SDCO 8-K
SDR Drone, Inc. (SDCO)
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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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).
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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. ☐
| ITEM 1.01 | ENTRY INTO MATERIAL DEFINITIVE AGREEMENT |
On October 9, 2024, Hallmark Venture Group, Inc. (the “Company”) authorized the issuance of up to $500,000 in non-convertible promissory notes. The notes, when issued, will bear interest at a rate of 12% per month and will be due and payable six months after issuance. Purchasers of the notes will also be issued a common stock purchase warrant (each a “Warrant”). The warrant shall be exercisable at a price of $2.00 per share and shall expire two years after the issuance date. Also on October 9, 2024, the Company issued a $50,000 promissory note and a warrant to purchase 1,250 shares of Company common stock.
On October 31, 2024, the “Company and Creative Venture Capital LTD (“CVC”) entered into an Agreement for the Supply of Introductory Services & Financing Partners (the “CVC Agreement”) whereby CVC agreed to introduce the Company to prospective clients and business partners. In exchange for said services, CVC will receive 5% of all revenue generated by the Company as a direct result of introductions made under the CVC Agreement.
A copy of the aforementioned documents which are filed as Exhibits hereto and incorporated by reference in this Current Report on Form 8-K.
| ITEM 5.02 | ELECTION OF DIRECTORS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS |
On October 31, 2024, Nicholas Cardosi was nominated and appointed as a Director of the Company. Nick Cardosi has spent over 12 years building and managing high-impact partnerships in search engine marketing and programmatic advertising. Throughout his career, he has held pivotal roles at Carbon DMP and Clicksco, where he was instrumental in establishing and nurturing relationships with industry giants like Yahoo, Microsoft, and Google. As Partnerships Manager at Clicksco, Nick drove significant growth by strategically aligning partnerships and securing long-term alliances with major players in the digital space.
Building on this success, Nick launched his consulting business, NDC Solutions, where he leverages his extensive network to broker valuable client partnerships. These alliances open new revenue streams and innovative solutions to complex digital challenges. His vast connections and hands-on approach make him a trusted expert known for forging partnerships that drive substantial opportunities and sustainable growth in digital advertising. Nick is also a principal of CVC.
On October 23, 2024, the Company entered into an Executive Compensation Agreement (“Agreement”) with its President and CEO, Evan Bloomberg. The Agreement has a term of 24 months and entitles Mr. Bloomberg to (i) $1,000,000 in shares of Company common stock; (ii) $340,000 in annual salary; and (iii) a tiered performance bonus based on quarterly revenues.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
EXHIBIT INDEX
| Exhibit Number | Description | |
| 10.01 | Form of Promissory Note & Warrant Agreement | |
| 10.02 | Form of Promissory Note | |
| 10.03 | Form of Warrant | |
| 10.04 | CVC Agreement | |
| 10.05 | Executive Compensation Agreement | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 5, 2024
Hallmark Venture Group, Inc.
| By: | /s/ Evan Bloomberg | |
| Name: | Evan Bloomberg | |
| Title: | Chief Executive Officer |
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Exhibit 10.1
PROMISSORY NOTE
AND WARRANT PURCHASE AGREEMENT
THIS PROMISSORY NOTE AND WARRANT PURCHASE AGREEMENT is made as of October____, 2024, by and among ____________________(the “Investor”) and Hallmark Venture Group, Inc. (the “Company” or “HLLK”).
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Notes.
1.1 Purchase and Sale of Note. Subject to the terms and conditions of this Agreement and pursuant to the promissory note in the form attached hereto as Exhibit A (each a “Note”), the Investor agrees to purchase at the Closing and the Company agrees to sell and issue to the Investor at the Closing, a Note in the principal amount of XXX THOUSAND DOLLARS AND 00/100 ($XXX,000) (the “Investment”). The Note bears interest at a rate of Twelve (12) Percent per month, which interest shall also be payable monthly, and matures Six (6) Months after the date first appearing above.
1.2 Purchase and Sale of Warrant. Subject to the terms and conditions of this Agreement, the Investor agrees to purchase and the Company agrees to sell and issue to the Investor at the Closing, a warrant in the form attached hereto as Exhibit B (the “Warrant”) to purchase shares of a series of the Company’s Common Stock. For every Forty dollars ($40) invested in a Note pursuant to Section 1.1 above, Investor shall receive a Warrant to purchase One (1) additional share of Company Common Stock at an exercise price of $2.00 per share. The Warrant also includes a cashless exercise feature. The Warrants will be exercisable on any date from and including the two-year anniversary of the date of this Agreement through the two-year anniversary thereof.
1.3 Closing.
(a) The purchase and sale of the Note(s) and Warrants shall take place at the offices of Investor at 10:00 A.M. between October___, 2024, or at such other time and place as the Company and the Investor may determine (the “Closing”).
(b) At the Closing, the Company shall deliver to the Investor a Note representing the principal amount as is prescribed in Section 1.1 above and the Investor shall cause to be delivered to the Company a wire transfer to the Company’s order in the aggregate amount of the principal amount of the Investment as is prescribed in Section 1.1 above.
2. Representations, Warranties, and Covenants of the Company. The Company hereby represents and warrants to the Investor that:
2.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to carry on its business as now conducted and proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.
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2.2 Authorization. All corporate actions on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder and the authorization, issuance and delivery of the Note and the Warrants have been taken or will be taken prior to the Closing. This Agreement constitutes, and the Note and the Warrants when executed and delivered in accordance with their terms will constitute, valid and legally binding obligations of the Company, enforceable in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies and (iii) as limited by applicable usury laws.
2.3 Compliance with Other Instruments. The Company is not in violation or default of any provisions of its Articles of Incorporation, as amended (the “Articles”), or Bylaws (the “Bylaws”), or, except as set forth on Schedule 1 hereof, in any material respect of any provision of a mortgage, indenture, agreement, instrument or contract to which it is a party or by which it is bound or of any federal or state judgment order, writ or decree, or, to its knowledge, of any statute, rule or regulation applicable to the Company. The execution, delivery and performance by the Company of this Agreement, and the consummation of the transactions contemplated hereby, including the issuance and delivery of the Note and the Warrants, will not result in any such violation or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Company, its business or operations, or any of its assets or properties.
2.4 Governmental Consents. Based in part upon the representations and warranties of the Investor in Section 3, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the, Company is required in connection with the consummation of the transactions contemplated by this Agreement, except such post-closing filings as may be required under applicable federal and state securities laws, which will be timely filed within the applicable period thereof.
