender to make a loan hereunder.    The obligation of Lender to make each subsequent Advance following the initial Advance hereunder is subject to the Lenders approval of the loan request made by Borrower in accordance with this Section 8 and shall be funded in the sole and exclusive discretion of Lender.  

 

9.           Security.  This Promissory Note shall be secured by (i) Five Million Three Hundred Thirty Thousand (5,333,333) shares of common stock of Borrower to be issued as of the date hereof and held in escrow and a continuing first priority security interest in all of Borrower’s right, title, and interest in and to, all property of Borrower (collectively, the “Collateral”), as more specifically set forth in the Security Agreement executed by Borrower in favor of Lender dated as of February 28, 2007.  (the “Security Agreement”).

 

 10.           Priority This Promissory Note shall be a senior obligation of Borrower, and for so long as this Promissory Note shall be outstanding, (i) Borrower shall be prohibited from incurring any and all future indebtedness without the prior written consent of Lender and (ii) any and all future indebtedness approved by Borrower in writing shall be deemed subordinate and inferior to, all respective right, title and interest of Lender, in, to and under this Promissory Note, this Security Agreement and any and all documents and instruments evidencing, securing or otherwise relating to this Promissory Note.

 

 11.           Representations and Warranties.  Borrower makes the following representations and warranties to Lender, which representations and warranties shall be true, correct, and complete as of the date hereof and shall survive the execution and delivery of this Promissory Note.

 

(a)         Due Organization and Qualification.  Borrower is duly organized and validly existing and in good standing under the laws of the jurisdiction of its organization and qualified to do business in any jurisdiction where it is required to be so qualified, and has all requisite power and authority to (i) own its assets and carry on its business, and (ii) execute, deliver and perform its Obligations.

(b)         Due Authorization; No Conflict.  The execution, delivery, and performance by Borrower of this Promissory Note has been duly authorized by all necessary action on the part of Borrower.  This Promissory Note has been duly executed and delivered by Borrower.  The execution, delivery, and performance by Borrower of this Promissory Note and the consummation of the transactions contemplated hereby, do not and will not (i) violate in any material respect any provision of federal, state, provincial or local law or regulation applicable to Borrower, its organizational documents, or any order, judgment, or decree of any court or other governmental authority, (ii) conflict with, result in a breach or termination of, or constitute (with due notice or lapse of time or both) a default under any material contractual obligation of Borrower, (iii) result in or require the creation or imposition of any lien of any nature whatsoever upon any properties or assets of Borrower, other than liens or security interests in favor of Lender, or (iv) require any approval of any of Borrower’s stockholders or any approval or consent of any other person or entity, other than consents or approvals that have been obtained and that are still in force and effect.  The execution, delivery, and performance by Borrower of this Promissory Note do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any

  

  

  

 

governmental authority, other than consents or approvals that have been obtained and that are still in force and effect.  This Promissory Note when executed and delivered by Borrower will be the legally valid and binding obligation of Borrower, enforceable against Borrower in accordance with its term, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(c)         No Litigation.  No litigation, investigation or proceeding of or before any arbitrator or government authority is (i) pending or, to the knowledge of Borrower, threatened with respect to this Promissory Note or the Collateral or any of the transactions contemplated hereby or (ii) pending or, to the knowledge of Borrower, threatened by or against Borrower, its properties or revenues which, if adversely determined, would have a material adverse effect on its business, operations, property or financial condition, when taken as a whole.

(d)         No Default.  Borrower is not in default under or with respect to any contractual obligation and no event of default has occurred or is continuing with respect to Borrower.

(e)         Taxes.  Borrower has filed or caused to be filed all tax returns required to be filed by it and has paid all taxes due and payable on said returns or on any assessments made against Borrower or any of its property.   All other taxes, fees or other charges on Borrower or any of its property by any governmental authority have been paid and no tax liens have been filed.

