ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On
June 13, 2023, the Company (the “Buyer”) and TXC Services, LLC (the “Seller”) (together, the
“Parties”) entered into a Membership Interest Purchase Agreement (the “MIPA”) for the purchase of
all 2,500,000 issued and outstanding Membership Units (the “Membership Units”) of Fox Trot Tango, LLC (“FTT”), a Delaware limited liability company.
The purchase price for the purchase of all Membership
Units shall be $6,500,000 payable from the Buyer to the Seller as follows:
(a) Buyer’s assumption
of a certain promissory note in favor of TK Management Services, Inc. (“TXC”), in the principal amount of $1,500,000 dated
January 6, 2022 (“TK Secured Note”) secured by the Property as collateral, pursuant to a certain Deed to Secure Debt, Assignment
of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing (“TK Security Deed”) and other liabilities;
and
(b) The issuance of a Convertible
secured promissory note, in the principal amount of $1,600,000, in favor of Seller (“Seller Secured Note”) and Securities
Purchase Agreement (“Seller SPA”), secured by the Property as collateral, pursuant to a certain Deed to Secure Debt, Assignment
of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing, subordinate to the TK Security Deed (“Seller Security
Deed”); and
(c) The issuance of Six
Hundred and Eighty (680) shares of the Buyer’s Series L Preferred Stock (“Series L Preferred”) valued at $3,400,000.
In
the event that the Buyer is in default under the MIPA, the TK Secured Note, the TK Security Deed, the Seller Secured Note, Seller SPA,
the Seller Security Deed or Buyer fails to issue to Seller duly authorized the Series L Preferred, the Seller shall have the right to
receive a return of the Membership Units without recourse by the Buyer. This right is in accordance with the pledge agreement, the assignment,
amended operating agreement, and related documents (collectively the “Pledge Agreement”).
At
Closing, the Parties shall enter into the following schedules: (i) Seller Secured Note, (ii) Seller SPA, (iii) Seller Security Deed,
(iv) resolutions related to the issuance of the Series L Preferred, (v) Pledge Agreement, (vi) Assignment of Units Agreement, (vii) Unanimous
Consent of the FTT’s authorized Member/Manager, (viii) Unanimous Consent of the Seller’s authorized Member/Manager, (ix)
Unanimous Consent of the Buyer’s board of directors, and (x) Third Amended and Restated Limited Liability Company Agreement of
FTT. The Closing will take place electronically within 60 days of the satisfaction of the conditions set forth in Articles 7 and 8 of
the MIPA.