2.5 Sufficient Authorized Shares. The number of authorized but unissued shares of the Company’s Common Stock will be sufficient to permit the exercise of the Warrants. From the date hereof, the Company shall at all times maintain a sufficient quantity of authorized but unissued shares of Common Stock sufficient to permit the exercise of the Warrants. In the event the Company, for any reason, no longer has a sufficient number of authorized but unissued shares to comply with this Section 2.5, it shall use its best efforts to promptly authorize such shares. Upon the issuance of shares of Common Stock pursuant to the exercise of the Warrants, such shares of Common Stock shall be duly and validly issued, fully paid and nonassessable, and issued in compliance with all applicable securities laws, as then in effect, of the United States and each of the states whose securities laws govern the issuance of the Warrants pursuant to this Agreement and shall not be issued in violation of any preemptive or similar right.
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2.6 No Brokers. No broker or finder has acted directly or indirectly for the Company in connection with the transactions contemplated by this Agreement, and no broker or finder is entitled to any brokerage, finder’s or other fee or commission in respect thereof based in any way on agreements, arrangements or understandings made by or on behalf of the Company and the Investor or the transactions contemplated hereby.
2.7 Minute Books. The Company has made available to the Investor (and will continue to make available up to the Closing) copies of the minute books of the Company. The minute books contains records of all written actions and meetings of the Board of Directors and there have been no written actions or meetings of the Board of Directors since the date of the last meeting in the minute books.
3. Representations and Warranties of the Investor. The Investor represents and warrants severally and not jointly, with respect to the Investor, that:
3.1 Authorization. The Investor has full capacity, power and authority to enter into and perform this Agreement, and all actions necessary to authorize the execution, delivery and performance of this Agreement have been taken prior to the Closing. This Agreement constitutes a valid and legally binding obligation of the Investor, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, moratorium, and other laws of general application affecting the enforcement of creditors’ rights generally.
3.2 Receipt of Information. The Investor believes it, he or she has received all the information necessary or appropriate for deciding whether to acquire the Securities. The Investor further represents that the Investor has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities.
3.3 Investment Experience. The Investor is an investor in securities of companies in the development stage and acknowledges that the Investor is able to fend for itself, herself or himself, can bear the economic risk of its, his or her investment and has such knowledge and experience in financial or business matters that the Investor is capable of evaluating the merits and risks of the investment in the Securities. If other than an individual, the Investor also represents it has not been organized for the purpose of acquiring the Securities. The Investor further represents that the information provided on Investor’s counterpart signature page is true and accurate.
3.4 Restricted Securities. The Investor understands that the Securities are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act of 1933, as amended (the “Securities Act”) only in certain limited circumstances. In connection therewith, each lender represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
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3.5 Accredited Investor Status. The Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). The Investor has such knowledge, sophistication, and experience in financial and business matters that it is capable of evaluating the merits and risks associated with making the Investment. The Investor has had the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain additional information necessary to verify the accuracy of the information provided to the Investor. The Investor is acquiring the Securities solely for its own account, for investment purposes only, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act or any applicable state securities laws.
3.6 Legends. To the extent applicable, each certificate or other document evidencing any of the Securities shall be endorsed with the legend set forth below, and the Investor covenants that, except to the extent such restrictions are waived by the Company, the Investor shall not transfer the Securities represented by any such certificate without complying with the restrictions on transfer described in the legends endorsed on such certificate:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”
4. Conditions of Investor’s Obligations. The obligations of the Investor hereunder are subject to the fulfillment on or before the Closing of each of the following conditions:
4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing.
4.2 Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.
4.3 Board Actions. The Company shall have delivered to the Investor resolutions duly adopted by the Company’s Board of Directors and, to the extent required by applicable law or by the Company’s Articles of Incorporation, the Company’s Shareholders, and certified by the Secretary of the Company (i) approving and authorizing the Company’s execution and delivery of this Agreement, the Notes and the Warrants, and the Company’s performance thereunder, and (ii) authorizing the reservation of a sufficient number of shares of the Company’s Common Stock to permit the conversion of the Notes and to permit the exercise of the Warrants.
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5. Conditions of the Company’s Obligations. The obligations of the Company with respect to the Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 3 and on the Investor’s signature page shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing.
5.2 Delivery of Principal. The Investor shall have delivered the principal amount of the Investor’s Investment as is prescribed in Section 1.1.
6. Post-Closing Covenant of Company. During such times as any Note is outstanding, the Company, upon receipt of written request by the Investor, shall provide the Investor with an update of the Company’s actual and forecasted cash position and of any reasonably significant development related to the Company or its business. Such updates shall be transmitted to the Investor via facsimile or via e-mail, at a facsimile number or e-mail address provided by the Investor, no later than noon pacific time each Monday during which such obligation remains in effect.
7. Reimbursement for Legal Fees.
None.
8. Events of Default.
Upon the occurrence of any of the following specified events (each an “Event of Default”), unless such Event of Default shall have been waived or cured prior to the exercise of the remedies set forth below:
8.1 Payments. Any default by the Company in the payment when due of any principal and unpaid accrued interest under any Note if such default is not cured by the Company within ten (10) days after the holder of such Note has given the Company written notice of such default;
8.2 Representations and Warranties. Any representation or warranty made by the Company herein shall prove to have been incorrect in any material respect on or as of the date made and remains unremedied for a period of thirty (30) days after any Investor provides the Company with written notice of such breach;
8.3 Post Closing Covenants. The failure of Company to satisfy any of the post-closing covenants set forth in Section 6 hereof within the time-periods set forth therein.
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8.4 Institution of Bankruptcy Proceedings. The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it or the filing by it of a petition or answer or consent seeking reorganization or release under the federal Bankruptcy Act, or any other applicable federal or state law, or the consent by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee, trustee, or other similar official, of the Company, or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the taking of corporate action by the Company in furtherance of any such action; or
8.5 Continuation of Bankruptcy Proceedings. If, within thirty (30) days after the commencement of an action against the Company (and service of process in connection therewith on the Company) seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting the operations or the business of the Company stayed, or if the stay of any such order or proceeding shall thereafter be set aside, or if, within thirty (30) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated;
Then, and in any such event, and at any time thereafter, if any events shall be continuing, the Investor shall have the option to declare the principal amount of the Notes, and all accrued but unpaid interest thereon, to be immediately due and payable upon written notice to the Company.