12.  Covenants of Borrower.  As of the date hereof and so long as the Obligations hereunder shall be outstanding:

 (a)  Borrower will preserve and keep in force and effect, its corporate existence and all licenses and permits necessary to the proper conduct of its business;

(b)  Borrower will promptly pay and discharge, all lawful taxes, assessments, charges or levies imposed upon Borrower, or upon or in respect of all or any part of the property or business of Borrower, all trade accounts payable in accordance with usual and customary business terms and all claims for work, labor or materials, which if unpaid might become a lien or charge upon any property of Borrower; provided, Borrower shall not be required to pay such tax, assessment, charge, levy, account payable or claim if (i) the validity, applicability or amount thereof is being contested in good faith by appropriate action or proceeding which will prevent the forfeiture or sale of any property of Borrower, and (ii) Borrower shall set aside on its books, reserves deemed by it to be adequate with respect thereto;

(c)  Borrower will promptly comply with all laws, ordinances or governmental rules and regulation to which it is subject, the violations of which would materially or adversely affect its properties, business, prospects, profits or condition or would result in any material lien or charge upon any property of Borrower;

(d)  Borrower will maintain, preserve and keep its properties which are used or useful in the conduct of its business in good repair and working order;

(e)  Borrower will not create, assume or incur or in any manner become liable with respect of any indebtedness except this Promissory Note and any indebtedness of Borrower incurred prior to the date hereof.

(f)  Borrower will not create or incur any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (a “Lien”) on its or its property or assets, whether now owned or hereinafter acquired, or upon any income or profits there from except

 (i)           Liens for property taxes and assessments or levies and liens that are not yet due and payable;

(ii)           Liens of or resulting from any judgment or award, the time for appeal or petition for rehearing of which shall not have expired or in respect of which the Company shall in good faith be prosecuting an appeal or proceeding for a review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured; or

(iii)           Liens or priority claims (A) incidental to the conduct of business, (B) created by any material agreement of Borrower entered into prior to and currently in effect as of the date hereof or (C) the ownership or lease of properties and assets and not in connection with the borrowing of money, provided, in each case, the obligation secured is not overdue, or if overdue, is being contested in good faith by appropriate actions or proceedings and provided, further that Borrower shall have received the prior written consent of Lender to any Lien described in (A) or (C) above; or

 

  

  

  

 

13.           Events of Default; Remedies; Acceleration.  (a) The occurrence of any one or more of the following events (regardless of the reason therefore) shall constitute an “Event of Default” hereunder:

                         (i) Borrower fails to make any payment of outstanding principal balance of this Promissory Note, or interest thereon, or any of the other Obligation when due and payable;

                         (ii) Any representation or warranty of Borrower made in this Promissory Note, the Security Agreement,  or any other document made by or on behalf of Borrower in connection herewith and the transactions contemplated hereby proves to have been false or incorrect in any material respect or Borrower shall fail to comply in all respects with any covenant herein or therein;

 (iii) Borrower shall violate any provision of this Promissory Note, the Security Agreement or any other document made by or on behalf of Borrower in connection herewith and the transactions contemplated hereby, including, without limitation, failure to comply with the terms and provisions of Section 8 of this Promissory Note;

 (iv) A case or proceeding is commenced against Borrower seeking a decree or order (i) under Title 11 of the United States Bankruptcy Code (11 U.S.C. §§101 et seq., as amended, and any successor statute, the “Bankruptcy Code”), or any other applicable federal, state or foreign bankruptcy or other similar law, rule or regulation, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for Borrower or for any substantial part of Borrower’s assets, or (iii) ordering the winding-up or liquidation of the affairs of s Borrower, and such case or proceeding shall remain undismissed or unstayed for sixty (60) days or more or a decree or order granting the relief sought in such case or proceeding shall be entered by a court of competent jurisdiction;

                         (v) Borrower, without the prior written consent of Lender (A) files a petition seeking relief under the Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or other similar law, rule or regulation, (B) consents to or fails to contest in a timely and appropriate manner the institution of proceedings thereunder or the filing of any such petition or the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for Borrower or for any substantial part of Borrower’s assets, (C) makes an assignment for the benefit of creditors, (D) takes any action in furtherance of any of the foregoing; or (E) admits in writing its inability to, or is generally unable to, pay its debts as such debts become due;

