ONFO 8-K
Onfolio Holdings, Inc (ONFO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Cautionary Note Regarding Forward-Looking Statements
Statements in this Current Report on Form 8-K, including those regarding the Asset Purchase Agreement (as defined), future financial and operating results and any other statements about Onfolio Holdings Inc.’s future expectations, beliefs, goals, plans or prospects, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as anticipate, intend, believe, estimate, plan, seek, project or expect, may, will, would, could or should, the negative of these terms or other comparable terminology. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including; difficulties in integration or a failure to attain anticipated operating results or synergies, each of which could affect the accretiveness of the acquisitions, and the other factors described in Onfolio Holdings Inc.’s public filings filed with the Securities and Exchange Commission. Onfolio Holdings Inc. undertakes no obligation to update forward looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in future operating results, financial condition or business over time. You are further advised to review those events and factors described by us in Item 1.A "Risk Factors" in our most recent Form 10-K and Form 10-Q, which further detail and supplement the factors described in this paragraph.
Item 1.01 Entry into a Material Definitive Agreement
Asset Purchase Agreement - Eastern Standard LLC
As previously reported, on September 20, 2024, Eastern Standard LLC (“Eastern Standard Delaware”), a Delaware limited liability company and Onfolio Holdings Inc.’s (the “Company”) majority owned subsidiary, entered into an Asset Purchase Agreement (“Asset Purchase Agreement”) with Eastern Standard, LLC (“Eastern Standard Pennsylvania”), a Pennsylvania limited liability company, Mark Gisi, James Keller and Vincent Giordano. Pursuant to the Asset Purchase Agreement, Eastern Standard Delaware will purchase from Eastern Standard Pennsylvania all of Eastern Standard Pennsylvania’s assets utilized in the operation of its business of providing digital marketing services, including integrated branding, and digital customer experiences (the “Business Assets”).
Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Eastern Standard Pennsylvania agreed to sell to Eastern Standard Delaware the Business Assets, all as more fully described in the Asset Purchase Agreement. The aggregate purchase price for the Business Assets is $2,160,000. As of the closing, the Company owns 70% of Eastern Standard Delaware in exchange for $1,250,000 payable pursuant to two secured promissory notes which are guaranteed by the Company, and $410,000 of the Company’s Series A Preferred Shares. The entities comprising the Company’s special purpose vehicle funding program owns an aggregate of 20% of Eastern Standard Delaware in exchange for $500,000 payable in cash. Eastern Standard Pennsylvania owns a 10% roll-over equity interest in Eastern Standard Delaware.
A copy of the Asset Purchase Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference, along with Exhibits 10.1, 10.2, 10.3 and 10.4, which are also incorporated herein by reference.
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Item 2.01 Completion of Acquisition or Disposition of Assets.
The information contained in Item 1.01 herein is incorporated into this Item 2.01 by reference.
The Asset Purchase Agreement closed on October 18, 2024. Pursuant to the Asset Purchase Agreement, and subject to the terms and conditions contained therein, at the closing, Eastern Standard Pennsylvania sold to Eastern Standard Delaware the Business Assets, all as more fully described in the Asset Purchase Agreement. The aggregate purchase price for the Business Assets is $2,160,000. As of the closing, the Company owns 70% of Eastern Standard Delaware in exchange for $1,250,000 payable pursuant to two secured promissory notes which are guaranteed by the Company, and $410,000 of the Company’s Series A Preferred Shares. The entities comprising the Company’s special purpose vehicle funding program owns an aggregate of 20% of Eastern Standard Delaware in exchange for $500,000 payable in cash. Eastern Standard Pennsylvania owns a 10% roll-over equity interest in Eastern Standard Delaware.
A copy of the Closing Letter Agreement is attached hereto as Exhibit 2.2 and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 herein is incorporated into this Item 2.03 by reference.
The secured promissory notes consist of: (i) a $400,000 promissory note made by Eastern Standard Delaware in favor of Eastern Standard Pennsylvania with an interest at 8% per annum providing for interest only payments with a balloon payment of principal and interest at the end of one hundred twenty (120) days (“Short Term Promissory Note”); (ii) an $850,000 promissory note made by Eastern Standard Delaware in favor of Eastern Standard Pennsylvania with an interest rate at 8% per annum providing for interest only payments with a balloon payment of principal and interest at the end of two years (“Promissory Note”); and (iii) a Guaranty Agreement made by the Company to secure the payment of Eastern Standard Delaware pursuant to the Short Term Promissory Note, the Promissory Note and the other obligations of the Company and Eastern Standard Delaware under the Asset Purchase Agreement.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 herein is incorporated into this Item 3.02 by reference.
Item 7.01 Regulation FD
On October 22, 2024, the Company issued a press release announcing its entry into the Asset Purchase Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information disclosed pursuant to this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liability of that section and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
To be filed by amendment not later than 71 days after the last date on which this Form 8-K was required to be filed.
(b) Pro forma financial information.
To be filed by amendment not later than 71 days after the last date on which this Form 8-K was required to be filed.
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(d) Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ONFOLIO HOLDINGS INC. |
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Date: October 22, 2024 |
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| By: | /s/ Dominic Wells |
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| Dominic Wells, |
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| Chief Executive Officer |
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EXHIBIT 2.2
Eastern Standard LLC
8 The Green
Dover, Delaware 19901
October 18, 2023
Eastern Standard, LLC, Mark Gisi, James Keller and Vincent Giordano
PO Box 275
Linwood, NJ 08221
Ladies & Gentlemen:
Re: Agreements Regarding Closing
Reference is made to the Asset Purchase Agreement, between Eastern Standard LLC, a Delaware limited liability company (“Buyer”) and Eastern Standard, LLC, a Pennsylvania limited liability company, Mark Gisi, James Keller and Vincent Giordano (collectively, “Seller”), dated as of September 20, 2024, to be effective October 1, 2024 (the “Purchase Agreement”). This Letter Agreement is intended to set forth certain agreements and understandings with respect to the closing of the transactions provided for in the Purchase Agreement and hereby amends the Purchase Agreement to reflect such agreements and understandings as follows:
1. Defined Terms. Each capitalized but undefined term used in this Letter Agreement will have the meaning given to it in the Purchase Agreement.
2. Closing Date. The Closing Date is October 18, 2024, effective for economic purposes as of October 1, 2024.
3. Execution. This Letter Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Letter Agreement or any counterpart provision may be executed and delivered by electronic communications by portable document format (.pdf) each of which will be deemed an original.
4. Ratification of Purchase Agreement. Except as set forth herein, the Purchase Agreement remains unchanged and is hereby ratified and confirmed.
5. Governing Law. This Letter Agreement will be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction).
[SIGNATURE PAGE FOLLOWS]
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If the foregoing correctly sets forth our agreement, please so confirm by signing a copy of this Letter Agreement below.
| Very truly yours,
EASTERN STANDARD LLC
By: Onfolio Holdings Inc., its Manager | |||
| By: | /s/ Dominic Wells | ||
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| Dominic Wells, CEO | |
Agreed and accepted as of the date first above written.
EASTERN STANDARD, LLC
| By: | /s/James Keller |
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| James Keller, President |
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JAMES KELLER
| /s/James Keller |
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MARK GISI
| /s/ Mark Gisi |
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VINCENT GIORDANO
| /s/ Vincent Giordano |
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ONFOLIO HOLDINGS INC.
| By: | /s/ Dominic Wells |
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| Dominic Wells |
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EXHIBIT 10.1
(Execution Version)
SHORT TERM PROMISSORY NOTE
| $400,000.00 | Effective October 1, 2024 |
FOR VALUE RECEIVED, the undersigned, EASTERN STANDARD, LLC (the “Maker”), a Delaware limited liability company, promises to pay to the order of Eastern Standard, LLC, (“Payee” or “Company”) having a mailing address of PO Box 275, Linwood, New Jersey 08221, the initial principal amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) as hereinafter provided.
SECTION 1. BACKGROUND
1.1 This Short-Term Promissory Note (“Short Term Note”) is being issued by Maker to Payee pursuant to (i) the terms and conditions of that certain Asset Purchase Agreement dated ______________, to be effective October 1, 2024, by and among Maker and Payee (“APA”) for the purchase of all of the assets of the Company owned by Payee.
1.2 As a condition to closing of the transaction contemplated by the APA (the “Closing”), the payments by Maker to Payee under this Short Term Note are secured by the provisions of the agreements bearing the same date as this Short Term Note, which are the Guaranty ( “Guaranty”) of Onfolio Holdings, Inc., a Delaware corporation (“Guarantor”) which is the Manager of Maker, and the Security Agreement of Maker in favor of Payee ( “Security Agreement”).
1.3 As a further condition to Closing, Maker has signed and delivered to Payee that certain:
(a) Operating Agreement dated______________ to be effective October 1, 2024, by and among Maker and the Members of Maker (“Operating Agreement”); and
(b) The Note with an effective date of October 1, 2024, by Maker in favor of Payee in the amount of Eight Hundred and Fifty Thousand Dollars ($850,000.00) (“Note”).
1.4 Except as provided herein, capitalized terms used in this Short-Term Note shall have the same meaning as set forth in the aforesaid APA, Operating Agreement, and Note, as applicable.
SECTION 2. PAYMENT TERMS AND COVENANTS
2.1 Interest. Simple interest shall accrue on the unpaid principal balance at a rate equal to six percent (8.0%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.
2.2 Payments.
2.2.1 Commencing on November 1, 2024, and continuing on the same day of each subsequent month thereafter until the Maturity Date, Maker shall make an interest only payment to Payee in the amount of Two Thousand Six Hundred Sixty-Six and 67/100 Dollars ($2,666.67).
2.2.2 All amounts under this Note shall be due and payable in full without further notice or demand on February 1, 2025 (the “Maturity Date”).
2.2.3 All payments hereunder shall be made by the Maker to the Payee at the Payee’s address specified above on the due date thereof.
2.3 Prepayment. Maker may prepay this Short-Term Note, in part or in full, at any time without penalty.
SECTION 3. DEFAULTS AND REMEDIES
3.1 Defaults. The occurrence of any of the following events or conditions after the expiration of any applicable grace or notice period shall constitute an “Event of Default” hereunder:
(a) Maker fails to make any payments as required by this Short-Term Note within ten (10) days of when due, including the obligation to pay this Short-Term Note in full on or before the Maturity Date, which failure is not cured within ten (10) business days after written notice from Payee;
(b) Maker fails to make any payments as required by the Note within ten (10) days of when due, including the obligation to pay the Note in full on or before the Maturity Date as set forth in the Note;
(c) Maker’s material nonperformance of, or noncompliance with, any of the agreements, conditions, covenants, provisions or stipulations of this Short-Term Note or the Note, which failure is not cured within thirty (30) days after written notice from Payee;
(d) Maker’s or Guarantor’s material nonperformance of, or noncompliance with, any of the agreements, conditions, covenants, provisions or stipulations of the Operating Agreement, Guaranty or Security Agreement, which failure is not cured within five (5) days after written notice from Payee;
(e) Maker or Guarantor (i) applies for consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) makes a general assignment for the benefit of its creditors, or (iii) admits in writing its inability to pay is debts generally or as they become due;
(f) Maker, directly or indirectly, undergoes a change of control, by operation of law or otherwise, or sells all or substantially all of its assets, whether in a single transaction or in the aggregate over a number of transactions;
(g) The making by any person or entity of any levy, seizure or attachment upon any of the assets of the Maker or the entry of any judgment or orders against the Maker; or
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(h) A proceeding being filed or commenced by or against Maker or Guarantor for dissolution or liquidation which is not dismissed within sixty (60) days after filing, or Maker or Guarantor voluntarily or involuntarily terminating or dissolving or being terminated or dissolved; insolvency of Maker or Guarantor.
3.2 Acceleration. Upon an Event of Default extending beyond the applicable grace or cure period, or at any time thereafter, at the option of the Payee, all amounts evidenced by the Short-Term Note shall become immediately due and payable all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Maker. No remedy herein conferred upon the Payee or the holder of this Short-Term Note is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term herein, shall not be construed as a waiver or release of the same, or of any Event of Default thereunder, or of any obligation or liability of Payee thereunder. The recovery of any judgment by Payee and/or the levy of execution under any judgment shall not affect in any manner any rights, remedies, or powers of Payee hereunder, and such rights, remedies and power of Payee shall continue unimpaired as before. Further, the exercise by Payee of its rights and remedies shall not affect in any way the interest rate payable hereunder or any amounts due to Payee but interest shall continue to accrue on such amounts at the Default Rate (as hereinafter defined).
3.3 Late Charge. In the event that any payment of principal or interest due to Payee hereunder shall not be paid within ten (10) calendar days after the due date or if any check is returned, in addition to and not in limitation of any other rights or remedies which Payee may have hereunder, Maker shall pay Payee on demand a “late charge” computed at the rate of five cents ($.05) for each dollar (or part thereof) of the amount not paid, to cover the extra expense and inconvenience to Payee ensuring payment of such delinquent amount. Maker acknowledges that its failure to pay any amount due hereunder promptly within ten (10) calendar days when due will result in Payee incurring additional expense in servicing the loan evidenced by this Short Term Note, the loss of the use of the money due and frustration to Payee in meeting their loan commitments, that the damages to Payee in connection with such late payment are extremely difficult and impractical to ascertain, and that a sum equal to five cents ($.05) for each dollar which is not paid when due is a reasonable estimate of the damages incurred by Payee in connection with any such late payment. The amount of any such “late charge” not paid promptly following demand therefor shall be deemed outstanding and payable pursuant to this Short Term Note.
3.4 Default Rate. Following the occurrence of any event of default and continuing either until such event of default is cured and that fact acknowledged by the Payee or until the principal sum then outstanding hereunder and all other sums payable hereunder are paid in full, the principal sum outstanding hereunder shall bear interest at the interest rate calculated as set forth in accordance with Paragraph 1.1 hereof plus five (5%) percent per annum (“Default Rate”). Maker acknowledges that: (i) such additional rate is a material inducement to Payee to make the Short Term Note; (ii) Payee would not have made executed the APA in the absence of the agreement of the Maker to pay such additional rate; (iii) such additional rate represents compensation for increased risk to Payee that the balance of the Purchase Price under the APA will not be repaid; and (iv) such rate is not a penalty and represents a reasonable estimate of compensation to Payee for losses that are difficult to ascertain
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SECTION 4. MISCELLANEOUS
4.1 Waiver; Amendment. No delay or omission on the part of the Payee in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Short Term Note. No waiver of any right or amendment hereto shall be effective unless in writing and signed by the Payee or shall a waiver on one occasion be construed as a bar to or waiver of any such right on any future occasion. The Maker waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Short Term Note or any collateral for the Short Term Note, and assent to any extensions or postponements of the time of payment or any and all other indulgences under this Short Term Note or with respect to any such collateral to any and all substitutions, exchanges or releases of any such collateral, or to any and all additions or releases of any other parties or persons primarily or secondarily liable hereunder, which from time to time may be granted by the Payee in connection herewith regardless of the number or period of any extensions. MAKER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS SHORT-TERM NOTE AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
4.2 Expenses. The Maker will pay on demand all reasonable expenses of the Payee incurred in connection with the default, collection or enforcement of this Short-Term Note or any collateral for the Short Term Note, or any waiver or amendment of any provisions of any of the foregoing, including, without limitation, reasonable attorney’s fees.
4.3 No Assignment Without Consent. Maker may not assign this Short-Term Note without the written consent of Payee, and any attempted assignment without such consent of Payee shall be an Event of Default and deemed to be null and void.
4.4 Notices. All notices and other communications under this Short Term Note shall be in writing and shall be deemed to have been given or made if hand delivered, when delivered with a receipt evidencing such delivery, or if mailed, by certified mail, postage prepaid, addressed to the appropriate party and sent to the addresses set forth in the heading of this Short Term Note, or to such other address as either party may designate from time to time by notice to the other.
4.5 Governing Law; Consent to Jurisdiction. This Short-Term Note shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflicts of laws rules. The Maker agrees that any suit for the enforcement of this Short-Term Note may be brought in the courts of the State of Delaware or any Federal Court sitting in said state and consents to the exclusive jurisdiction of each such court. The Maker hereby waives any objection that they may now or hereafter have to the venue of any such suit or any such court or that such suit was brought in an inconvenient court.
4.6 Severability. If any provision of this Short-Term Note shall be invalid, illegal or unenforceable, such provisions shall be severable from the remainder of this Short Term Note and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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4.7 Modifications. This Short-Term Note may not be changed orally, but only by the written agreement signed by Maker and Payee.
4.8 Binding Effect. This Short-Term Note and all of the terms and provisions therein shall be binding upon Maker and its successors and assigns and shall inure to the benefit of an be enforceable by Payee and its heirs, administrators, representatives, successors and assigns.
4.9 Counterparts. This Short-Term Note may be executed by .pdf, .tif, .gif or similar attachment to electronic mail, or other electronic means, shall be as effective as delivery of a manually executed counterpart of this Short-Term Note.
| Maker: | EASTERN STANDARD, LLC A Delaware Limited Liability Company |
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| By: | Onfolio Holdings, Inc., Its Manager |
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| Name: Domnic Wells |
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| Title: CEO |
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EXHIBIT 10.2
(Execution Version)
PROMISSORY NOTE
| $850,000.00 | Effective October 1, 2024 |
FOR VALUE RECEIVED, the undersigned, EASTERN STANDARD, LLC, a Delaware limited liability company (“Maker”), promises to pay to the order of Eastern Standard, LLC, a Pennsylvania limited liability company, (“Payee” or “Company”) having a mailing address of PO Box 275, Linwood, New Jersey 08221, the initial principal amount of EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($850,000.00) as hereinafter provided.