9. Miscellaneous.
9.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
9.2 Governing Law; Venue. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without regard to its conflict of law principles. Any legal action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in Clark County, Nevada, and each party hereby consents to the exclusive jurisdiction of such courts and waives any objection to the laying of venue of any such action or proceeding in such courts, including any objection based on improper venue or forum non conveniens.
9.3 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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9.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
9.5 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given upon personal delivery to the party to be notified or four (4) days after deposit with the United States Post Office, by registered or certified mail, postage prepaid and addressed to the party to be notified at the address indicated for such party on the signature page hereof, or at such other address as such party may designate by advance written notice to the other parties.
9.6 Finder’s Fee. Each party represents that it neither is nor will be obligated for any finders’ fee or commission in connection with this transaction.
9.7 Entire Agreement. This Agreement and the other documents delivered pursuant hereto constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein.
9.8 Amendment and Waiver. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Investor. This provision shall not affect the amendment and waiver provisions of the Note. Any waiver or amendment effected in accordance with this section shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.
9.9 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
9.10 Survival. The representations, warranties, covenants and agreements made herein shall survive the Closing for a period of 12 months.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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[Signature Page to Promissory Note and Warrant Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
| Hallmark Venture Group, Inc. | ||
| By: | Evan Bloomberg | |
| Title: | CEO | |
| Investor | ||
| By: | ||
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EXHIBIT A
PROMISSORY NOTE
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EXHIBIT B
WARRANT
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Exhibit 10.2
ON DEMAND PROMISSORY NOTE
| $x00,000.00 | Las Vegas, NV | October XX, 2024 | ||
| Amount | City, State | Date |
FOR VALUE RECEIVED, the Undersigned, hereinafter referred to as the “Debtor”, acknowledges that it is indebted to [Investor] (the “Lender”) in the amount stated herein and promises to pay, on demand, the principal sum of xx Thousand dollars ($x00,000.00) together with interest thereon from the date hereof to maturity at an interest rate of 12% per month, which interest shall be paid monthly by the Debtor to the Lender.
The principal amount of this Note is due on demand Six (6) Months from the date hereof. All installments, prepayments, and other payments of principal and interest are payable to Lender at [________], or at such other place as the Lender or Debtor may hereafter and from time to time designate in writing.
This Note may be prepaid, in whole or in part, without penalty at any time. At maturity, or upon demand or default or failure to pay any installment of principal and interest required herein, the entire balance shall be immediately due and payable. Any remedy of Lender or Debtor upon default of the Debtor shall be cumulative and not exclusive and choice of remedy shall be at the sole election of Lender. The Debtor agrees to pay all costs of collection, including reasonable attorney's fees, whether or not any suit, civil action, or other proceeding at law or in equity, is commenced. The Debtor waives demand, presentment for payment, protest and notice of protest and nonpayment of this Note and expressly agrees to remain bound for the payment of principal, interest and other sums provided for by the terms of this Note, notwithstanding any extension or extensions of the time of, or for the payment of, said principal. No delay or omission on the part of the Lender or holder in exercising any rights shall operate as a waiver of such right. This Note shall be governed by the laws of the State of Nevada, and each party hereto agrees to venue and jurisdiction in the federal and state courts located in Clark County, Nevada.
This Note may be assigned, in whole or in part, at the sole discretion of the Lender and does not require approval of the Debtor to approve such assignment.
[Signatures on Following Page]
[Signature Page to Demand Promissory Note]
| Executed on_______________ [Date] | |
| UNDERSIGNED: | |
| Hallmark Venture Group, Inc. | |
| ____________________________ |
| By: | Evan Bloomberg | |
| Its: | President & CEO | |
| EIN/TIN#: 34-2001531 | ||
| Funding: | ||
Exhibit 10.3
EXHIBIT B
WARRANT TO PURCHASE STOCK
Company: Hallmark Venture Group, Inc.
Number of Shares: XXX
Class of Stock: Common
Initial Exercise Price Per Share: $2.00
Issue Date: October__, 2024
Expiry Date: October ___,2026
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $2.00 and for other good and valuable consideration, INVESTOR (“Holder”) is entitled to purchase the number of fully paid and nonassessable shares of the class of securities (the “Shares”) of Hallmark Venture Group, Inc. (the “Company” or “HLLK”) at the initial exercise price per Share ( the “Warrant Price”) all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth of this Warrant.
ARTICLE 1. EXERCISE
1.1 Method of Exercise. Holder may exercise this Warrant by delivering a duly executed Notice of Exercise is substantially the form attached as Appendix 1 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holders shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 [Reserved].
1.3 No Rights Shareholder. This Warrant does not entitle Holder to any voting rights as a shareholder of the company prior to the exercise hereof.
1.4 Fair Market Value. For purposes of Section 1.2, if the Shares are traded in a public market, the fair market value of the Shares shall be the closing price of the Shares (or the closing price of the Company’s stock into which the Shares are convertible) reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not traded in a public market, the Board of Directors of the Company shall determine fair market value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking or public accounting firm to undertake such valuation. If the valuation of such investment banking firm is greater than that determined by the Board of Directors, then all fees and expenses of such investment banking firm shall be paid by the company. In all other circumstances, such fees and expenses shall be paid by Holder.
1.5 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this Warrant has not been fully exercised or converted and has not been fully exercised or converted and has not expired, a new Warrant representing the Shares not so acquired.
1.6 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor.
1.7 Repurchase on Sale, Merger, or Consolidation of the Company
1.7.1 “Acquisition” For the purpose of this Warrant, “Acquisition” means (a) the closing of the sale, transfer or other disposition of all or substantially all of the HLLK’s assets, (b) the consummation of the merger or consolidation of HLLK with or into another entity (except a merger or consolidation in which the holders of capital stock of HLLK immediately prior to such merger or consolidation continue to hold at least fifty percent (50%) of the voting power of the capital stock of HLLK or the surviving or acquiring entity), or any transaction or series of transactions to which HLLK is a party in which in excess of fifty percent (50%) of HLLK’s voting power is transferred, or (c) the exclusive license of all or substantially all of the intellectual property of HLLK to a third party.
1.7.2 Assumption of Warrant. Upon the closing of any Acquisition the successor entity shall assume the obligations of this Warrant, and this Warrant shall be exercisable for the same securities, cash, and property as would be payable for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on the record date for the Acquisition and subsequent closing. The Warrant Price shall be adjusted accordingly.