                         (vi)  If this Promissory Note, the Security Agreement, or any financing statement, document or other instrument executed, delivered or filed in connection herewith or with the security interest granted to Lender hereunder, shall, for any reason, fail or cease to create a valid and perfected lien on or security interest in any or all of the Collateral or the Collateral shall be compromised, encumbered or, in the case of the common stock, invalid, cancelled or otherwise rescinded;

 (vi) If Borrower shall default on any material obligations of Borrower or an event of default shall occur with respect to any material agreement of Borrower, whether such agreement shall be in effect or effective subsequent to this Promissory Note. (b)  Immediately upon the occurrence of any Event of Default, all of the Obligations of Borrower hereunder shall become immediately due and payable to Lender and the Obligations shall thereafter accrue interest at the Default Rate from the date of any Event of Default until such Obligations are paid in full (an “Acceleration”).  Promptly upon the occurrence of an Acceleration, Lender shall send Borrower written notice of the date upon which the Acceleration is effective and the names of  two (2) representatives of Lender (“Lender Nominees”) to be immediately appointed to the Board of Directors of Borrower (the “Default Notice”).  The Lender Nominees shall be appointed to the Board of Directors of Borrower not less than five days following the date of the Default Notice.  Except with respect to an Event of Default  under Section 13(a)(iv) and (v), Borrower shall have forty five (45) days (the forty fifth day hereinafter being the “Final Payment Date”) from the date of the Default Notice to pay Lender the total amount of the Obligations due and owning under this Promissory Note.  In the event that Borrower shall fail to satisfy in full all of the outstanding Obligations under this Promissory Note on or before the Final Payment Date, then Lender may (i) proceed to protect and enforce Lender’s rights by suit in equity, action at law and/or other appropriate proceeding, either for specific performance of any covenant or condition contained in this Promissory Note, the Security Agreement, or in any instrument or document delivered to Lender pursuant to this Promissory Note , or in aid of the exercise of any power granted in this Promissory Note or any such instrument or document, and (ii) proceed to enforce payment of the Obligations in such manner as Lender may elect, including the foreclosure of the Collateral in accordance with the terms of the Security Agreement, and to realize upon any and all rights of Lender hereunder.  Upon the occurrence of any Event of Default under Section 13(a)(iv) and (v), Lender shall have a right to immediately enforce its rights hereunder and proceed against or foreclose upon the Collateral without regard to the 45 day period set forth in this Section 13(b) To the extent not prohibited by applicable law which cannot be waived, all of Lender’s rights hereunder shall be cumulative.  Lender shall have all other rights and remedies not inconsistent herewith as provided under applicable law or in equity, and no exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default shall be deemed a continuing waiver.   No delay by Lender shall constitute a waiver, election or acquiescence by it.(c) In the event that the Obligations hereunder shall be paid in full by or on behalf of Borrower, after the Acceleration of this Promissory Note but prior to the Final Payment Date, then this Promissory Note shall be deemed paid in full, Lender shall promptly release any lien of Lender on the Collateral, and each Lender Nominee shall immediately resign from the Board of Directors of Borrower.   

 

  

  

  

 

14.  Certain Rights and Waivers.  To the extent not prohibited by the provisions of applicable law, Borrower hereby expressly waives: (a) all presentments, demands for performance, notices of nonperformance (except to the extent required by this Note), protests, notices of protest and notices of dishonor; (b) any requirement of diligence or promptness on the part of Lender in the enforcement of its rights under this Note; (c) any and all notices of every kind and description which may be required to be given by any statute or rule of law; and (d) any defense (other than indefeasible payment in full) which it may now or hereafter have with respect to its liability under this Note.

 

15.           Assignments.  Borrower may not assign or transfer any of its rights or obligations hereunder without the express, written consent of Lender.  Any such purported assignment or transfer by Borrower without the express, written consent of Lender shall be null and void ab initio.

