LOAN AGREEMENT

 

	LENDER:
	Remark Media, Inc. a Delaware corporation
	/s/ Douglas Osrow
	Douglas Osrow, Chief Financial Officer

	BORROWER:
	Bombo Sports & Entertainment, LLC, a New York limited-liability company
	/s/ Robert S. Potter
	Robert S. Potter, Manager

 

$1,000,000	Las Vegas, Nevada
	February 11, 2014

THE TRANSFER, SALE, ASSIGNMENT, HYPOTHECATION, ENCUMBRANCE, OR ALIENATION OF THIS NOTE AND ANY DOCUMENTS OR AGREEMENTS CONNECTED TO OR RELATED TO THIS NOTE ARE EACH RESTRICTED BY THE FOLLOWING DOCUMENTS ENTERED INTO BETWEEN THE UNDERSIGNED BORROWER AND PAYEE: (I) LOAN AGREEMENT; (II) MEMBERSHIP INTEREST PLEDGE AGREEMENT; AND (III) UCC FINANCING STATEMENT ALL OF EVEN DATE HEREWITH.  COPIES OF THESE DOCUMENTS ARE AVAILABLE FOR INSPECTION DURING NORMAL BUSINESS HOURS AT THE PRINCIPAL EXECUTIVE OFFICE OF THE BORROWER, 51 EAST 42ND STREET, SUITE 800, NEW YORK, NEW YORK 10017.

FOR VALUE RECEIVED, BOMBO SPORTS & ENTERTAINMENT, LLC, a New York limited liability company ("Borrower") promises to pay to REMARK MEDIA, INC., a Delaware corporation or order ("Payee") with a mailing address of 3930 Howard Hughes Parkway, Suite 400, Las Vegas, Nevada 89169 or such other address as Payee may from time to time designate in writing, the principal sum set forth hereinabove, together with interest as set forth hereinbelow.

1.           Payment.  Payment of principal and interest on this Demand Promissory Note (this "Note") shall in all events be due and payable in full on that date that is 10 days following the date Payee delivers written demand therefor to Borrower.  Upon receipt of any such demand, Borrower shall pay the entire balance of this Note to Payee on the expiration of said ten (10) day period.  Payment of principal and interest on this Note shall be made at the address of Payee, or at any other place Payee designates in writing from time to time, and shall be in lawful money of the United States of America.  If so indicated in such demand notice, payment shall be made in immediately available funds by wire transfer to a bank account of Payee designated by Payee.  Returned checks shall in no event be deemed to be payments hereunder.

2.           Interest.  Interest shall be charged and payable on the unpaid principal balance of this Note outstanding from time to time at the rate of five percent (5%) per annum.  If demand for payment is made and if such entire principal balance is not paid in full on the date due pursuant to paragraph 1 above, interest shall then be due and payable from such due date at the rate of twelve percent (12%) per annum on the outstanding principal balance hereunder until all principal and accrued and unpaid interest is paid in full.

3.           Collateral.  This Note is the “Note” as defined in that certain Loan Agreement between Payee and Borrower of even date herewith (the “Loan Agreement”) and is secured by (i) a Membership Interest Pledge Agreement (the “Pledge Agreement”) covering the membership interests of the Manager of the Borrower in the Borrower and (ii) a UCC Financing Statement to be recorded with the New York Secretary of State (the “UCC Financing Statement”) pledging in full all of the assets of the Borrower in favor of the Payee.  This Note, the Loan Agreement, the Pledge Agreement, the UCC Financing Statement, and any other documents or instruments executed by Payee and Borrower with respect to the Loan evidenced by this Note or the transactions contemplated in said Loan Agreement are part of several loan documents between Maker and Holder of even date herewith (collectively, the “Loan Documents”).  If there is a conflict between any Loan Document and this Note, the terms of such Loan Document shall govern.  At any time that Borrower is in default under this Note, without limiting or waiving any other rights or remedies, Payee shall have the right to enforce the Pledge Agreement and the Collateral Assignment against all such collateral described therein.

 

4.           Prepayment.  This Note may be prepaid at any time, in whole or in part, without premium or penalty.  All payments hereon shall be applied first to the payment of accrued interest, with the balance applied to principal.