1.7.3 Purchase Right. Notwithstanding the foregoing, at the election of Holder, the Company shall purchase the unexercised portion of this Warrant for cash upon the closing of any Acquisition for an amount equal to (a) the fair market value of any consideration that would have been received by Holder in consideration of the Shares had Holder exercised the unexercised portion of this Warrant immediately before the record date for determining the shareholders entitled to participate in the proceeds of the Acquisition, less (b) the aggregate Warrant Price of the Shares, but in no event less than zero.
1.8 Expiry. Notwithstanding the foregoing, the Warrant shall expire on the Second Anniversary of this Warrant.
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Splits, Subdivisions, and Combinations. If the Company at any time after the issuance of this Warrant subdivides (by any stock split, stock dividend, recapitalization, or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision shall be proportionally reduced. Conversely, if the Company combines (by reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionally increased.
2.2 Issuances Below Exercise Price. If the Company, at any time while this Warrant is outstanding, issues or sells any shares of Common Stock or securities convertible into or exercisable for shares of Common Stock at a price per share lower than the then-current Exercise Price, the Exercise Price shall not be adjusted, unless such issuance is part of a stock split or subdivision as outlined above. This provision shall not apply to Exempt Issuances, which include (i) shares issued pursuant to employee stock plans, (ii) shares issued as part of strategic partnerships, or (iii) shares issued pursuant to this Warrant.
2.3 No Adjustment for Issuances at Market Price. No adjustment shall be made to the Exercise Price for issuances of Common Stock or other securities at or above the market price of the Common Stock as of the date of such issuance.
2.4 No Dilutive Protection for Future Offerings. The Holder acknowledges that this Warrant does not include anti-dilution protection for future equity offerings, except as set forth in this Section. The Company may issue additional shares of Common Stock or other securities without triggering adjustments to the Exercise Price, except in the case of stock splits, subdivisions, or combinations as provided herein.
2.5 No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or through a reorganization, transfer of assets, consolidation, merger, dissolution, issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Warrant by the Company, but shall at all times in good faith assist in carrying out of all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder’s rights under this Article against impairment. If the Company takes any action affecting the Shares or its common stock other than as described above that adversely affects Holder’s rights under this Warrant, the Warrant Price shall be adjusted downward and the number of Shares issuable upon exercise of this Warrant shall be adjusted upward in such a manner that the aggregate Warrant price of this Warrant is unchanged.
2.6 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional share interest arises upon any exercise or conversion of the Warrant, the Company shall eliminate such fractional share interest by paying Holder amount computed by multiplying the fractional interest by the fair market value of a full Share.
2.7 Notice of Adjustments. Whenever the Exercise Price is adjusted pursuant to the terms of this Warrant, the Company shall promptly provide the Holder with a written notice detailing the adjustment and the facts supporting the basis for such adjustment.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and warrants to the Holder that all Shares which may be issued upon the exercise of the purchase right represented by this Warrant and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws.
3.2 Notice of Certain Events. If the company proposes at any time (a) to declare any dividend or distribution upon its common stock, whether in cash, property, stock or other securities and whether or not a regular cash dividend; (b) to offer for subscription pro rata to the holders of any class or series or other rights; (c) to effect any reclassification or recapitalization of common stock; (d) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; or (e) offer holders of registration rights the opportunity to participate in an underwritten public offering of the company’s securities for cash, then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution or subscription rights (and specifying the date on which the holders of common stock will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (c) and (d) above; 2 in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of common stock will be entitled to exchange their common stock for securities or other property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant and /or any of the Shares, the Company shall deliver to the Holder (a) promptly after mailing, copies of all notices or other written communications to the shareholders of the Company, (b) within ninety (90) days after the end of each fiscal year of the Company, the annual financial statements of the Company.
3.4 Registration Under Securities Act of 1933, as amended. The Company agrees that the Shares shall be subject to the registration rights granted to any other holders of the Company’s common stock.
ARTICLE 4. MISCELLANEOUS.
4.1 Term. This Warrant is exercisable, in whole or in part, at any time and from time to time on or before the second anniversary of the Issue Date hereof and up to and including the second anniversary of the Issue Date.
4.2 Legends. This Warrant and the Shares (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) shall be imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise this Warrant (and the securities issuable , directly or indirectly, upon conversion of the shares, if any) may not be transferred or assigned in whole or in part without compliance with limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonable requested by the Company).
4.4 Transfer Procedure. Subject to the provisions of Section 4.2, Holder may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the securities issuable, directly or indirectly, upon conversion of the Shares, if any) by giving the Company notice of the portion of the Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the company for reissuance to the transferee(s) (and Holder if applicable).
4.5 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such holder from time to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.
4.7 Attorneys Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorney’s fees.
4.8 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada, without giving effect to its principles regarding conflicts of law.
| By: Evan Bloomberg | |
| Title: President & CEO |
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to convert the attached Warrant into in the manner specified in the Warrant. This conversion is exercised with respect to _______________________ of the Shares covered by the Warrant.
2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:
______________________________________
(Name)
________________________________________
________________________________________
(Address)
3. The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.
| (Date) | (Signature) |
Exhibit 10.4
(1) Creative Venture Capital LTD
and
(2) Jubilee Intel, LLC
AGREEMENT FOR THE SUPPLY OF INTRODUCTORY SERVICES & FINANCING PARTNERS
|
BETWEEN:
| (1) | Creative Venture Capital LTD, a company incorporated in the UK whose registered office is at 6 Barling Road, Southend on Sea, Essex, UK (“Introducer”); and |
| (3) | Jubilee Intel, LLC, a company organised in the US in the State of Nevada (“Company”). |
BACKGROUND
| A. | The Company requires the provision of certain Introductory Services, whereby the Introducer is appointed to act as an intermediary in introducing Prospective clients and distributing finances to partners. |
| B. | The Introducer has agreed to provide such Introductory Services on the terms and conditions set out in this Agreement. |
IT IS HEREBY AGREED as follows:
| 1. | DEFINITIONS AND INTERPRETATION |
| 1.1 | In this Agreement (unless the context otherwise requires), the following words and phrases shall have the following meanings: |
“Affiliates” means the Company, any Subsidiary or Holding Company from time to time of the Company, and any Subsidiary from time to time of a Holding Company of the Company. Holding Company and Subsidiary shall have the meaning set out in the Companies Act 2006.
“Agreement” means this agreement and any document referred to, completed or to be completed in accordance with its provisions.
“Commencement Date” means the date of this Agreement.
“Commercial Transaction” means any contract in writing which has been entered into by the Company and a Prospective Client during the Term for the provision of the Monetization Partner via the Company (or for such other monetisation services which the Company is entitled to syndicate) to the Prospective Client.