SECTION 1. BACKGROUND
1.1 This Promissory Note (“Note”) is being issued by Maker to Payee pursuant to (i) the terms and conditions of that certain Asset Purchase Agreement dated ______________ to be effective October 1, 2024, by and among Maker and Payee (“APA”) for the purchase of all of the assets of the Company owned by Payee.
1.2 As a condition to closing of the transaction contemplated by the APA (the “Closing”), the payments by Maker to Payee under this Note are secured by the provisions of the agreements bearing the same date as this Note, which are the Guaranty ( “Guaranty”) of Onfolio Holdings, Inc., a Delaware corporation (“Guarantor”) which is the Manager of Maker, and the Security Agreement of Maker in favor of Payee ( “Security Agreement”).
1.3 As a further condition to Closing, Maker has signed and delivered to Payee that certain:
(a) Operating Agreement dated ______________ to be effective October 1, 2024 by and among Maker and the Members of Maker (“Operating Agreement”); and
(b) The Short-Term Promissory Note with an effective date of October 1, 2024 by Maker in favor of Payee in the amount of Four Hundred Thousand Dollars ($400,000.00) (“Short Term Note”).
1.4 Except as provided herein, capitalized terms used in this Note shall have the same meaning as set forth in the aforesaid APA, Operating Agreement, and Short-Term Note, as applicable.
SECTION 2. PAYMENT TERMS AND COVENANTS
2.1 Interest. Simple interest shall accrue on the unpaid principal balance at a rate equal to eight percent (8.0%) per annum, computed on the basis of the actual number of days elapsed and a year of 365 days.
2.2 Payments.
2.2.1 Commencing on November 1, 2024, and continuing on the same day of each subsequent month thereafter until the Maturity Date, Maker shall make an interest only payment to Payee in the amount of Five Thousand Six Hundred Sixty-Six and 67/100 Dollars ($5,666.67).
2.2.2 All amounts under this Note shall be due and payable in full without further notice or demand on October 1, 2026 (the “Maturity Date”).
2.2.3 All payments hereunder shall be made by the Maker to the Payee at the Payee’s address specified above on the due date thereof.
2.3 Prepayment. Maker may prepay this Note, in part or in full, at any time without penalty.
SECTION 3. DEFAULTS AND REMEDIES
3.1 Defaults. The occurrence of any of the following events or conditions after the expiration of any applicable grace or notice period shall constitute an “Event of Default” hereunder:
(a) Maker fails to make any payments as required by this Note within ten (10) days of when due, including the obligation to pay this Note in full on or before the Maturity Date, which failure is not cured within ten (10) business days after written notice from Payee;
(b) Maker fails to make any payments as required by the Short-Term Note within ten (10) days of when due, including the obligation to pay the Short Term Note in full on or before the Maturity Date as set forth in the Short Term Note;
(c) Maker’s material nonperformance of, or noncompliance with, any of the agreements, conditions, covenants, provisions or stipulations of this Note or the Short-Term Note, which failure is not cured within thirty (30) days after written notice from Payee;
(d) Maker’s or Guarantor’s material nonperformance of, or noncompliance with, any of the agreements, conditions, covenants, provisions or stipulations of the Operating Agreement, Guaranty or Security Agreement, which failure is not cured within five (5) days after written notice from Payee;
(e) Maker or Guarantor (i) applies for consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) makes a general assignment for the benefit of its creditors, or (iii) admits in writing its inability to pay is debts generally or as they become due;
(f) Maker, directly or indirectly, undergoes a change of control, by operation of law or otherwise, or sells all or substantially all of its assets, whether in a single transaction or in the aggregate over a number of transactions;
(g) The making by any person or entity of any levy, seizure or attachment upon any of the assets of the Maker or the entry of any judgment or orders against the Maker; or
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(h) A proceeding being filed or commenced by or against Maker or Guarantor for dissolution or liquidation which is not dismissed within sixty (60) days after filing; or Maker or Guarantor voluntarily or involuntarily terminating or dissolving or being terminated or dissolved; insolvency of Maker or Guarantor.
3.2 Acceleration; Remedies Cumulative. Upon an Event of Default extending beyond any applicable grace or cure period, or at any time thereafter, at the option of the Payee, all amounts evidenced by the Note shall become immediately due and payable all without demand, presentment, protest or notice of any kind, all of which are hereby waived by the Maker. No remedy herein conferred upon the Payee or the holder of this Note is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or any other provision of law. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term herein, shall not be construed as a waiver or release of the same, or of any Event of Default thereunder, or of any obligation or liability of Payee thereunder. The recovery of any judgment by Payee and/or the levy of execution under any judgment shall not affect in any manner any rights, remedies, or powers of Payee hereunder, and such rights, remedies and power of Payee shall continue unimpaired as before. Further, the exercise by Payee of its rights and remedies shall not affect in any way the interest rate payable hereunder or any amounts due to Payee but interest shall continue to accrue on such amounts at the Default Rate (as hereinafter defined).
3.3 Late Charge. In the event that any payment of principal or interest due to Payee hereunder shall not be paid within ten (10) calendar days after the due date or if any check is returned, in addition to and not in limitation of any other rights or remedies which Payee may have hereunder, Maker shall pay Payee on demand a “late charge” computed at the rate of five cents ($.05) for each dollar (or part thereof) of the amount not paid, to cover the extra expense and inconvenience to Payee ensuring payment of such delinquent amount. Maker acknowledges that its failure to pay any amount due hereunder promptly within ten (10) calendar days when due will result in Payee incurring additional expense in servicing the loan evidenced by this Note, the loss of the use of the money due and frustration to Payee in meeting their loan commitments, that the damages to Payee in connection with such late payment are extremely difficult and impractical to ascertain, and that a sum equal to five cents ($.05) for each dollar which is not paid when due is a reasonable estimate of the damages incurred by Payee in connection with any such late payment. The amount of any such “late charge” not paid promptly following demand therefor shall be deemed outstanding and payable pursuant to this Note.
3.4 Default Rate. Following the occurrence of any event of default and continuing either until such event of default is cured and that fact acknowledged by the Payee or until the principal sum then outstanding hereunder and all other sums payable hereunder are paid in full, the principal sum outstanding hereunder shall bear interest at the interest rate calculated as set forth in accordance with Paragraph 2.1 hereof plus five (5%) percent per annum (“Default Rate”). Maker acknowledges that: (i) such additional rate is a material inducement to Payee to make the Note; (ii) Payee would not have made executed the APA in the absence of the agreement of the Maker to pay such additional rate; (iii) such additional rate represents compensation for increased risk to Payee that the balance of the Purchase Price under the APA will not be repaid; and (iv) such rate is not a penalty and represents a reasonable estimate of compensation to Payee for losses that are difficult to ascertain.
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SECTION 4. MISCELLANEOUS
4.1 Waiver; Amendment. No delay or omission on the part of the Payee in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Note. No waiver of any right or amendment hereto shall be effective unless in writing and signed by the Payee or shall a waiver on one occasion be construed as a bar to or waiver of any such right on any future occasion. The Maker waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note or any collateral for the Note, and assent to any extensions or postponements of the time of payment or any and all other indulgences under this Note or with respect to any such collateral to any and all substitutions, exchanges or releases of any such collateral, or to any and all additions or releases of any other parties or persons primarily or secondarily liable hereunder, which from time to time may be granted by the Payee in connection herewith regardless of the number or period of any extensions. MAKER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS NOTE AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
4.2 Expenses. The Maker will pay on demand all reasonable expenses of the Payee incurred in connection with the default, collection or enforcement of this Note or any collateral for the Note, or any waiver or amendment of any provisions of any of the foregoing, including, without limitation, reasonable attorney’s fees.
4.3 No Assignment Without Consent. Maker may not assign this Note without the written consent of Payee, and any attempted assignment without such consent of Payee shall be an Event of Default and deemed to be null and void.
4.4 Notices. All notices and other communications under this Note shall be in writing and shall be deemed to have been given or made if hand delivered, when delivered with a receipt evidencing such delivery, or if mailed, by certified mail, postage prepaid, addressed to the appropriate party and sent to the addresses set forth in the heading of this Note, or to such other address as either party may designate from time to time by notice to the other.
4.5 Governing Law; Consent to Jurisdiction. This Note shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to its conflicts of laws rules. The Maker agrees that any suit for the enforcement of this Note may be brought in the courts of the State of Delaware or any Federal Court sitting in said state and consents to the exclusive jurisdiction of each such court. The Maker hereby waives any objection that they may now or hereafter have to the venue of any such suit or any such court or that such suit was brought in an inconvenient court.
4.6 Severability. If any provision of this Note shall be invalid, illegal or unenforceable, such provisions shall be severable from the remainder of this Note and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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4.7 Modifications. This Note may not be changed orally, but only by the written agreement signed by Maker and Payee.
4.8 Binding Effect. This Note and all of the terms and provisions therein shall be binding upon Maker and its successors and assigns and shall inure to the benefit of and be enforceable by Payee and its heirs, administrators, representatives, successors and assigns.
4.9 Counterparts. This Note may be executed by .pdf, .tif, .gif or similar attachment to electronic mail, or other electronic means, shall be as effective as delivery of a manually executed counterpart of this Note.
Maker: EASTERN STANDARD, LLC
A Delaware Limited Liability Company,
by its manager, Onfolio Holdings, Inc., a Delaware Corporation
| By: | ||
| Name: Domnic Wells Title: CEO |
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EXHIBIT 10.3
(Execution Version)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the “Agreement”) made and dated _______________to be effective as of October 1, 2024, by and between EASTERN STANDARD, LLC, a Delaware limited liability company (the “Company”), and EASTERN STANDARD, LLC, a Pennsylvania limited liability company (the “Seller”).
BACKGROUND
A. Company and Seller are parties to that certain Asset Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”), pursuant to which Seller has sold to Company, and Company has purchased from Seller, certain of Seller’s assets, as more particularly described in the Purchase Agreement (the “Acquired Assets”).
B. In consideration of the transaction described in the Purchase Agreement, Company has delivered (i) that certain Short Term Note with an effective date of October 1, 2024 payable to Seller in the principal amount of $400,000.00 (the “Short-Term Note”), and (ii) that certain Promissory Note dated as of October 1, 2024 payable to Seller in the principal amount of $850,000.00 (the “Note”).
C. The Purchase Agreement, the Short-Term Note and the Note provide that Company, in order to secure its duties, obligations and liabilities under the Short-Term Note, the Note and the Purchase Agreement, shall grant to Seller a security interest in the Collateral (as hereinafter defined) that is capable of being perfected by Seller’s filing of an appropriate financing statement in compliance with the UCC.
NOW, THEREFORE, in consideration of the promises contained herein and intending to be legally bound hereby, the parties hereto covenant and agree as follows:
SECTION 1. DEFINITIONS.
1.1 Incorporation of Defined Terms. Any capitalized terms used herein or in the Background provisions hereof which are not so defined, but which are defined in the Short-Term Note or the Term Note, shall have the meanings ascribed to such terms in the Short-Term Note or the Note.
1.2 Defined Terms. As used herein, the following terms shall have the meanings indicated unless the context otherwise requires:
“Books and Records” means all books and records relating to any of the Collateral (including, without limitation, financial statements, financial information, customer data, credit files, ledgers, computer programs, printouts, and other computer materials and records (and all media on which such data, files, programs, materials and records are or may be stored)).
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(Execution Version)
“Collateral” means, collectively:
a. All of the Acquired Assets of Seller acquired by Company pursuant to the Purchase Agreement;
b. Company’s rights in and to all contracts, approvals, permits, licenses, and authorizations, if any, to the extent transferrable, used in or necessary for the operation of the Business (as defined in the Purchase Agreement) and acquired by the Company pursuant to the Purchase Agreement;
c. All customer or client lists, operating data, active records, active files, price lists, distribution lists, supplier lists, sale and marketing materials, or other materials of Seller acquired by the Company pursuant to the Purchase Agreement;
d. Company’s rights in and to all Intangible Property Rights (as defined this Agreement below) acquired by Company pursuant to the Purchase Agreement;
e. Books and Records and Supporting Obligations relating or pertaining to any of the foregoing; and
f. all Proceeds thereof, including Proceeds of insurance policies insuring any of the foregoing.
“Collection Account Request” has the meaning ascribed to it in Section 5.4(c).
“Documents” has the meaning ascribed to it in Section 9102(a) of the UCC.
“Event of Default” has the meaning ascribed to it in the Note and the Short Term Note.
“Governmental Authority” means, collectively, any nation or government, any state, province, city, municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board or similar body, whether federal, state, territorial, local or foreign.
“Governmental Authorizations” means, collectively, any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification, or registration with, any Governmental Authority.
“Intangible Property Rights” shall mean, without limitation, all rights to the name and trademark “EASTERN STANDARD”, all goodwill, customer lists, client lists, social media properties, website domain names and content, intellectual property, and other proprietary rights that were owned by, or licensed to, Seller that were used or usable in, applicable to, or relating to the Business and acquired by the Company under the Purchase Agreement.
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(Execution Version)
“Licenses” means, collectively, all of Company’s right, title and interest in and to all license agreements with any other Person in connection with any of the Intangible Property Rights, whether Company is a licensor or a licensee under any such license agreement, and any right to prepare for sale, sell and advertise for sale any such Intangible Property Rights now or hereafter owned by Company and now or hereafter covered by such licenses, including, but not limited to, (i) the right to sue or otherwise recover for any and all past, present and future breaches and other violations thereof, (ii) all income, royalties, damages, settlements and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, damages, settlements and payments for past or future breaches and infringements thereof) and (iii) all rights of Company corresponding thereto throughout the world and all other rights of Company of any kind whatsoever accruing thereunder or pertaining thereto.
“Obligations” means, collectively, all of the Company’s indebtedness and other obligations owed by Company to Seller or Seller’s affiliates under the Note, the Short Term Note, or the Purchase Agreement and any document or agreement executed or delivered by a party pursuant to the terms and provisions of the Note, the Short Term Note, this Agreement or the Purchase Agreement.
“Other Agreements” means, collectively, any other agreements, pledges, instruments, documents, assignments, leases, suretyship agreements or contracts (including amendments, modifications or supplements thereto and restatements thereof) now or at any time or times hereafter executed and delivered by or on behalf of Company to Seller and delivered in connection with this Agreement or in connection with Seller’s security interest in the Collateral.
“Proceeds” has the meaning ascribed to it in Section 9102(a) of the UCC.
“Supporting Obligations” has the meaning ascribed to it in Section 9102(a) of the UCC.
“UCC” means the Pennsylvania Uniform Commercial Code, as in effect on the date hereof, as the same may be modified, amended, revised, supplemented and restated from time to time.
1.3 Other Terms. The term “State”, as used herein, means the Commonwealth of Pennsylvania. All other terms which are used in this Agreement and which are not otherwise defined in Sections 1.1 or 1.2 hereof, but which are defined or are used in the UCC, have the meanings ascribed to those terms in the UCC to the extent that such terms are used or defined therein. However, if a term is defined in Article 9 of the UCC of the State differently than in another Article of the UCC of the State, the term has the meaning specified in Article 9 of the UCC. The term “electronic document” applies in the event the 2003 revisions to Article 7 of the UCC, with amendments to Article 9 of the UCC, in substantially the form approved by the American Law Institute and the National Conference of Commissioners on Uniform State Laws, are now or hereafter adopted and become effective in the State or in any other relevant jurisdiction.
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(Execution Version)
SECTION 2. SECURITY INTERESTS; ASSIGNMENT; AND ADDITIONAL COLLATERAL; TERMINATION.
2.1 Grant of Security Interest in Collateral. To secure the payment of the Obligations to Seller and the prompt performance of the Obligations, Company hereby grants to Seller a security interest in the Collateral. Company agrees that the grant of security interests set forth in this Section 2.1 is intended as a contemporaneous exchange for value given by Seller to Company.
2.2 Perfection of Security Interests.
(a) Company hereby irrevocably authorizes Seller, at any time and from time to time to file in any filing office in any UCC jurisdiction any initial financing statements and amendments thereto, without Company’s signature, that (a) indicate the Collateral in detail, and (b) provide any other information required by part 5 of Article 9 of the UCC of the State or such other jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including whether Company is an organization, the type of organization and any organizational identification number issued to Company. Company agrees to furnish any such information to Seller promptly upon Seller’s request. Company also ratifies its authorization for Seller to have filed in any UCC jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.
(b) In addition to the authorization granted in favor of Seller under Section 2.2(a) hereof, Company shall, at its cost and expense, execute and deliver (or cause to be executed and delivered) to Seller, concurrently with the execution of this Agreement, and at any time or times hereafter at the request of Seller, all assignments, certificates of title, conveyances, assignment statements, financing statements, renewal financing statements, continuation statements, security agreements, affidavits, notices and all other agreements, instruments and documents that Seller may reasonably request, in form and substance satisfactory to Seller, and shall take any and all other steps reasonably requested by Seller, in order to perfect and maintain the security interests in the Collateral granted herein by Company to Seller and in order to fully consummate all of the transactions contemplated herein and under any Other Agreements. Without limiting the generality of the foregoing, at the request of Seller at any time and at the cost and expense of Company, Company shall execute and deliver a collateral assignment (in form and substance satisfactory to Seller) evidencing Seller’s perfected first-priority security interest in any portion or all of the Intangible Property Rights, and cause such collateral assignment and/or security agreement to be recorded with any recording, filing or similar office required by Seller (including, without limitation, the United States Patent and Trademark Office and the United States Copyright Office).
2.3 Goods in Possession of Bailee. If any Collateral of Company is, now or at any time hereafter, in the possession of a bailee, Company shall, following the occurrence and during the continuance of an Event of Default, promptly notify the Seller thereof and, at Seller’s request and option, shall promptly obtain an acknowledgement from the bailee, in form and substance satisfactory to Seller, that the bailee holds such Collateral for the benefit of Seller and such bailee’s agreement to comply, without further consent of Company, at any time with instructions of Seller as to such Collateral. Seller agrees with Company that Seller shall not give any such instructions unless an Event of Default has occurred and is continuing or if an Event of Default would occur after taking into account any action by Company with respect to the bailee.
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(Execution Version)
2.4 Power of Attorney. Company does hereby irrevocably make, constitute and appoint Seller and any of its officers, employees or agents, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Company or in Seller’s own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives such attorneys the power and right, on behalf of Company, without notice to or assent by Company, to do the following, provided that such action is not in contravention of the terms herein:
(a) sign the name of Company on any notice or other similar document which, in Seller’s good faith opinion, must be filed in order to perfect or continue perfected the interests granted in this Agreement or any Other Agreements;
(b) upon the occurrence and during the continuance of an Event of Default, receive, endorse, assign and deliver, in the name of Company or in the name of Seller, all checks, notes, drafts and other instruments relating to any Collateral including, but not limited to, receiving, opening and properly disposing of all mail addressed to Company concerning Collateral and to notify postal authorities to change the address for delivery of mail to such address as Seller may designate and Seller shall within three (3) business days return the balance of any such redirected mail to the Company;
(c) upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise dispose of or deal with any of the Collateral in such manner as is consistent with the UCC of the State or any other relevant jurisdiction and as fully and completely as though Seller were the absolute owner thereof for all purposes, and to do, at Company’s expense, at any time, or from time to time, all acts and things which Seller reasonably deems necessary or useful to protect, preserve or realize upon the Collateral and Seller’s security interest therein, in order to effect the intent of this Agreement, all no less fully and effectively as Company might do, including (i) the filing and prosecuting of registration and transfer applications with the appropriate federal, state or local agencies or authorities with respect to any Intangible Property Rights, and (ii) the execution, delivery and recording, in connection with any sale or other disposition of any Collateral, of the endorsements, assignments or other instruments of conveyance or transfer with respect to such Collateral; and
(d) do all other things reasonably necessary to carry out this Agreement and all Other Agreements.
To the extent permitted by law, Company hereby ratifies all that such attorneys shall lawfully do or cause to be done by virtue hereof. Neither Seller nor any attorney will be liable for any act of commission or omission nor for any error of judgment or mistake of fact or law, unless the same constitutes gross negligence or willful misconduct. This power, being coupled with an interest, is irrevocable so long as any of the Obligations remain unpaid or unsatisfied. The powers conferred on Seller hereunder are solely to protect the interests of Seller in the Collateral and shall not impose any duty upon Seller to exercise any such powers. Seller shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Company for any act or failure to act, except for Seller’s own gross negligence or willful misconduct.
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(Execution Version)
2.5 Termination. This Agreement will remain in full force and effect until all Obligations have been satisfied but excluding non-monetary obligations and obligations arising under the operating agreement of Eastern Standard LLC, a Delaware limited liability company, after the outstanding balance of the Short-Term Note and the Note have been paid, at which time this Agreement shall terminate. Upon termination, all security interests arising under this Agreement automatically shall be released, discharged and terminated, and Seller (at Company’s request and expense) will (i) execute and deliver such UCC termination statements and other documentation and instruments as reasonably necessary to effect such releases and terminations and (ii) deliver to the Company (or the Company’s designee) all certificates and instruments representing or evidencing Collateral being physically held by Seller hereunder.
SECTION 3. PRIORITY OF SECURITY INTERESTS.
3.1 Lien Status. Company represents and warrants that the security interests and other rights granted to Seller hereunder, when properly perfected by filing or other means of perfection required or permitted by the UCC, shall at all times constitute valid and perfected first-priority security interests vested in Seller in and upon all of the Collateral, that such Collateral is free and clear of all security interests, liens, encumbrances and claims of all other Persons, and that such security interests and other rights granted to Seller hereunder shall not become subordinate or junior to the security interests, liens, encumbrances or claims of any other Person, including, without limitation, the United States or any department, agency or instrumentality thereof, or any state, county or local governmental agency except any liens that arise by operation of law with respect to taxes, but only to the extent such liens are for current taxes and not overdue and unpaid taxes..
3.2 Other Liens. Company shall not grant (without the prior written approval of Seller) a security interest in or permit a lien or encumbrance upon any of the Collateral to anyone except Seller except arrangements entered into with payment processing vendors in the ordinary course.
SECTION 4. RECORDS.
4.1 Covenants Concerning Grantor’s Legal Status; Books and Records.
(a) Company covenants with Seller as follows: (i) without providing at least thirty (30) days prior written notice to Seller, Company will not change its name, its place of business or, if more than one, its chief executive office, or its mailing address or organizational identification number if it has one, (ii) if Company does not have an organizational identification number and later obtains one, Company will forthwith notify Seller of such organizational identification number, and (iii) Company will not change its type of organization, jurisdiction of organization or other legal structure.
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(Execution Version)
(b) Without limiting the generality of Seller’s rights under the Note and/or Short Term Note, Seller, at all reasonable times, shall have full access to and the right to audit Company’s Books and Records in order to confirm and verify all of the Collateral and to do whatever else Seller reasonably deems necessary to protect the interests of Seller in the Collateral.
SECTION 5. INTENTIONALLY OMITTED
SECTION 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES AND COVENANTS REGARDING THE COLLATERAL.
6.1 Representations and Warranties Regarding the Collateral. Company represents and warrants to Seller that:
(a) Company is the owner of or has other rights in or power to transfer the Collateral, free from any right or claim of any person or any adverse lien, except for the security interest created by this Agreement.
(b) Since its acquisition thereof from the Seller, Company has used reasonable and proper statutory notice in connection with its use of each Intangible Property Right. Except for any liens created or expressly permitted under the Note or the Short Term Note, Company, to its knowledge, is the exclusive owner of the entire and unencumbered right, title and interest in and to the Intangible Property Rights and is entitled to use all such Intangible Property Rights in the continued operation of the business of Company in the same manner as used by Seller prior to Buyer’s acquisition of the same from Seller. Company is not aware of any use of any of the items of Intangible Property Rights that could reasonably be expected to result in such item becoming subject to a claim of infringement by a third party or becoming invalid or unenforceable, including unauthorized uses by third parties and uses that were not supported by the goodwill of the business connected with such Intangible Property Rights. Company has not granted any license, release, covenant not to sue or non-assertion assurance to or in favor of any Person with respect to any of the Intangible Property Rights, other than the Licenses described herein.
6.2 Covenants Regarding Collateral. Company further covenants with Seller as follows: (a) the Collateral, to the extent not delivered to Seller pursuant to the provisions herein, will be kept at its primary place of business, and Company will not remove the Collateral from such location, without providing at least ten (10) days prior written notice to Seller, (b) Company will keep the Collateral in good order and repair and will not use the same in violation of law or any policy of insurance thereon, (c) Company will permit Seller, or its designee, to inspect the Collateral at any reasonable time, wherever located, (d) Company will pay promptly when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with the use or operation of the Collateral or incurred in connection with this Agreement, (e) Company will continue to operate, its business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances, and (f) Company will not sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein except in the ordinary course of business.
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(Execution Version)
SECTION 7. TAXES AND INSURANCE.
7.1 Payment of Taxes. Company shall pay, when due, all sales, use, excise, personal property, income, withholding, corporate franchise and all other taxes, assessments and governmental charges upon and in relation to its ownership or use of any of its assets, income or gross receipts for which Company is or may be liable, except to the extent any such liabilities are being contested in good faith and with due diligence by Company and the amount of such liabilities, or the contest thereof, does not, in Seller’s reasonable discretion, have a material adverse effect on the financial condition of Company, its ability to repay the Obligations, the security interests of Seller upon the Collateral, or the priority of such security interests.
7.2 Discharge of Tax Liens. Company shall not permit, or suffer to remain, and will promptly discharge, any lien arising from any unpaid tax, assessment, levy or governmental charge on the Collateral unless Company contests such lien or liens in good faith, provides Seller with all facts concerning the lien and provides adequate reserves on the books of Company to protect against such loss or deposits adequate cash with Seller, in such amount as Seller may reasonably require, as a reserve for the payment thereof.
7.3 Authority to Pay Taxes. In the event Company shall fail to pay any such tax, assessment, levy or governmental charge on any Collateral or to discharge any such lien or contest the same in good faith and comply with Section 7.2 hereof, Seller, without waiving or releasing any obligation or default of Company hereunder, may upon five (5) days prior written notice, but shall be under no obligation to do so, make such payment, settlement, compromise or release or cause to be released any such lien, and take any other action with respect thereto which Seller reasonably deems advisable. All sums paid by Seller in satisfaction of, or on account of any tax, levy or assessment or governmental charge, or to discharge or release any lien, and any expenses, including reasonable attorneys’ fees, court costs and other charges relating thereto, shall become a part of the Obligations secured by the Collateral and payable on demand and, until paid, shall bear interest at the Default Rate.
7.4 Insurance. Company shall keep all of the Collateral insured, at its expense, providing for adequate coverage naming Seller as a loss payee and additional insured..
7.5 Policies; Proceeds. All proceeds payable under any of insurance policies shall be payable in all events to Seller, but at the option of Seller any such proceeds may be released to Company. Company hereby grants to Seller a continuing security interest in and to all such policies to the extent such relate to the Collateral and the Proceeds thereof to secure the repayment of the Obligations and agrees that Seller shall have the right, in the name of Company or in the name of Seller, to file claims under any insurance policies, to receive, receipt and give acquittance for any payments that may be made thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies solely as they relate to the Collateral.
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(Execution Version)
7.6 Authority to Obtain Insurance. If Company shall fail at any time or times hereafter to obtain and maintain any of the policies of insurance on the Collateral required hereby, or fail to pay any premium in whole or in part relating to any such policies, then Seller may, but it shall have no obligation to do so, upon five (5) days prior written notice obtain and cause to be maintained any or all of such policies, and pay any part or all of the premiums due thereunder, without thereby waiving any default by Company, and any sums so disbursed by Seller shall become a part of the Obligations secured by the Collateral, payable on demand and, until paid, shall bear interest at the Default Rate.
SECTION 8. RIGHTS AND REMEDIES.
8.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Seller shall have, in addition to any other rights and remedies contained in this Agreement or in any Other Agreements, all the rights and remedies of a secured party under the UCC, all of which shall be cumulative to the extent permitted by law. In addition to all such rights and remedies, Seller may, following the occurrence and during the continuance of an Event of Default, sell, lease or otherwise dispose of the Collateral, or any part thereof, at public or private sale, for cash, credit or any combination thereof. Seller shall have the right to bid and purchase at such sale or sales. The Proceeds of any sale or other disposition of all or any part of the Collateral upon which Seller has a security interest, after payment of all costs and expenses of sale, including retaking, holding, preparing for sale, selling and the like and also including reasonable attorneys’ fees and legal expenses incurred by Seller, shall be applied by Seller to the then outstanding balance of any of the Obligations and any surplus shall be paid by Seller to Company. Company shall be liable to Seller for any deficiency.
8.2 Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Seller to exercise remedies in a commercially reasonable manner, Company acknowledges and agrees that it is not commercially unreasonable for Seller (a) to fail to incur expenses reasonably deemed significant by Seller to prepare Collateral for disposition or otherwise to fail to complete raw material or work in process into finished goods or other finished products for disposition, (b) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection remedies against account debtors or other persons obligated on Collateral or to fail to remove Liens on or any adverse claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not in the same business as Company, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (h) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale rather than retail markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure Seller against risks of loss, collection or disposition of Collateral or to provide to Seller a guaranteed return from the collection or disposition of Collateral, or (l) to the extent deemed appropriate by Seller, to obtain the services of brokers, investment bankers, consultants and other professionals to assist Seller in the collection or disposition of any of the Collateral. Company acknowledges that the purpose of this Section 8.2 is to provide non-exhaustive indications of what actions or omissions by Seller would fulfill Seller’s duties under the UCC of the State or any other relevant jurisdiction in Seller’s exercise of remedies against the Collateral and that other actions or omissions by Seller shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this Section 8.2. Without limitation upon the foregoing, nothing contained in this Section 8.2 shall be construed to grant any rights to Company or to impose any duties on Seller that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 8.2.
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(Execution Version)
8.3 Legal Costs. If at any time or times hereafter upon the occurrence and during the continuance of an Event of Default, Seller employs counsel to prepare or consider approvals, waivers or consents, or to intervene, file a petition, answer, motion or other pleading in any suit or proceeding relating to this Agreement or any Other Agreements, or relating to any Collateral, or to protect, take possession of, or liquidate any Collateral, or to attempt to enforce any security interest or lien in any Collateral, or to enforce any rights of Seller or liabilities of Company’s account debtors, or any other Person which may be obligated to Seller by virtue of this Agreement or any Other Agreements, instrument or document now or hereafter delivered to Seller by or for the benefit of Company, then in any of such events, all of the reasonable attorneys’ fees arising from such services, and any actual, out-of-pocket, expenses, costs and charges relating thereto, shall become a part of the Obligations secured by the Collateral, payable on demand and, until paid, shall bear interest at the Default Rate.
8.4 Right of Entry. Upon the occurrence and during the continuance of an Event of Default, Seller shall have the right to enter and remain upon the various premises of Company without cost or charge to Seller, and to use the same, together with materials, supplies, and Books and Records of Company, for the purpose of preparing for and conducting the sale of Collateral, whether by foreclosure, auction or otherwise. In addition, upon the occurrence and during the continuance of an Event of Default, Seller may remove from such premises the Collateral and any Books and Records with respect thereto, to the premises of Seller or any designated agent of Seller for such time as Seller may desire, in order to effectively collect or liquidate the Collateral.
8.5 Deposits. Whether or not any Obligations are due, Seller may following and during the continuance of an Event of Default demand, sue for, collect, or make any settlement or compromise which it deems desirable with respect to the Collateral. Regardless of the adequacy of Collateral or any other security for the Obligations, any deposits or other sums at any time credited by or due from Seller or any other Seller to Company may at any time be applied to or set off against any of the Obligations then due and owing.
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(Execution Version)
8.6 Marshalling. Seller shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the rights and remedies of Seller hereunder in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, Company hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of Seller’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, Company hereby irrevocably waives the benefits of all such laws.
8.7 Notice. Seller shall provide Company notice of a sale, lease or other disposition of or other intended action by Seller with respect to any of the Collateral at least ten (10) business days prior to such proposed action. Such notification shall constitute fair and reasonable notice to Company of such action.
8.8 No Waiver. Seller’s failure at any time or times hereafter to require strict performance by Company of any of the provisions, warranties, terms and conditions contained in this Agreement or any Other Agreements shall not waive, affect or diminish any right of Seller at any time or times hereafter to demand strict performance therewith and with respect to any other provisions, warranties, terms and conditions contained in this Agreement or any Other Agreements, and any waiver of any Event of Default shall not waive or affect any other Event of Default, whether prior or subsequent thereto, and whether of the same or a different type. None of the warranties, conditions, provisions and terms contained in this Agreement or any Other Agreements shall be deemed to have been waived by any act or knowledge of either Seller, its agents, officers or employees, except by an instrument in writing signed by an officer of Seller and directed to Company specifying such waiver.
SECTION 9. MISCELLANEOUS
9.1 Application of Payments. Upon the occurrence and during the continuance of an Event of Default, Company irrevocably waives the right to direct the application of any and all payments (including Proceeds of Collateral) at any time or times thereafter which may be received by Seller by or for the benefit of Company.
9.2 Legal Effect. This Agreement and any Other Agreements, instruments and documents executed and delivered pursuant hereto or to consummate the transactions contemplated hereunder shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided, that Company may not assign or delegate any of Company’s rights or obligations hereunder without the prior written consent of Seller which Seller may grant or withhold in Seller’s sole discretion.
9.3 Overdue Amounts. Until paid, all amounts due and payable by Company hereunder shall be a debt secured by the Collateral and after remaining unpaid for a period of ten (10) days after due shall bear, whether before or after judgment, interest at the Default Rate.
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(Execution Version)
9.4 Construction. The domestic internal laws (but not the law of conflicts of law) of the Commonwealth of Pennsylvania shall govern and control the construction, enforceability, validity and interpretation of this Agreement and any Other Agreements, except to the extent that the UCC provides for perfection under the application of another state.
9.5 Waiver. Company waives demand, protest, notice of protest, notice of default, release, compromise, settlement, extension or renewal of all commercial paper, accounts, contract rights, instruments, guarantees, and otherwise, at any time held by Seller on which Company may in any way be liable, notice of nonpayment at maturity of any and all Accounts, and notice of any action taken by Seller, unless expressly required by this Agreement.
9.6 Representations. All representations and warranties of Company and all terms, provisions, conditions and agreements to be performed by Company contained in this Agreement, in the Guaranty, and in any Other Agreements, instrument or document executed heretofore or concurrently herewith by Company and delivered to Seller, shall be true and satisfied at the time of the execution of this Agreement, and shall survive the execution and delivery of this Agreement, the Guaranty, and all Other Agreements.
9.7 Choice of Remedies. To the extent that any of the Obligations are now or hereafter secured by property other than the Collateral, or by a guaranty, endorsement or property of any other Person, then Seller shall have the right to proceed against such other property, guaranty or endorsement upon Company’s default in the payment of any of the Obligations or in any of the terms, covenants or conditions contained in this Agreement or in any Other Agreement, and Seller shall have the right, in Seller’s sole discretion, to determine which rights, security, liens, security interests or remedies Seller shall at any time pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of them or any of Seller’s rights or the Obligations under this Agreement or under any Other Agreements.
9.8 Notice, etc. All notices, requests and other communications hereunder shall be made in the manner set forth in the Purchase Agreement.
9.9 Severability. 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 provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
9.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Note constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page to this Agreement by telecopier (or electronic mail (in PDF format)) shall be effective as delivery of a manually executed counterpart of this Agreement.
9.11 Additional Grantors. Subsidiaries of Company (each, an “Additional Grantor”) may hereafter become parties to this Agreement by executing and delivering a joinder agreement in form and substance reasonably satisfactory to Seller and its counsel. Upon such execution and delivery by any Additional Grantor, such Additional Grantor shall be bound by all of the terms, covenants and conditions hereof to the same extent as if such Additional Grantor had executed this Agreement as of the Effective Date, and Seller shall be entitled to all of the benefits of such Additional Grantor’s obligations hereunder. Company expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition of an Additional Grantor nor by any election of Seller not to cause any Person to become an Additional Grantor.
[Remainder of page intentionally left blank.]
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(Execution Version)
IN WITNESS WHEREOF, this Agreement has been duly executed as an instrument under seal on the day and year first above written.
| EASTERN STANDARD, LLC a Delaware limited liability company, by its Manager, Onfolio Holdings, Inc., a Delaware corporation | |||
| By: | |||
|
| Name: | Dominic Wells | |
| Title: | CEO | ||
| (“Company”) | |||
| EASTERN STANDARD, LLC, a Pennsylvania limited liability company | |||
| By: | |||
|
| Name: | James Keller | |
| Title: | President | ||
| (“Seller”) | |||
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EXHIBIT 10.4
(Execution Version)
GUARANTY
THIS GUARANTY (this “Guaranty”) dated ______________, to be effective October 1, 2024, is made by ONFOLIO HOLDINGS, INC, a Delaware corporation, (“Guarantor”) in favor of EASTERN STANDARD, LLC, a Pennsylvania limited liability company (“Lender”).
RECITALS
WHEREAS, pursuant to that certain Asset Sale and Purchase Agreement by and among Lender, Guarantor, EASTERN STANDARD, LLC, a Delaware limited liability company (“Borrower”), Mark Gisi, James Keller and Vincent Giordano, dated ______________, to be effective October 1, 2024, (the “APA”) and that certain Short Term Promissory Note made by Borrower in favor of Lender dated ______________, to be effective October 1, 2024, (as the same may be amended from time to time, the “Short Term Note”), Lender will make a loan to Borrower in the principal amount of up to FOUR HUNDRED THOUSAND DOLLARS ($400,000.00) (the “Short Term Note Amount”);
WHEREAS, pursuant to APA, and that certain Promissory Note made by Borrower in favor of Lender dated ______________ to be effective October 1, 2024, (as the same may be amended from time to time, the “Note”), Lender will make a loan to Borrower in the principal amount of up to EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($850,000.00) (the “Note Amount”);
WHEREAS, the total amount of the loans made by Lender to Borrower is ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,250,000.00) (the “Loan Amount”);
WHEREAS, the Loan Amount and all other debts and liabilities of Borrower to Lender under the Short Term Note and the Note from time to time are referred to herein as the “Obligations”;
WHEREAS, Borrower is a wholly owned subsidiary of Guarantor and Guarantor is receiving a direct or indirect benefit to Lender extending the Loan Amount under the Short Term Note and the Note; and
WHEREAS, as a further condition to extending the Loan Amount to Borrower, Lender requires Guarantor to enter into this Guaranty and Lender is not willing to make the Loan Amount under the Note or the Short Term Note to Borrower unless Guarantor unconditionally guarantees payment and performance to Lender of the Obligations.
NOW, THEREFORE, in consideration of the recitals set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
1. Guaranty. In consideration of the Loan Amount, Guarantor hereby unconditionally, absolutely, and irrevocably guarantees to Lender the due and punctual performance and payment at maturity, whether by acceleration or otherwise, of the Obligations (the “Guaranteed Amount”). This Guaranty shall remain in full force and effect until (a) Borrower has fully satisfied all of the Obligations, or (b) such time as the Guaranteed Amount has been paid to Lender, whichever is earlier. At such time, this Guaranty shall be marked “Cancelled” and returned to Guarantor. Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Obligations as a primary obligor.
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(Execution Version)
2. Payment. If any of the Obligations are not punctually paid when such indebtedness becomes due under the Note or the Short-Term Note and after expiration of applicable notice and cure periods provided under the terms of the Note or the Short Term Note, either by its terms or as a result of the exercise of any power to accelerate, Guarantor shall, immediately on demand, pay the amount due thereon to Lender.
3. Reinstatement; Guaranty Absolute; Consent.
(a) Guarantor hereby agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations is rescinded or must otherwise be restored by Lender, upon the insolvency, bankruptcy or reorganization of Borrower or otherwise, all as though such payment had not been made.
(b) This Guaranty constitutes an unconditional, absolute, and irrevocable guaranty of performance and payment when due and not of collection, and Guarantor specifically agrees that it shall not be necessary or required that Lender exercise any right, assert any claim or demand or enforce any remedy whatsoever against Borrower (or any other person) before or as a condition to the obligations of Guarantor hereunder.
(c) The Guarantor consents to all of the terms, covenants and conditions of the APA, the Note, the Short-Term Note, and any other document governing or relating to any of the Obligations. The Guarantor hereby irrevocably waives any notice of any compromise, forbearance, indulgence, amendment, modification, endorsement, extension or renewal of any of the Obligations or any of the terms, covenants or conditions of the APA, the Note, or the Short Term Note.
4. Representations and Warranties. Guarantor hereby represents and warrants for the benefit of Lender the following:
(a) Guarantor is a corporation, duly organized, validly existing and in good standing under the laws of its state of incorporation. Guarantor has the power to execute, deliver and carry out the terms and provisions of this Guaranty and this Guaranty has been duly executed and delivered and constitutes Guarantor’s binding, valid and enforceable obligation, enforceable in accordance with its terms (except as enforcement thereof may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights generally and equitable principles relating to or affecting enforcement of creditors’ rights generally or relief of debtors generally).
(b) It has received, or will receive, direct or indirect benefits from the making of this Guaranty and the Obligations.
(c) It has relied upon its own due diligence in making its own independent evaluation and appraisal of Borrower and the business affairs and financial condition of Borrower, including the Obligations; it will continue to be responsible for making its own independent appraisal of such matters; and it has not relied upon and will not hereafter rely upon Lender for information regarding Borrower, any collateral or the Obligations.
(d) As of the date hereof, and after giving effect to this Guaranty and the contingent obligation evidenced hereby, Guarantor is, and will be, solvent, and has and will have assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and has and will have property and assets sufficient to satisfy and repay its obligations and liabilities.
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(Execution Version)
5. Waivers.
(a) Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty (including, without limitation, notice of default, non-payment, partial payment, presentment, demand, protest or dishonor and all other notices to which Guarantor might otherwise be entitled, or which might be required by law to be given to Guarantor by Lender) and any requirement that Lender protect, secure, perfect or insure any security interest or lien, or any property subject thereto, or exhaust any right or take any action against Borrower or any other person (including any other guarantor) or entity or any collateral securing the Obligations.
(b) No invalidity, irregularity or unenforceability of all or any part of the Obligations or the impairment or loss of any security therefor, whether caused by any actions or inactions of Lender, or otherwise, shall affect, impair or be a defense to this Guaranty.
(c) Guarantor hereby postpones any claim, right or remedy Guarantor may now have or hereafter acquire against Borrower that arises hereunder and/or as a result of Guarantor’s performance hereunder including, without limitation, any claim, remedy or right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Lender against Borrower or any security that Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise, until all of the Obligations shall have been paid and performed in full.
(d) Guarantor hereby agrees that it will not claim any setoff, recoupment or counterclaim against Borrower in respect of any liability of Guarantor to Borrower until all of the Obligations shall have been paid and performed in full.
(e) The payment of any amounts due with respect to any indebtedness of Borrower now or hereafter owed to Guarantor shall be subordinated to the prior payment in full of all of the payments with respect to the Obligations. Guarantor agrees that, after the occurrence of an Event of Default (as defined in the Note or the Short Term Note) and as long as it continues, Guarantor will not demand, sue for or otherwise attempt to collect any such indebtedness of Borrower to Guarantor until all of the Obligations shall have been paid and performed in full. If, notwithstanding the foregoing sentence, Guarantor shall collect, enforce or receive any amounts in respect of such indebtedness while an Event of Default has occurred and is continuing, such amounts shall be collected, enforced and received by Guarantor as trustee for Lender (and its assigns) and be paid over to Lender (or its permitted assigns) on account of the Obligations without affecting in any manner the liability of Guarantor under the other provisions of this Guaranty. The provisions of this Section 5 shall be supplemental to and not in derogation of any rights and remedies of Lender under any separate subordination agreement which Lender may at any time and from time to time enter into with Guarantor.
Guarantor acknowledges that it has received adequate consideration for entering into this Guaranty and that all waivers and acknowledgments under this Guaranty by Guarantor are knowingly made.
6. Miscellaneous.
(a) Neither Guarantor’s obligation to pay and perform in accordance with the terms of this Guaranty, nor any remedy for the enforcement thereof nor the amount of the Obligations shall be impaired, modified, changed, stayed, released or limited in any manner whatsoever by any impairment, modification, change, discharge, release, limitation or stay of the Obligations or the obligations of Borrower or its estate in bankruptcy or any remedy for the enforcement thereof, resulting from the operation of any present or future provision of the bankruptcy code of the United States or other statute, State or Federal, or from the decision of any court interpreting any of the same, and Guarantor shall be obligated under this Guaranty and the amount of the Obligations shall for the purposes of this Guaranty be determined as if no such impairment, stay, modification, change, discharge, release or limitation had occurred.
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(Execution Version)
(b) This Guaranty shall be binding upon Guarantor and its legal representatives, successors and permitted assigns, whether so expressed or not, and shall inure to the benefit of Lender and its legal representatives, successors and permitted assigns, whether so expressed or not. Guarantor may not, without the prior written consent of Lender, assign any of its rights, powers, duties or obligations hereunder.
(c) This Guaranty shall be construed in accordance with and governed by the laws of the State of Delaware.
(d) The section and caption headings herein of this Guaranty are for convenience only and shall not affect the construction of this Guaranty. Unless otherwise specified, references in this Guaranty to article, section and subsection numbers are to such article, section and subsection numbers of this Guaranty.
(e) No failure or delay on the part of any party hereto in exercising any right hereunder and no course of dealing between Borrower or Guarantor and Lender shall operate as a waiver thereof, nor shall any single or partial exercise by any party hereto of any right hereunder preclude any other or further exercise thereof or the exercise of any other right hereunder. No amendment, modification or waiver of, or consent with respect to, any provision of this Guaranty shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(f) All notices, requests and other communications to be given hereunder shall be in writing and shall be given to such party at such address as such party may designated from time to time. All notices and other communications given to any party hereto in accordance with the provisions of this Guaranty shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service and sent by email, in each case delivered or sent to such party as provided herein or in accordance with the latest unrevoked direction from such party given in accordance with this provision.
(g) If any provision of this Guaranty is held to be illegal, invalid, or unenforceable, such provision shall be fully severable, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected thereby.
(h) For the purposes of this Section, delivery by facsimile or other electronic means of an executed signature page of this Guaranty shall be effective as delivery of an executed counterpart hereof, but the party delivering a facsimile or other electronic copy of an executed signature page shall deliver an original copy of an executed signature page as soon as possible after delivering the facsimile or other electronic copy thereof.
(i) This Guaranty represents the final agreement among the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements by the parties. There are no unwritten oral agreements among the parties. This Guaranty and APA, Note, Short Term Note, and such other transaction documents contemplated by the APA, including but not limited to that certain Security Agreement dated September 18, 2024, to be effective October 1, 2024, embody the entire agreement among Borrower, Guarantor and Lender and supersede all prior proposals, agreements and understandings relating to the subject matter hereof.
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(Execution Version)
(j) GUARANTOR AND LENDER HEREBY VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN OR AMONG ANY OF THEM ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG ANY OF THEM IN CONNECTION WITH THE TRANSACTION DOCUMENTS, THIS GUARANTY, OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. THIS PROVISION SHALL NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY LENDER’S ABILITY TO PURSUE ITS REMEDIES AS SET FORTH IN THIS GUARANTY.
(k) All of the representations, warranties, covenants, and obligations hereunder, and any modification or amendment hereof, shall survive the closing and funding of the Loan Amount, shall not be deemed to have merged herein, and shall remain as continuing representations, warranties, covenants and obligations, until the date of the full performance and satisfaction, and indefeasible payment in full in cash, of all the Obligations.
(l) Counterparts. This Guaranty may be executed by .pdf, .tif, .gif or similar attachment to electronic mail, or other electronic means, shall be as effective as delivery of a manually executed counterpart of this Guaranty.
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(Execution Version)
WHEREBY, Guarantor intending to be legally bound hereby has executed this Guaranty on the date below to be effective as of the date and year first above written.
| ONFOLIO HOLDINGS, INC, a Delaware corporation | |||
| By: | |||
|
| Name: | Dominic Wells | |
| Title: | CEO | ||
| 6 |
EXHIBIT 99.1
Onfolio Holdings Inc. Acquires Eastern Standard Business
WILMINGTON, Del., October 22, 2024 (GLOBE NEWSWIRE) -- Onfolio Holdings Inc. (Nasdaq: ONFO, ONFOW) (the "Company" or "Onfolio"), a company that acquires and manages a diversified portfolio of online businesses, today announced that it has successfully completed the previously disclosed transaction to acquire the majority interest in the assets of Eastern Standard, LLC.
Eastern Standard provides clients with digital marketing services including integrated branding, and digital customer experiences. Their past client roster includes Neil de Grass Tyson, and Cornell Law, among others.
For the fiscal year ended 12/31/2023, Eastern Standard generated approximately $4,000,000 in revenue and $630,000 in unaudited adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”).
Onfolio purchased 70% of Eastern Standard for a total of $1,660,000, through the issuance of $410,000 of Series A Preferred Shares and two secured promissory notes totaling $1,250,000. The acquisition was completed without Onfolio Holdings paying any upfront cash or issuing any common shares, and the Series A Preferred Shares and secured promissory notes issued by Onfolio are not convertible into Onfolio common shares.
Onfolio's Special Purpose Vehicles "Onfolio Agency SPV LLC" and “Onfolio Agency SPV 2, LLC,” paid a combined $500,000 for a 20% interest in the Eastern Standard business.
“We continue to maintain an active pipeline of profitable companies we can acquire and expect that our Special Purpose Vehicle model, along with our non-convertible Series A Preferred Shares, will continue to play an important part of our future acquisitions,” commented Onfolio CEO Dominic Wells“.
A Form 8-K relating to the Eastern Standard transaction was filed with the Securities and Exchange Commission on October 22, 2024 and is available on the SEC’s website at www.sec.gov.
About Eastern Standard
Eastern Standard, a Philadelphia-based combined web and branding agency since 2014, was created to help clients navigate the creation of integrated branding and digital customer experiences. Using a data-first approach, Eastern Standard blends strategy, creativity, and technology to drive end-to-end brand and digital transformation. Visit www.EasternStandard.com to learn more.
About Onfolio Holdings
Onfolio acquires and manages a diversified portfolio of online businesses. Onfolio acquires business that meet its investment criteria, being that such businesses operate in sectors with long-term growth opportunities, have positive and stable cash flows, face minimal threats of technological or competitive obsolescence and can be managed by our existing team or have strong management teams largely in place. The Company excels at finding acquisition opportunities where the seller has not fully optimized their business, and Onfolio's experience and skillset allows it to add increased value to these existing businesses. Visit www.onfolio.com for more information.
Safe Harbor Statement
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "explores," "expects," "anticipates," "continues," "estimates," "projects," "intends," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing new customer offerings, changes in customer order patterns, changes in customer offering mix, continued success in technological advances and delivering technological innovations, delays due to issues with outsourced service providers, those events and factors described by us under the caption "Risk Factors" included in our SEC filings and other risks to which our Company is subject, and various other factors beyond the Company's control.
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