5.           Costs of Collection.  If Borrower fails to timely make the payments required hereby, Borrower shall pay all of Payee’s costs of collection including, without limitation, attorney fees and expenses and court costs.  Such costs will be added to the balance of principal and interest then due under this Note.

6.           Failure or Delay Non-waiver.  Failure of the Payee to assert any right contained herein, or delay in asserting any such right, shall not be deemed a waiver of that right.

7.           Modifications.  This Note may not be changed, modified, amended, or terminated, nor may any of its provisions be waived, except by an agreement in writing signed by Borrower and Payee.

8.           Choice of Law; Jurisdiction.  This Note shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to its principles of conflict of laws. Any action brought to enforce the obligations herein shall be brought in a court located in Clark County, Nevada and Borrower hereby consents to the exclusive jurisdiction of such courts.

9.           Promises Binding.  This Note shall be binding upon the undersigned and the undersigned's successors, and assigns.

BORROWER:

BOMBO SPORTS & ENTERTAINMENT, LLC,

a New York limited liability company

Robert S. Potter, Manager

This Membership Interest Pledge Agreement (this “Agreement”) is made and entered into as of February 11, 2014 by and between ROBERT S. POTTER, a resident of the State of New York (the “Pledgor”) for the benefit of REMARK MEDIA, INC., a Delaware corporation (“Secured Party”).

 

 

 

A.        Secured Party and Bombo Sports & Entertainment, LLC, a New York limited liability company (“Borrower”) are parties to that certain Loan Agreement (the “Loan Agreement”) of even date herewith.  Capitalized terms not otherwise defined herein shall have the same meaning as ascribed to such terms in the Loan Agreement.

 

B.         As a material inducement for Secured Party to enter into the Loan Agreement, Pledgor, as the Manager of the Borrower in order to secure Borrower’s obligations contained in the Loan Agreement including, without limitation, Borrower’s obligations to perform under the Demand Promissory Note (the “Promissory Note” and, together with the Loan Agreement and all other documents referred to in the Loan Agreement, the “Loan Documents”) by pledging in favor of Secured Party, Pledgor’s eighty-six percent (86%) limited liability company membership interest in and to the Borrower (the “Pledged Interest”).

 

 

In consideration of the foregoing, the mutual covenants contained herein and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.         Pledge.  As security and collateral for the payment when and as due and payable of any and all of Borrower’s obligations under the Loan Documents (the “Obligations”), Pledgor pledges, hypothecates, and grants to Secured Party a continuing, first priority security interest in, and assigns to Secured Party all right, title and interest in and to:

 

(a)           the Pledged Interest and any certificates representing the Pledged Interest and any interest of Pledgor in the entries on the books of any financial intermediary pertaining to the Pledged Interest, and all distributions, return of capital, redemptions, dividends, cash, warrants, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Interest;

 

(b)           all additional interest in, and all securities convertible into and warrants, options and other rights to purchase or otherwise acquire an interest in any issues of the Pledged Interest from time to time acquired by Pledgor in any manner (which interest shall be deemed to be part of the Pledged Interest), the certificates or other instruments representing such additional interest, if any, securities, warrants, options or other rights and any interest of Pledgor in the entries on the books of any financial intermediary pertaining to such additional interest, and all dividends, cash, warrants, rights, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such additional interest, securities, warrants, options or other rights; and

 

 

(c)           to the extent not covered by clauses (a) through (b) above, all proceeds of any or all of the foregoing collateral.  For purposes of this Agreement, the term “proceeds” includes whatever is receivable or received when the collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes, without limitation, proceeds of any indemnity or guaranty payable to Pledgor or Secured Party from time to time with respect to any of the collateral.

 

2.         Voting.  Unless an Event of Default (as defined below) shall have occurred and be continuing, Pledgor shall be entitled to vote its interest in the Pledged Interest and to give consents, waivers and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken which would violate or not comply with any of the terms and provisions of this Agreement or which would cause Borrower to be in default under any of the Loan Documents.  Pledgor represents and warrants that it has received a copy of all of the Loan Documents to which Borrower is a party and that it is familiar with the covenants, representations, and warranties of Borrower under the Loan Documents.  All such rights of Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default shall occur and be continuing.  If an Event of Default shall have occurred and be continuing, Pledgor grants to Secured Party an irrevocable proxy coupled with an interest in the Pledged Interest, pursuant to which proxy, Secured Party shall be entitled to vote or consent in its discretion and in such event Pledgor agrees to deliver to Secured Party such further evidence of such proxy as Secured Party may reasonably request.