“Data Protection Laws” means the General Data Protection Regulation (Regulation EU 2016/679) (GDPR”) and any national implementing laws, regulations and secondary legislation, as amended or updated from time to time, in the UK and any successor legislation to the GDPR or the Data Protection Act 2018.
“Data Protection Requirements” means all applicable laws and regulations relating to the processing of personal data and privacy, including where applicable, the guidance and codes of practice issued by the regulatory authorities in any jurisdiction.
“Force Majeure Event” means any circumstance beyond the reasonable control of the parties including, but not limited to acts of God, fire, explosion, adverse weather conditions, flood, earthquake, terrorism, riot, civil commotion, war, hostilities, strikes, work stoppages, slow-downs or other industrial disputes, accidents, riots or civil disturbances, acts of government, lack of power and delays by suppliers or materials shortages.
“Intellectual Property” includes patents, inventions, know-how, trade secrets and other confidential information, registered designs, copyrights, database rights, design rights, rights affording equivalent protection to copyright, database rights and design rights, trademarks, service marks, logos, domain names, business names, trade names, moral rights, and all registrations or applications to register any of the aforesaid items, rights in the nature of any of the aforesaid items in any country or jurisdiction, rights in the nature of unfair competition rights and rights to sue for passing-off.
“Introductory Services” means the services to be supplied by the Introducer to the Company in accordance with the terms of this Agreement.
“Introductory Fee” as defined in clause 5.
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“Prospective Clients” means potential commercial partners provided by the Introducer to the Company in writing with whom the Company has not had a commercial relationship in the 12 months immediately preceding the introduction.
“Working Day” means any day from Monday to Friday (inclusive) which is not Christmas Day, Good Friday or a statutory holiday in the United Kingdom.
| 1.2 | In this Agreement (unless the context otherwise requires): |
| 1.2.1 | the words “including” and “include” and words of similar effect shall not be deemed to limit the general effect of the words which precede them; |
| 1.2.2 | a document “in agreed form” is a reference to a document in a form approved and for identification purposes signed by or on behalf of each party which is to enter such document; |
| 1.2.3 | reference to any agreement, contract, document or deed shall be construed as a reference to it as varied, supplemented or novated; |
| 1.2.4 | obligations undertaken by a party which comprises more than one person shall be deemed to be made by them jointly and severally; |
| 1.2.5 | words importing persons shall include firms, companies and bodies corporate and vice versa; words importing the singular shall include the plural and vice versa; words importing any one gender shall include either gender; |
| 1.2.6 | construction of this Agreement shall ignore the headings, contents list and front sheet (all of which are for reference only); |
| 1.2.7 | references to a numbered clause, schedule, paragraph are references to the clause, schedule, paragraph of or to this Agreement so numbered; and |
| 1.2.8 | any reference to any legislative provision shall be deemed to include any subsequent re-enactment or amending provision. |
| 2. | SUPPLY OF INTRODUCTORY SERVICES |
| 2.1 | The Introducer shall provide Introductory Services to the Company and the Company agrees to pay the Introductory Fee(s) to the Introducer for the Introductory Services in accordance with the terms and conditions of this Agreement. |
| 2.2 | The Introducer shall provide the Introductory Services to the Company with all the skill, care and diligence that would be expected from a supplier of similar or identical services providing such services to a reasonable standard. |
| 3. | TERM |
| 3.1 | This Agreement shall come into force on the Commencement Date and shall continue in force for a period of until terminated of this Agreement in accordance with the provisions of clause 8. |
| 4. | INTRODUCER’S OBLIGATIONS |
| 4.1 | The Introducer shall carry out such activities as the Company shall reasonably require in order to attract and introduce Prospective Clients to the Company. |
| 4.2 | The Introducer shall use its reasonable efforts to introduce the maximum number of suitable Prospective Clients for the Company. |
| 5. | INTRODUCTORY FEES |
| 5.1 | If whilst this Agreement is in force, a Commercial Transaction is concluded in writing, between the Company or its Affiliates and a Prospective Client, the Company agrees that the Introducer shall be paid the specified Commercial Transaction Compensation as set out in clause 5.1.2 below. For purposes of this section, “Commercial Transaction Compensation” shall be defined as: |
| 5.1.2 | Where the Commercial Transaction directly generates revenues to the Company or its Affiliates, the Company, shall pay to the Introducer a sum based off Schedule 1 (“Introducer Percentage’) of the revenue actually received by the Company from Monetisation Partner (“Company Revenue”): |
| 3 |
| 5.2. | The Company shall send to the Introducer, a written statement setting out the calculation of the Commercial Transaction Compensation payable to the Introducer, the Company Revenue received by the Company or its Affiliates and details of any sums due, which have not been received, as soon as practicable following the end of each month during the Compensation Period. |
| 5.3 | Following notification by the Company under clause 5.2, the Introducer shall submit an invoice for the services provided to the Company by the Introducer under this Agreement specifying the account details into which payment is to be made. |
| 5.4 | The Company shall pay each invoice for undisputed amounts properly due and submitted to it in accordance with this Agreement by the Introducer within 15 days of receipt of the invoice or within 5 days of receipt of the Company Revenue, whichever is the later. |
| 5.5 | The Company shall not be responsible for any costs or expenses incurred by the Introducer in the performance of its obligations under this agreement. |
| 5.6 | Should any of the Revenue received or due to be received by the Company be the subject of any further withholding, clawbacks or refunds due to the monetisation partner, the payments due to the Introducer shall be adjusted accordingly and any overpayments made to the Introducer may be set off against any other sums due to it or be payable on demand. |
| 5.7 | For the avoidance of doubt, the Company shall not be under an obligation to enter a Commercial Transaction with a party introduced by the Introducer. |
| 5.8 | The Introducer acknowledges that the Company may be required by applicable law or regulation to disclose to any Approved Introduced Commercial Partner the existence, nature and amount of the fees payable by the Company to the Introducer under the Agreement and the Introducer hereby consents to any such disclosure by the Company. |
| 6. | DATA PROTECTION |
| 6.1 | The parties acknowledge that for the purposes of the Data Protection Requirements and this Agreement, the transferring party shall be the Data Controller of the Personal Data in relation to the period before and after it has been transferred to the other party. After the Personal Data has been transferred to the other party, the that other party shall also have control of the Personal Data and shall also be an independent Data Controller in relation to that Personal Data. |
| 6.2 | Both parties warrant that they have and will have at all times during the continuance of this Agreement appropriate technical and organisational measures in place to protect any personal data accessed or processed by them against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data held or processed by the and that the Introducer has taken all reasonable steps to ensure the reliability of any of their staff which will have access to personal data processed as part of this Agreement; |
| 6.3 | The Introducer party shall ensure that the Data Subject consents to the transfer of their personal data by the Company’s (and any Group Company’s) outside the European Economic Area or to any Group Company outside of the European Economic Area for administrative purposes. |
| 6.4 | Both parties warrant and undertake that in performing their obligations under this Agreement and/or arising from the existence of this Agreement they will comply with all applicable Data Protection Requirements. |
| 7. | LIABILITY |
| 7.1 | Nothing in this Agreement shall operate to exclude or restrict liability for death or personal injury resulting from negligence or fraud. |
| 7.2 | Subject to clause 7.1, and to the maximum extent permitted by law, neither party shall be liable to the other for any loss of income, loss of profits, loss of goodwill, loss of operation time, loss of data, loss of any anticipated savings, loss of contracts, loss of any benefit or for any indirect or consequential loss or damage whether arising from negligence, breach of contract or howsoever arising. |
| 7.3 | The express terms of this Agreement are in lieu of either party’s warranties, conditions, terms, undertakings and obligations implied by statute, common law, custom, trade usage, course of dealing or otherwise, including any condition of satisfactory quality or fitness for a particular purpose whether or not any purpose has been notified to either party, all of which are hereby excluded to the fullest extent permitted by law. |
| 4 |
| 8. | CONFIDENTIALITY |
| 8.1 | “Confidential Information” means all confidential information disclosed (whether in writing, orally or by another means and whether directly or indirectly) by either party (the “Disclosing Party”) to the other party (the “Receiving Party”) whether before or after the date of this Agreement including, but not limited to, information relating to the Disclosing Party’s products, operations, processes, plans or intentions, product information, know-how, design rights, trade secrets, market opportunities and business affairs. |
| 8.2 | During the term of this Agreement and after termination or expiry of this Agreement for any reason the Receiving Party: |
| 8.2.1 | shall not use Confidential Information for a purpose other than the performance of its obligations under this Agreement; |
| 8.2.2 | shall not disclose Confidential Information to any person except with the prior written consent of the Disclosing Party; |
| 8.2.3 | shall make every effort to prevent the use or disclosure of Confidential Information; |
| 8.2.4 | may disclose Confidential Information to any of its directors, other officers, employees, sub-contractors and customers (a “Recipient”) to the extent that disclosure is reasonably necessary for the purposes of this Agreement; |
| 8.2.5 | shall ensure that such Recipient is made aware of and complies with the Receiving Party’s obligations of confidentiality under this Agreement as if the Recipient was a party to this Agreement. |
| 8.2.6 | The provisions of Section 8.2 do not apply to Confidential Information which: |
| (i) | is at the Commencement Date or becomes at any time after that date publicly known other than by the Receiving Party’s or Recipient’s breach of this Agreement; |
| (ii) | can be shown by the Receiving Party to the Disclosing Party’s reasonable satisfaction to have been known by the Receiving Party before disclosure by the Disclosing Party to the Receiving Party; |
| (iii) | is or becomes available to the Receiving Party otherwise than pursuant to this Agreement and free of any restrictions as to its use or disclosure; or |
| (iv) | is required to be disclosed by law. |
| 8.3 | The provisions of Section 8 shall survive and continue to apply following the termination of this Agreement. |
| 9. | FORCE MAJEURE |
| 9.1 | If a party (the “Affected Party”) is prevented, hindered or delayed from or in performing any of its obligations under this Agreement by a Force Majeure Event: |
| 9.1.1 | the Affected Party’s obligations under this Agreement are suspended while the Force Majeure Event continues and to the extent that it is prevented, hindered or delayed; as soon as reasonably possible after the start of the Force Majeure Event, the Affected Party shall notify the other party (the “Non-Affected Party”) in writing of the Force Majeure Event, the date on which the Force Majeure Event started and the effects of the Force Majeure Event on its ability to perform its obligations under this Agreement; |
| 9.1.2 | the Affected Party shall make all reasonable efforts to mitigate the effects of the Force Majeure Event on the performance of its obligations under this Agreement; and as soon as reasonably possible after the end of the Force Majeure Event, the Affected Party shall notify the other party in writing that the Force Majeure Event has ended and resume performance of its obligations under this Agreement. |
| 9.2 | If the Force Majeure Event continues for more than one month starting on the day the Force Majeure Event starts, the Non-Affected Party may terminate this Agreement by giving not less than 7 days’ notice in writing to the Affected Party. |
| 5 |
| 10. | NOTICES. Any notice given by one party to the other under this Agreement must be in writing and may be delivered personally or by pre-paid first-class post and in the case of post will be deemed to have been given 2 Working Days after the date of posting. Notices shall be delivered or sent to the addresses of the parties on the first page of this Agreement or to any other address notified in writing by one party to the other for the purpose of receiving notices after the date of this Agreement. Each party may specify by notice to the other a particular individual or office holder to whom any notices served on it are to be addressed, in which case a notice shall not be validly given unless so addressed. |
| 11. | ANNOUNCEMENTS. Neither party shall make or permit any person connected with it to make any announcement concerning this supply and purchase of Introductory Services or any ancillary matter on or after the date of this Agreement except as required by law or any competent regulatory body or with the written approval of the other party, such approval not to be unreasonably withheld or delayed. |
| 12. | FURTHER ASSURANCE. Either party shall at the request and cost of the other use all reasonable endeavours to do or procure the doing of all such further acts and execute or procure the execution (as a deed or otherwise) of all such documents as may from time to time be necessary to give full effect to this Agreement. |
| 13. | SEVERENCE |
| 13.1 | If any provision of this Agreement is found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this Agreement which shall remain in full force and effect. |
| 13.2 | If any provision of this Agreement is so found to be invalid or unenforceable but would cease to be invalid or unenforceable if a part of the provision was deleted, the provision in question shall apply with such modification as may be necessary to make it valid and enforceable. |
| 14. | THIRD PARTIES. A person who is not party to this Agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement save that the Company’s Affiliates shall have the benefit of (and the right to enforce) all the provisions of this agreement. This clause does not affect any right or remedy of any person which exists or is available otherwise than pursuant to that Act. |
| 15. | COSTS. Each party shall bear its own costs and expenses incurred in relation to the negotiation, preparation, execution and implementation of this Agreement and all other documents to be completed in accordance with its provisions. |
| 16. | NO PARTNERSHIP OR AGENCY. Nothing in this Agreement is intended to create a partnership or joint venture or legal relationship of any kind that would impose liability upon one party for the act or failure to act of the other party between the parties, or to authorise either party to act as agent for the other. Save where expressly stated in this Agreement, neither party shall have authority to make representations, act in the name or on behalf of or otherwise to bind the other. |
| 17. | WAIVER AND CUMULATIVE REMEDIES |
| 17.1 | The rights and remedies provided by this Agreement may be waived only in writing and specifically, and any failure to exercise or any delay in exercising a right or remedy by either party shall not constitute a waiver of that right or remedy or of any other rights or remedies. A waiver of any breach of any of the terms of this Agreement or of a default under this Agreement shall not constitute a waiver of any other breach or default and shall not affect the other terms of this Agreement. |
| 17.2 | The rights and remedies provided by this Agreement are cumulative and (unless otherwise provided in this Agreement) are not exclusive of any rights or remedies provided at law or in equity. |
| 18. | ENTIRE AGREEMENT |
| 18.1 | This Agreement contains all the terms agreed between the parties regarding its subject matter and supersedes any prior agreement, understanding or arrangement between the parties, whether oral or in writing. Each of the parties acknowledges and agrees that: |
| 18.1.1 | in entering into this Agreement it has not relied on, and shall have no remedy in respect of, any statement, representation, warranty or understanding other than the statements, representations, warranties and understandings expressly set out in this Agreement; and |
| 18.1.2 | its only remedies in connection with any statements, representations, warranties and understandings expressly set out in this Agreement shall be for breach of contract as provided in this Agreement. |
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| 19. | CONTINUING OBLIGATIONS. THE TERMINATION OF THIS AGREEMENT (FOR WHATEVER REASON) SHALL NOT TERMINATE ANY PROVISION WHICH IS EXPRESSLY OR BY IMPLICATION PROVIDED TO COME INTO OR CONTINUE IN FORCE AFTER SUCH TERMINATION AND SHALL BE WITHOUT PREJUDICE TO THE ACCRUED RIGHTS AND LIABILITIES AND OTHER REMEDIES OF THE PARTIES TO THIS AGREEMENT. |
| 20. | GOVERNING LAW AND JURISDICTION |
| 20.1 | This Agreement and any matter arising from or in connection with it shall be governed by and construed in accordance with English law. |
| 20.2 | Each party irrevocably agrees to submit to the non-exclusive jurisdiction of the English courts over any claim or matter arising from or in connection with this Agreement or the legal relationships established by or in connection with this Agreement. |
SIGNED by
for and on behalf of
Creative Venture Capital LTD
|
) ) )
Director |
SIGNED by
for and on behalf of Jubilee Intel, LLC
|
) ) )
Director |
Schedule 1
FEE OF SERVICES
- 5% of Revenue on introduced Partner generated traffic
- Introducer controls the finances on behalf of Company in order for all parties to be paid.
| 7 |
Exhibit 10.5
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (this “Agreement”) is made effective this 23rd day of October, 2024 (the “Effective Date”), between Evan Bloomberg (“Executive”), and Hallmark Venture Group, Inc., a Florida corporation (“HLLK” or the “Company”) each a “Party” and collectively the “Parties”.
WHEREAS, HLLK wishes to retain Executive as its President and Chief Executive Officer and to perform the responsibilities commensurate with and related to these positions (the “Services”).
WHEREAS, HLLK has a wholly owned subsidiary, Jubilee Intel, LLC (“Jubilee”) that Executive will also manage and hold the title of President of that subsidiary.
WHEREAS, Executive will perform the Services for HLLK with full power and authority thereof, that will include, but not be limited to; (i) General Management, (ii) legal representative, (iii) administration, (iv) hiring of Third Party Service Providers, (v) providing financing support, (vi) providing investment support, (vii) provide capital markets advisory services, (viii) service as a designee, assignee, Director, and/or Officer of HLLK (collectively, the “Management Services”).
WHEREAS, Executive has the staff, expertise and capability to perform under the terms of this Agreement and the Management Services for the Company.
WHEREAS, Executive may also own a majority or minority stake in the Company, and be a Holder of Majority Control of the Company either through the ownership of securities with certain rights or privileges or through contractual agreements, through one or more entities controlled by Executive.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements contained in this Agreement and other good and valuable consideration not recited in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
| 1. | Incorporation of Recitals. The recitals set forth above are hereby incorporated into and made a part of this Agreement as if fully set forth herein. |
| 2. | Term of Agreement. The Term of this Agreement shall commence upon the signing date and end 24 months after that date (the “Term”). This Agreement shall automatically renew for successive one-year periods unless either party provides written notice of their intention to terminate or not renew this Agreement at least 60 days prior to the expiration of the then-current term. |
| 3. | Management Services. The Executive agrees that it will generally provide the following specified services through its officers and employees during the Term specified; |
| 1 |
| a. | Consult and assist HLLK in the Services by executing, or causing to execute the requisite agreements, filings, subscriptions to ensure success in the Services. |
| b. | Manage all agreed upon activities and Services for HLLK including, but not limited to: reviewing business plans, strategies, budgets, proposed transactions, facilitating audits, accounting or legal work, and other Services for the purpose of advancing the success of HLLK and any and all other Management Services as required. |
| c. | Conduct requisite administrative work for HLLK. |
| d. | Retain other service providers on behalf of HLLK to successfully complete the Management Services as needed. |
| 3. | Allocation of Time and Energies. The Executive hereby promises to devote its full-time effort to perform and discharge faithfully the responsibilities assigned herein. |
| 4. | Management Fees. For undertaking this engagement and for other good and valuable consideration, the HLLK will pay to the Executive Management Fees as follows: |
| a. | Executive shall be paid $340,000 per twelve (12) month period (the “Cash Management Fee”) for the Management Services commencing upon execution of this Agreement. |
| b. | Performance Bonus: Executive shall be entitled to a quarterly performance bonus based on the revenues of Jubilee in accordance with the following tiered schedule (“Performance Bonus”): |
| i. | $0 - $5,000,000 in Quarterly Revenue: 1.0% of the quarterly revenue. |
| ii. | $5,000,001 - $10,000,000 in Quarterly Revenue: 1.5% of the quarterly revenue. |
| iii. | $10,000,001 - $15,000,000 in Quarterly Revenue: 2.0% of the quarterly revenue. |
| iv. | +$15,000,001 in Quarterly Revenue: 2.5% of the quarterly revenue. |
| c. | Executive will also be paid $1,000,000 in shares of Company stock. Such Stock-for-Services shall be valued at the average closing price of the Company Stock on the effective date of this Agreement, minus a fifty percent (50%) discount. |
| d. | Any Stock received by Executive pursuant to the terms of this Agreement may not be sold by Executive for six (6) months from the date of such Stock’s issuance and shall be subject to limitations on resale as set forth in Rule 144. |
| e. | At Executive’s discretion, and in lieu of receiving any cash fees included herein (collectively, the “Cash-based Compensation”), Executive may elect to convert any of the Cash-based Compensation that is either; (i) past due, (ii) to be paid in the future, (iii) any combination thereof, into one or more convertible promissory notes. |
| 2 |
| i. | Any amounts due to Executive that remain unpaid, for a period of not less than 90-days, may be converted, at the option of the Executive, into common stock of the Company at a conversion rate equal to a 75% discount from the lowest 30-day trailing bid prior to conversion by the Executive. |
| f. | A $50,000 Early Termination Fee shall be due and payable to Executive, subject to the provisions of Section 6 below, upon Termination by the Company. |
| g. | The Management Fee shall be fully paid and nonassessable and constitute payment for Executive’s agreement to provide Management Services and is non-refundable, non-apportionable, and non-ratable; such shares of stock mentioned herein are not a pre-payment for future services. If Company decides to terminate this Agreement prior to the Term for any reason whatsoever, it is agreed and understood that the Executive will not be requested or demanded by Company to return any of the shares issued hereunder. It is understood that the Management Fee shares contemplated herein pursuant to this Agreement shall be in the name of _________. The shares contemplated by this agreement are to be issued by the Transfer Agent as follows: |
Address:
EIN:
Wire Transfer Details:
Bank Name:
Account Name:
Routing #:
Account #:
| k. | Notwithstanding anything to the contrary set forth in this Agreement, in the event of a “Change of Control” of the Company, Executive shall be entitled to receive (prior to the close of any such Change of Control) any remaining Stock-based compensation to which Executive would have been entitled (i) for the full value of the Services that Executive would have provided to Company hereunder during the full Term of this Agreement absent such Change of Control. In addition to the foregoing, in the event of a Change of Control of Company, Executive shall be entitled to receive and exercise (prior to the close of any such Change of Control) any and all corresponding warrants to which it is entitled with respect to this Agreement. For purposes of this Section 4(k), a “Change in Control” shall mean; (a) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (b) the consummation of the merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of Company immediately prior to such merger or consolidation continue to hold at least fifty percent (50%) of the voting power of the capital stock of Company or the surviving or acquiring entity), or any transaction or series of transactions to which Company is a party in which in excess of fifty percent (50%) of Company’s voting power is transferred, or (c) the exclusive license of all or substantially all of the intellectual property of Company to a third party. |
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| 5. | Indemnification. HLLK warrants and represents that all oral communications, written documents or materials furnished to Executive by HLLK and with respect to financial affairs, operations, profitability and strategic planning are accurate and Executive may rely upon the accuracy thereof without independent investigation. HLLK will protect, indemnify and hold harmless Executive against any claims or litigation including any damages, liability, cost and reasonable attorney’s fees as incurred with respect thereto resulting from Executive’s communication or dissemination of any said information, documents or materials excluding any such claims or litigation resulting from Executive’s communication or dissemination of information not provided or authorized by HLLK. |
| 6. | Termination: This Agreement may be terminated prior to the Term, for any reason, by Executive or HLLK. Notwithstanding this Agreement being Terminated prior to the full Term hereof, the Indemnification in Section 5 of this Agreement, and exhibits thereof, shall remain in effect, and any unpaid fees or expenses in Section 4 shall still be due to Executive, including, but not limited to the Early Termination Fee. |
| 7. | Representations. Executive represents that, other than the licenses and accreditations it already possesses, it is not required to maintain any licenses and registrations under federal or any state regulations necessary to perform the services set forth herein. Executive acknowledges that, to the best of its knowledge, the performance of the services set forth under this Agreement will not violate any rule or provision of any regulatory agency having jurisdiction over Executive. Executive further acknowledges that it is not a securities Broker Dealer or a registered investment advisor. |
| 8. | Legal Representation. HLLK acknowledges that it has been represented by independent legal counsel in the preparation of this Agreement. Executive represents that it has consulted with independent legal counsel and/ or its financial and business advisors, to the extent the Executive deemed necessary. |
| 9. | Attorney’s Fee. If any legal action or any arbitration or other proceeding is brought for the enforcement or interpretation of this Agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with or related to this Agreement, the successful or prevailing Party shall be entitled to recover reasonable attorneys’ fees and other costs in connection with that action or proceeding, in addition to any other relief to which it or they may be entitled. |
| 10. | Waiver. The waiver by either Party of a breach of any provision of this Agreement by the other Party shall not operate or be construed as a waiver of any subsequent breach by such other Party. |
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| 11. | Notices. All notices, requests, and other communications hereunder shall be deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the other Party at the address as set forth herein below: |
To the Executive:
To the Company:
HLLK, Inc.
| 13. | Miscellaneous: This Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and supersedes and cancels any prior communication, understandings and agreements between the Parties. This Agreement cannot be modified or changed, nor can any of its provisions be waived, except by written agreement signed by all Parties. It is understood that either Party may change the address to which notices for it shall be addressed by providing notice of such change to the other Party in the manner set forth in this paragraph. |
| 14. | Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Nevada, UNITED STATES. The Parties agree that the Superior Court for the State of Nevada will be the venue of any dispute and will have jurisdiction over all Parties. |
| 15. | Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the alleged breach thereof or relating to Executive’s activities or remuneration under this Agreement, shall be settled by binding arbitration in Nevada in accordance with the applicable rules of the American Arbitration Association, judgment on the award rendered by the arbitrator(s) shall be binding on the Parties and may be entered into any court having jurisdiction as provided by Paragraph 14 herein. The provisions and successor statutes permitting expanded discovery proceedings shall be applicable to all disputes that are arbitrated under this paragraph. |
| 16. | Complete Agreement. This Agreement contains the entire agreement of the Parties relating to the subject matter hereof. This Agreement and its terms may not be changed orally but only by an agreement in writing signed by the Party against whom enforcement of any waiver, change, modification, extension or discharge is sought. |
[signatures on following page]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
| AGREED TO: | ||
| “Executive” | ||
| By: | ||
| “Company” Hallmark Venture Group, Inc. | ||
| By: | ||
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