16.           Costs and Expenses.  Borrower agrees to pay all costs and expenses of Lender, including without limitation all fees and disbursements of counsel, advisors, consultants, examiners and appraisers for Lender, in connection with (a) the issuance of this Promissory Note and advancement of principal amount hereunder (which fees and disbursements associated with the origination of this Promissory Note shall not exceed $3,500.00), (b) any enforcement (whether through negotiations, legal process or otherwise) of this Promissory Note, (c) any workout or restructuring of this Promissory Note during the pendency of one or more Events of Default, (d) any bankruptcy case or proceeding of Borrower or any appeal thereof, and (e) upon the occurrence and during the continuance of an Event of Default, any efforts to verify, protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise dispose of any of the Collateral.

       

17.                 CHOICE OF LAW.THE VALIDITY OF THIS NOTE, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE BORROWER AND LENDER WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA,WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES EXCEPT TO THE EXTENT NECESSARY TO ENFORCE THIS CHOICE OF LAW PROVISION.

 

18.                Notices.  All communications hereunder shall be in writing and shall be deemed to be duly given and received (a) upon delivery if delivered personally or upon confirmed transmittal if by facsimile, (b) on the next Business Day if sent by overnight courier, or (c) four (4) Business Days after mailing if mailed by prepaid registered mail, return receipt requested, in each case to the appropriate notice address or facsimile number.

  

  

  

 

19.             Independent Arms Length Transaction.  It is understood and agreed that this Promissory Note, the Security Agreement and the transactions contemplated hereby and thereby were negotiated in an arm’s length transaction separate and distinct from any other transaction or contractual obligations and are independent of any transaction or transactions between Borrower, on the one hand, and Lender and any of its affiliates or related entitles on the other hand.   Borrower further agrees that the contractual obligations of Borrower hereunder are in no way dependent or conditioned upon any other agreements, contracts or transactions whatsoever unless expressly stated herein.

 

IN WITNESS WHEREOF, the undersigned has executed this Promissory Note as of the date first written above.

 

	  	
INVISA, INC.

 

By:  /s/ Edmund C King

	  	
Name:  Edmund C. King

	 	
Title:  Chief Financial Officer

	 	
Date:   December 31, 2011exhibit10_9.htm

Exhibit 10.9

Secured Promissory Note by and among Greenhouse Holdings, Inc. and Premier Alliance Group, Inc., dated

March 5, 2012

 

  

  

  

Maximum Principal Amount: $1,000,000                                                                                                                 Issue Date: March 5, 2012

SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, GreenHouse Holdings, Inc., a Nevada corporation (hereinafter called “Borrower”), hereby promises to pay to Premier Alliance Group, Inc., located at 4521 Sharon Road, Suite 300, Charlotte, North Carolina 28211, Fax: (704) 521-8078 (together with its successors, representatives, and permitted assigns, the “Holder”) or order, without demand, the sum of One Million Dollars ($1,000,000) (“Principal Amount”) on March 5, 2013  (the “Maturity Date”), if not sooner paid.

ARTICLE I

GENERAL PROVISIONS

	
1.1      

	
Interest.  The outstanding principal amount of this Note shall bear interest at a rate

of two percent (2%) per annum and compounded quarterly from the Issue Date until the Maturity Date.  Such interest shall be based on a 365-day year and calculated for the actual number of days elapsed in which interest is being calculated.

	
1.2        

	
 Interest Payments.  The Borrower shall pay the Holder all accrued but unpaid interest on

the Maturity Date.  The Holder shall have no obligation to deliver to the Borrower any invoice or other statement setting forth the amount of principal, interest or any other amount due on any payment date, and any absence by the Holder to provide any such invoice or statement shall not reduce or otherwise impair the Borrower’s obligation to pay any amounts payable hereunder.  The Borrower shall make all interest payments under this Note to the Holder by 5:00 p.m. EST on the date when due.  The Borrower shall make all payments in United States Dollars in immediately available funds transferred by wire transfer to an account designated by the Holder.

	
      1.3      

	
Default Interest.  Upon the occurrence of an Event of Default (as defined in Article II

hereof), then to the extent permitted by law, the Borrower will pay interest in cash to the Holder, payable on demand, on the outstanding principal balance of this Note from the date of the Event of Default until such Event of Default is cured at the rate of the lesser of eighteen percent (18%) per annum and the maximum applicable legal rate per annum.

1.4           Ranking.  Except as set forth in the next sentence, this Note shall be senior in priority to all liabilities and obligations of the Borrower.  The Holder shall receive a first-priority security interest in all other assets of the Borrower. This Note shall be senior to all other future obligations and liabilities of the Borrower.  

1.5           Security.  Payment of the principal of, and interest on, this Note is secured by certain personal property as provided in the Security Agreement.

	
1.6        

	
Payment.  Payment of this Note and all interest thereon shall be paid to the Holder by wire

transfer to an account designated by the Holder or at such address outside of the United States and its possessions as the Holder may instruct the Borrower in writing in U.S. Dollars.

  

  

  

ARTICLE II

EVENT OF DEFAULT

The occurrence of any of the following events of default (“Event of Default”) shall, at the option of the Holder hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment or grace period, all of which hereby are expressly waived, except as set forth below:

2.1           Failure to Pay Principal or Interest.  The Borrower fails to pay any installment of principal, interest or other sum due under this Note when due.

2.2           Breach of Covenant.  The Borrower or any Subsidiary breaches any material covenant or other term or condition of the Transaction Documents or this Note in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

2.3           Breach of Representations and Warranties.  Any material representation or warranty of the Borrower made herein, in Transaction Documents, the Security Agreement or any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made and the Closing Date.

2.4           Liquidation.   Any dissolution, liquidation or winding up by Borrower or a Subsidiary of a substantial portion of their business.

 

2.5           Cessation of Operations.   Any cessation of operations by Borrower or a Subsidiary or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided, however that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they come due.

 

2.6           Maintenance of Assets.   The failure by Borrower or any Subsidiary to maintain any (i) material intellectual property rights, personal, real property, equipment leases or other assets which are necessary to conduct its business (whether now or in the future) and such breach is not cured within ten (10) days after written notice to the Borrower from the Holder, or (ii) assets that represent any material part of the Collateral (as defined in the Security Agreement).

2.7           Receiver or Trustee.  The Borrower or any Subsidiary of Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

2.8           Judgments.  Any money judgment, writ or similar final process shall be entered or made in a nonappealable adjudication against Borrower or any Subsidiary or any of its property or other assets for more than $50,000, unless stayed, vacated or satisfied within ten (10) days.

2.9           Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower or any Subsidiary of Borrower.

  

  

  

2.10           Non-Payment.   A default by the Borrower or any Subsidiary under any one or more obligations in an aggregate monetary amount in excess of $50,000 for more than five (5) days after the due date, unless the Borrower or such Subsidiary is contesting the validity of such obligation in good faith and has segregated cash funds equal to not less than one-half of the contested amount or all of the contested amount, whichever is greater.

2.11           Failure to Deliver Common Stock or Replacement Note.  Borrower’s failure to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, Sections 7 and 11 of the Subscription Agreement or, if required, a replacement Note following a partial conversion.

2.12           Executive Officers Breach of Duties.  Any of Borrower’s named executive officers or directors is convicted of a violation of securities laws related to activities regarding the Borrower’s or Lender’s securities, or a settlement in excess of $250,000 is reached by any such officer or director relating to a violation of securities laws related to activities regarding the Borrower’s securities, breach of fiduciary duties or self-dealing.

2.13           Cross Default.  A default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower is a party, or the occurrence of an event of default under any such other agreement to which Borrower is a party which is not cured after any required notice and/or cure period.

2.14           Notification Failure.   A failure by Borrower to notify Holder of any material event of which Borrower is obligated to notify Holder pursuant to the terms of this Note or any other Transaction Document.

ARTICLE III

SECURITY INTEREST

3.           Security Interest/Waiver of Automatic Stay.   This Note is secured by a security interest granted to the Holder pursuant to a Security Agreement, as delivered by Borrower to Holder.  The Borrower acknowledges and agrees that should a proceeding under any bankruptcy or insolvency law be commenced by or against the Borrower or a Subsidiary, or if any of the Collateral (as defined in the Security Agreement) should become the subject of any bankruptcy or insolvency proceeding, then the Holder should be entitled to, among other relief to which the Holder may be entitled under the Transaction Documents and any other agreement to which the Borrower or a Subsidiary and Holder are parties (collectively, “Loan Documents”) and/or applicable law, an order from the court granting immediate relief from the automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder to exercise all of its rights and remedies pursuant to the Loan Documents and/or applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION 362.  FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.  The Borrower hereby consents to any motion for relief from stay that may be filed by the Holder in any bankruptcy or insolvency proceeding initiated by or against the Borrower and, further, agrees not to file any opposition to

  

  

  

 any motion for relief from stay filed by the Holder.  The Borrower represents, acknowledges and agrees that this provision is a specific and material aspect of the Loan Documents, and that the Holder would not agree to the terms of the Loan Documents if this waiver were not a part of this Note. The Borrower further represents, acknowledges and agrees that this waiver is knowingly, intelligently and voluntarily made, that neither the Holder nor any person acting on behalf of the Holder has made any representations to induce this waiver, that the Borrower has been represented (or has had the opportunity to he represented) in the signing of this Note and the Loan Documents and in the making of this waiver by independent legal counsel selected by the Borrower and that the Borrower has discussed this waiver with counsel.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

 

If to the Borrower, to:

Greenhouse Holdings, Inc.

Attn: John Galt, President

Facsimile: 949-315-3827

If to the Holder:

To the address and facsimile number listed on the first paragraph of this Note.

4.3           Amendment Provision.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

  

  

  

4.4           Assignability.  This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.  The Borrower may not assign its obligations under this Note.

 

4.5           Expenses.  The Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

 

A.           Expenses for Amendments.  If the Holder shall employ counsel for advice or other representation or shall incur legal or other costs and expenses in connection with any amendment or modification of this Note or any of the other Transaction Documents, then, and in any such event, the reasonable counsel fees arising from such services and all expenses, costs, charges and other reasonable fees of such counsel incurred in connection with or related to any of the events or actions described above shall be payable by the Borrower.

 

B.           Costs of Collection.  In the event of a default or an Event of Default, in addition to any other sums payable by the Borrower hereunder, the Borrower shall pay the Holder’s and any other holders’ of the Notes costs of collection, including reasonable attorneys’ fees, including post judgment costs of collection, incurred by the Holder’s or any other holders’ of the Notes in the collection of the obligations of the Borrower to the Holder and any other holders of the notes whether under this Note or the other Transaction Documents, and in the enforcement of any provision hereof and thereof, whether suit be brought or not.

 

C.           Expenses in Dispute.  In the event of any dispute regarding the subject matter hereunder, the non-prevailing party in any dispute shall be required to fully reimburse the prevailing party in any dispute for all of its documents attorneys’ fees, costs and expenses incurred in connection with such dispute, the outcome of which shall have been determined by a court of competent jurisdiction.

 

4.6           Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or state courts of New York or in the federal courts located in the State and county of New York.  Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Holder.  This Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without limitation to any other remedies of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought.  For purposes of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of this Note, whether or not such other document or agreement was delivered together herewith or was executed apart from this Note.

 

  

  

  

4.7           Maximum Payments.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum rate permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum rate permitted by applicable law, any payments in excess of such maximum rate shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

4.8           Non-Business Days.   Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due or action shall be required on the next succeeding business day and, for such payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

4.9           Facsimile Signature.  In the event that the Borrower’s signature is delivered by facsimile transmission, PDF, electronic signature or other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with the same force and effect as if such signature page were an original thereof.

[Remainder of Page Intentionally Left Blank]

[Signature Pages Follow]

  

  

  

 IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized

 officer as of the 5th day of March 2012.

GREENHOUSE HOLDINGS, INC.

By:   /s/ John Galt___________________

           Name: John Galt

           Title: President

WITNESS:

______________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00202-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00202-of-00352.parquet"}]]