 

3.          Distributions.  Unless an Event of Default shall have occurred and be continuing, all distributions payable in respect of the Pledged Interest shall be paid to Pledgor.

 

4.         Title to Pledged Interest.  Pledgor hereby represents, warrants and covenants to Secured Party that (i) it has good and marketable title to the Pledged Interest, free and clear of any and all liens, claims, security interests and encumbrances other than in favor of Secured Party pursuant to this Agreement, (ii) the Pledged Interest represents eighty-six percent (86%) the issued and outstanding membership interests in Borrower, (iii) there are no other equity or ownership interests in Borrower other than the Pledged Interest and no other person or party has any right (whether by option, subscription agreement, or otherwise) to acquire any membership or other equity interest in Borrower, (iv) the Pledged Interest is “certificated” and represented by Certificate No. 1 issued by Borrower (the “Certificate”), which Certificate Pledgor has delivered to Secured Party concurrently herewith with appropriate powers and/or assignment duly executed by Pledgor and/or Borrower to be held by Secured Party subject to the terms hereof, (v) the security interest granted to Secured Party hereunder is and at all times shall be and remain a first priority lien and security interest in the Pledged Interest and Pledgor has not granted any other lien or security interest to any other person or party in or to, or otherwise encumbered the Pledged Interest; and (vi) during the term of this Agreement, Pledgor shall not hereafter directly or indirectly sell, transfer, assign, or otherwise dispose of or grant any option with respect to, the Pledged Interest, nor shall Pledgor create, incur or permit and further pledge, hypothecation, or encumbrance of, or grant any other lien or security interest in or to, the Pledged Interest.  Pledgor hereby consents to Secured Party filing any Uniform Commercial Code financing statement with respect to the security interest granted hereunder.

 

 

 

5.         Events of Default.  For purposes of this Agreement, the terms “Default” and “Event of Default” shall mean any Event of Default as defined in the Loan Agreement, including, without limitation, the happening of any of the following events:

 

(a)           any failure of Borrower to perform or fulfill in full any of the obligations or conditions contained in the Loan Agreement or any of the other documents or agreements referenced therein; or

 

(b)           any failure of Pledgor to observe or perform any of the other provisions of this Agreement if such failure continues for a period of ten (10) days after written notice of such default is received by the Pledgor; or

 

(c)           if the Pledgor or Borrower becomes insolvent or is the subject of a petition in bankruptcy, either voluntary or involuntary, or in any other proceeding under the Federal Bankruptcy Laws or makes an assignment for the benefit of creditors or is subject to a proceeding for reorganization, arrangement, readjustment of debt, dissolution or liquidation or if Pledgor or Vegas Holdings is named in a suit for the appointment of a receiver; or

 

       (d)           If Pledgor voluntarily or involuntarily dissolves its limited liability company.

 

6.         Remedies Upon Default.  In case an Event of Default shall have occurred and be continuing, Secured Party shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement or by law or otherwise (including, without limitation, those of a secured party under the Uniform Commercial Code) for the protection and enforcement of its rights in respect of the Pledged Interest, and Secured Party shall be entitled, without limitation:

 

(a)           to receive all amounts payable in respect of the Pledged Interest otherwise payable under Paragraph 3 of this Agreement to Pledgor;

 

(b)           to transfer and register all or any part of the Pledged Interest into Secured Party's name or the name of its nominee or nominees;

 

(c)           to vote all or any part of the Pledged Interest (whether or not transferred or registered into the name of Secured Party) and give all consents, waivers and ratification’s in respect thereof and otherwise act with respect to the Pledged Interest as though it were the outright owner thereof pursuant to the proxy granted in Paragraph 2 of this Agreement hereof, including, without limitation, to replace the Manager of Borrower pursuant to Borrower’s Operating Agreement;

 

 

(d)           at any time and without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Pledgor (all and each of which demands, advertisements and/or notices are hereby expressly waived to the extent permitted by law), to proceed forthwith to collect, redeem, receive, appropriate, sell, or otherwise dispose of and deliver the Pledged Interest or any part thereof at public or private sale or sales at Secured Party’’s office or elsewhere at such prices and on such terms as Secured Party may deem best.  The foregoing disposition(s) may be for cash or on credit, with Secured Party having the right to purchase all or any part of the Pledged Interest so sold at any such sale or sales, public or private, free of any right or equity of redemption in Pledgor, which right or equity is hereby expressly waived or released by Pledgor.  Pledgor agrees that ten (10) days prior notice by Secured Party sent by certified mail, postage prepaid, designating the date after which a private sale may take place or a public auction may be held, is reasonable notification of such matters.

 

7.         Remedies, Cumulative.  Each right, power and remedy of Secured Party provided for in this Agreement or in the Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy.  The exercise or beginning of the exercise by Secured Party of any one or more of the rights, powers or remedies provided for in this Agreement or in the Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Secured Party of all such other rights, powers or remedies, and no failure or delay on the part of Secured Party to exercise any such right, power or remedy shall operate as a waiver thereof.

 

8.         Application of Money by Secured Party.  All money collected upon any sale or sales of the Pledged Interest hereunder, together with all other monies received by Secured Party hereunder, shall be applied to the payment of all reasonable costs and expenses incurred or paid by Secured Party in connection with any sale, transfer or delivery of the Pledged Interest or the collection of any such money (including reasonable attorneys' fees and expenses), and the balance of such money shall be held by Secured Party and applied by it at any time or from time to time to the payment of the Obligations and in such order and manner as Secured Party in its reasonable discretion may determine.

 

 

9.         Further Assurances.  Pledgor at its expense will execute, acknowledge and deliver all such instruments and take all such action as the Secured Party may reasonably request in order to further effectuate the purposes of this Agreement and to carry out the terms hereof.

 

10.       Termination and Release.  Upon the payment in full of the Obligations in accordance with the terms of the Loan Documents, and the payment of all other sums payable (including, without limitation, the reasonable expenses and disbursements of Secured Party) this Agreement shall terminate and Secured Party, at the request and expense of Pledgor, will promptly execute and deliver to Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to Pledgor such of the Pledged Interest as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any monies at the time held by Secured Party hereunder and together with the Certificate or such new certificate issued by Borrower then evidencing such part of the Pledged Interest held by Secured Party at such time.

 

11.       Notices.  All notices, requests, demands or other communications to or upon the parties hereto shall be in writing, shall be given or made to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Agreement at the following addresses:

If to the Secured Party:

3930 Howard Hughes Parkway, Suite 400

Las Vegas, Nevada 89169

Attention:  Douglas Osrow

If to Pledgor:

c/o Bombo Sports & Entertainment, LLC

51 East 42nd Street, Suite 800

New York, New York 10017

or at such other address as either party hereto may hereafter specify to the other in writing, and (unless otherwise specified herein) shall be deemed to have been duly given (i) when delivered personally; (ii) three (3) days after being sent by a nationally recognized overnight courier; or (iii) five (5) days after mailing, and all mailed notices shall be by certified or registered mail, return receipt requested, postage prepaid.

 

12.        Miscellaneous.  This Agreement 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.  The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. The representations, covenants and agreements of Pledgor herein contained shall survive the date hereof. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and may be executed in two or more counterparts. The terms and conditions of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any party.  The parties acknowledge that each of them has reviewed this Agreement and has had the opportunity to have it reviewed by their attorneys and that any rule or construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Agreement, including amendments or any exhibits. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada.

 

 

IN WITNESS WHEREOF, the parties hereto have duly authorized, executed and delivered this Agreement effective as of the date hereof.

	PLEDGOR:
	Robert S. Potter, Personally

Confirmation of Borrower:

The undersigned Borrower confirms that the forgoing Membership Interest Pledge Agreement does not violate any provisions of the Operating Agreement of Borrower, that all consents of Borrower and its Manager required under such Operating Agreement have been obtained in connection therewith, if applicable, that the Pledged Interest represents an 86% membership interest in Borrower and has been dully issued to Pledgor, and that the Pledged Interest is evidenced by the Certificate described herein.  The undersigned further acknowledges that Secured Party shall have the right to rely on this confirmation for all purposes.

Bombo Sports & Entertainment, LLC,
a New York limited liability company
By:
Its: