Preview
FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024
EXHIBIT 2
FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024
AGREEMENT NO. EAM-BEYOND/0409-2022/PHASE vFinal
AGREEMENT NO. EAM-BEYOND/0409-2022/PHASE C
PROJECT
BEYOND GROWTH FUND
This Agreement (“Agreement”), dated January 19, 2023, is between ETHOS ASSET
MANAGEMENT, INC., a corporation, incorporated under the laws of California, having its
principal place of business at 4660 La Jolla Village Drive, San Diego, California, 92122, USA, herein
represented by MR. CARLOS MANUEL DA SILVA SANTOS (“EAM”, “Lender” or “Party
A”), and BEYOND LIMITS, INC., having its principal place of business at 450 N. Brand Blvd,
Glendale CA 91203 represented by Frank Sansone (“Beyond” or “Party B”), and collectively with
EAM, each a “Party”).
EAM and Beyond are herein referred to individually as a “Party” and collectively as the
“Parties.”
Background
This Agreement codifies the desire between the Parties to enter into this financing agreement
pursuant to which EAM shall provide financing to Beyond to further develop the Project, as specified
herein.
EAM warrants and commits to provide Party B with the full principal amount of $225,000,000,
to be funded to Party B in the following Phases: Phase A at $10,000,000, Phase B at $25,000,000,
Phase C at $50,000,000, Phase D at $60,000,000, and Phase E at $80,000,000 (collectively, the
“Phases” and each, individually, a “Phase”).
Beyond warrants and commits to put in place and activate the following collaterals for each
Phase that is funded: for Phase A, 25% of financing (corresponding to $2,500,000); for Phase B, 25%
of financing (corresponding to $6,250,000); for Phase C, 20% of financing (corresponding to
$10,000,000); for Phase D, 20% of financing (corresponding to $12,000,000); and for Phase E, 20%
of financing (corresponding to $16,000,000). For the avoidance of doubt, Beyond shall not be
obligated, for any reason, to put in place or activate collateral for any Phase that is not funded.
The principal of the financing applicable to each Phase shall accrue interest annually at an
annual fixed interest rate of 1.5%.
For the avoidance of doubt, this Agreement only gives specific effect to Phase C for a
financing amount of $50,000,000 (the “Funds”).
Accordingly, in consideration of the mutual covenants herein contained, the Parties hereto,
intending to be legally bound hereby, agree as follows:
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Article 1 Definitions
Terms defined in the preamble and the recitals of this Agreement have their assigned
meanings, and the following terms have the meanings assigned to them:
1.1 “Closing” means the consummation of the transactions that this Agreement
contemplates. The consummation of said transactions (the “Closing”) shall take place as soon as
reasonably possible after all conditions precedent to the Closing set forth in Section 3.5, Section 3.6,
and Article VI have been satisfied or waived in writing by the Parties. The Closing shall take place at
the offices of ETHOS ASSET MANAGEMENT, INC., at 4660 La Jolla Village Drive, San Diego,
California, 92122, USA, at 10:00 a.m. local time, or at such other time, date and place as may be agreed
in writing by the Parties.
1.2 “Closing Date” means the due date of the last installment payment described in
Exhibit D.
1.3 “Effective Date” means January 19, 2023.
1.4 “Pledge Agreement” means the pledge undertaking to be entered into by and
between the Bank (as hereinafter defined) and Beyond in accordance with Exhibit C.
1.5 “Project” means the project described in Exhibit E.
Article 2 Project
2.1 Formation and Purpose. The Parties agree to join efforts in this venture in
accordance with the terms of this Agreement for the purpose of developing Phase C of the Project.
2.2 Engagement in other activities. Beyond shall exclusively use the Funds towards the
Project, including general business or corporate activities in furtherance of such Project.
2.3 No Liability. The debts, obligations and liabilities of Beyond, other than those set
forth in this Agreement (whether arising in contract, tort or otherwise) in connection with the Project,
shall be solely the debts, obligations and liabilities of Beyond and neither EAM nor its members shall
be obligated in its financial capacity for any such debt, obligation or liability (other than as set forth in
this Agreement) solely by reason of being a Party to this Agreement.
2.4 Status and Expenditure Compliance. The parties agree that Beyond shall provide
to EAM quarterly updates on the status of the Project and such supporting documents and records
related to such project, subject to any confidentiality concerns, attorney-client privilege or instances
where Beyond reasonably determines there may be a conflict of interest.
Article 3 Funds, Collateral and Payment
3.1 Funds. Party A warrants and commits to provide Party B with the full principal
amount of $225,000,000, which shall be funded to Party B in the following Phases:
Phase A Project of $10,000,000;
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Phase B Project of $25,000,000;
Phase C Project of $50,000,000;
Phase D Project of $60,000,000
Phase E Project of $80,000,000
The Parties acknowledge and agree that this Agreement gives specific effect to Phase C
only, under which Party A warrants and commits to provide Party B with the partial principal
amount of $50,000,000 (Fifty Million US Dollars).
The Parties agree that all the terms of this Agreement, including the interest rate, shall be identically
replicated for each Phase, except as otherwise provided herein. The Parties further agree that this
commitment shall cease to exist if either of the Parties defaults in terms of Article 7.
3.2 Securities Regulation Exempt. The Parties acknowledge that the transaction
involved in this Agreement shall not be interpreted as a sale of securities pursuant to the Securities
Act of 1933 or by the Security Exchange Act of 1934 of the United States of America.
3.3 Collateral.
In consideration for the funds provided by Party A or its nominee as established in
Section 3.1, Party B shall pledge funds per each phase as below:
for Phase A 25% of financing corresponding to $2,500,000;
for Phase B 25% of financing corresponding to $6,250,000;
for Phase C 20% of financing corresponding to $10,000,000;
for Phase D 20% of financing corresponding to $12,000,000;
for Phase E 20% of financing corresponding to $16,000,000.
The Parties acknowledge and agree that this Agreement specifically establishes the
terms and conditions for Phase C, under which Party B shall deposit and maintain funds in
the Pledge Account (as hereinafter defined) in an amount of $10,000,000 (the “Pledged
Funds”). For the avoidance of doubt, the pledged amounts ascribed to each Phase in this
Section 3.3 shall correspond only to such amounts that are, or are currently expected to be,
pledged under such Phase.
The Pledged Funds will be established under the following rules
(i) Pledged Funds shall be reduced each successive year to equal 20% of the
outstanding principal.
(ii) The Pledged Funds shall be deposited into a pledge account (the “Pledge
Account”) with the bank set forth on Exhibit C (the “Bank”) to secure
Beyond’s obligation to make repayment of the Funds pursuant to the terms of
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this Agreement as set forth in the Pledge and Assignment Agreement attached
hereto as Exhibit C (the “Pledge Agreement”).
(iii) EAM and Beyond shall enter into the Pledge Agreement, pursuant to which
EAM will have certain rights to draw funds from the Pledge Account upon a
default by Beyond under the terms of this Agreement.
(iv) Beyond shall cause Collateral Agent to purchase the securities in the manner
stipulated in the Pledge Agreement Section 3(a) and create the agreed-upon
margin.
(v) Beyond shall pass the agreed percentage of the margin value to EAM within 3
working days of margin being established by transferring the margin value to
a Beyond operating account and then passing to EAM’s designated bank.
(vi) Party A shall place the margin value in an account specifically designated to
hold margins prior to or simultaneous with the first disbursement of funds in
accordance with Exhibit D. Party A shall provide weekly statements of the
account to Party B to verify the margin value is remaining in the account. At
any time during the period of which the extensions of credit are outstanding,
Party B may demand a statement of account from Party A in which Party A
has one banking day to produce such statement. Once Party B has received
the first disbursement of the Funds from Party A, Party A’s obligation under
this clause 3.3(vi) will be terminated.
(vii) The Pledged Funds shall be maintained in the Pledge Account until the date
that all Funds are repaid pursuant to Section 3.4(i) and Exhibit D, (the
“Expiration Date”) and serve as security for the repayment of the Funds
described in Section 3.4 and under the conditions described in Exhibit D.
(viii) The balance required to be maintained in the Pledge Account shall be
decreased each year of the Term (as hereinafter defined) that the Funds remain
outstanding, beginning on the fourth anniversary date of this Agreement and
lasting until the date all Funds are completely repaid to Party B and are no
longer subject to any claim from Party A. Beginning on the fourth anniversary
date of this Agreement and continuing on each anniversary date of this
Agreement thereafter, Party B shall be entitled to withdraw a cash amount of
Pledged Funds, no part of which shall be subject to unresolved good faith
claims made by Party A for an alleged Event of Default (as hereinafter defined)
by Party B (“Pledged Fund Claims”), from the Pledge Account equal to the
amount of principal paid to Party A in repayment of Funds.
(ix) Both Parties shall provide written instructions as necessary to the Bank to
release the Pledged Funds in an amount that equals the amount of principal
repaid by Party B to Party A in the previous year and any amounts for previous
years for which Party B may have elected, for any reason, not to withdraw
from the Pledge Account, minus any Pledged Fund Claims. As soon as each
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Pledged Fund Claim is resolved to the mutual satisfaction of the Parties, the
Parties shall deliver written instruction to the Bank that the amount being held
in the Pledge Account on account of a Pledged Fund Claim has been resolved
by the Parties and direct the Bank to deliver such Pledged Funds immediately
to Party B. When the balance of Funds remaining in the Pledge Account
equals or exceeds the remaining amount of Funds to be repaid by Party B to
Party A, the Parties agree that Party B shall have the right to credit the Pledged
Funds remaining that are not subject to any Pledged Fund Claims to reduce
the amount of the Funds required to be repaid to Party A, including the full
repayment of the Funds to Party A.
(x) IN NO EVENT SHALL EITHER PARTY HAVE ANY RIGHTS TO THE
PLEDGED FUNDS, EXCEPT AS SPECIFICALLY PROVIDED IN THE
PLEDGE AGREEMENT UNDER THE TERMS OF DEFAULT
DESCRIBED IN SECTION 7.1 HEREOF.
3.4 Repayment.
(i) Beyond shall repay EAM the full amount of funds provided by EAM, paying
off the financing mentioned in this Agreement on time, in full, in compliance
with all the obligations accepted by Beyond, and in accordance with the
General Repayment Data, in each case as set forth on Exhibit D and described
in Section 3.7.
(ii) Cancellation upon Repayment. With the exception of the cancellation
criteria described in Article 7, the Pledge Agreement shall be cancelled upon
full Repayment in accordance with Section 3.4(i) and 3.8.
3.5 Condition for Funds. EAM will provide funds for the Project if Beyond issues the
agreed Pledge Agreement and if such Pledge Agreement is signed, delivered, and verified and held in
accordance with the instructions provided by the Parties and under the terms stated in Section 3.4 and
Article 4.
3.6 Funds Disbursement Schedule. In accordance with the terms and provisions set
forth herein, EAM will provide funds for the Project as stated in Section 3.1 in the form of installments
to Beyond with a maturity period of 12-years, subject to the grace period set forth on Exhibit D (the
“Disbursement Schedule”). The Disbursement Schedule includes the pre-approval of the
conditions for the disbursement of funds, approved and signed by the Parties as established in Exhibit
D of this Agreement.
3.7 Repayment period. In accordance with the terms of this Agreement, Beyond shall
complete repayment of the full amount of funds plus simple interest in a period of 12-years from the
Disbursement Date. Disbursement Date means the date of the first completed disbursement of the
of the Funds or any portion of it and shall be interpreted as of the date in which Beyond receives the
respective amount in its bank account or at a designated bank.
3.8 Prepayment. Funds received and accrued interest may be prepaid under the following
conditions.
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(i) No consent required for prepayment in full with a notice of prepayment 90
days prior.
(ii) Consent for any partial prepayment provided that such prepayment shall be
accompanied by notice and such consent shall not be unreasonably withheld.
(iii) All outstanding interest is paid. Calculated from the date of the prepayment
event to the maturity date of the financing.
3.9 Indemnification by each Party. Each Party agrees to indemnify and hold harmless
the other against any losses, claims, damages or liabilities, joint or several, to which EAM may become
subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement of a material fact by such Party
in relation to this Agreement, (ii) any breach by Beyond of any of its representations, warranties or
covenants contained herein, or (iii) the omission by such Party in relation to this Agreement to state
a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and will reimburse such EAM for any
legal or other expenses reasonably incurred by such Party in connection with investigating or
defending any such loss, claim, damage, liability or action, whether arising out of an action between
such Party and a third party provided that such loss, claim, damage or liability is found ultimately to
arise out of or be based upon any of the facts set forth in items (i) through (iii) in this Section 3.9.
3.10 Taxes, Duties and Fees. Each Party, individually and separately, will be responsible
for any tax or fee that may arise from this Agreement in connection with the development of the
Project.
(i) Origination Fee. EAM assesses a 3% origination fee for all financings. This
fee is deducted from each tranche of the project financing.
(ii) Intermediary Fee. Attributed Holdings International (AHI) receives a 2%
success fee for establishing opportunities, assisting our clients during the
onboarding process, developing, submitting and managing documentation,
assisting in closing the financing, conducting follow-up and support during all
phases of the operation. This fee is based on success and is deducted from
each tranche of the financing and paid to AHI directly by EAM.
3.11 Confidential Information. All information contained herein constitutes confidential
information between the Parties and shall be kept confidential and shall not be disclosed by the Parties
provided however that the Recipient may disclose Information (a) pursuant to a requirement of law
or a regulatory body, provided that the Recipient (i) gives the Disclosing Party written notice of such
fact so that it may obtain a protective order or other appropriate remedy concerning any such
disclosure; (ii) cooperates fully with the Disclosing Party in connection with its efforts to obtain any
such order or other remedy; and (iii) discloses, where disclosure is necessary, only the Information
legally required to be disclosed, and uses its best efforts to have confidential treatment accorded to
the disclosed Information; (b) to its issuing bank or any other financial institution; (c) in furtherance
of any obligations under the Securities Act of 1934; (d) to its representatives, affiliates and assigns, but
solely for the purposes of evaluating, entering and performing this Agreement. The Information that
is disclosed pursuant to this paragraph shall remain confidential for all other purposes
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Article 4 Pledge Procedure
4.1 The process for making the pledge of Pledged Funds shall be as follows:
(i) EAM and Beyond execute this Agreement and the Pledge Agreement with
EAM.
(ii) EAM and Beyond, within a reasonable time, shall open the Pledge Account at
Bank. For that purpose, EAM can be a facilitator to this process.
(iii) Within a maximum of three days following execution of the Pledge
Agreement, Party B shall deposit the Pledged Funds into the Pledge Account
and give instructions to the Collateral Agent to buy the Securities.
(iv) Within a maximum of three days Beyond will extend the margin value to EAM
by the prescribed method in 3.3 (v)
(v) After the Party A receives the Margin Value Facility, Party A will place the
margin value in an account specifically designated to hold margin values
extended from pledged funds accounts until the first disbursement of funds
occurs.
(vi) After the Margin Value Facility is received EAM will make the disbursement
of funds, in accordance with the tranche schedule detailed in Exhibit D.
4.2 Bank Coordinates. The issuance and delivery of the Financial Instrument shall be
performed under EAM’s instructions and under the following bank coordinates:
(i) Beyond Security Bank Information 1
SECURITY BANK: CITIBANK
BANK ADDRESS: 388 GREENWICH STREET
NEW YORK, NY 10013
ACCOUNT NAME: MORGAN STANLEY
ACCOUNT NUMBER: 40611172
SWIFT CODE CITIUS33
EAM’s Beneficiary Bank Information
Bank Name: SIGNATURE BANK
1
NTD: Beyond Team: Please confirm this information is correct.
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Bank Address: 565 FIFTH AVENUE 16TH FLOOR NEW YORK, NY
10017
Account Name: ETHOS ASSET MANAGEMENT INC
Account Holder Address: 4660 La Jolla Village DR, San Diego, CA 92122
Account Number: 1504707896
Routing Number: 026013576
Swift Code: SIGNUS33
Beyond’s Funds Disbursement Receiving Bank Information 2
RECEIVER BANK: HSBC BANK USA NA
BANK ADDRESS: HSBC BANK USA NA
452 5TH AVE
NEW YORK, NY 10018
ACCOUNT NAME: BEYOND LIMITS INC.
ACCOUNT NUMBER: 917023927
SWIFT CODE MRMDUS33
Article 5 Representations and Warranties
5.1 EAM represents and warrants that as of the Effective Date:
(i) EAM is a duly formed and in good standing corporation under the laws of
California, with full power and authority to perform its obligations herein.
(ii) This Agreement has been duly authorized, executed and delivered by EAM
and, upon due authorization, execution, and delivery by Beyond, will constitute
the valid and legally binding Agreement.
(iii) Neither EAM nor any of its subsidiaries has, nor any director, officer, agent,
employee or other person acting on behalf of EAM or any subsidiary has in
the course of his actions for or on behalf of EAM, used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee. Without limiting the generality of the
foregoing, EAM and its subsidiaries have not directly or indirectly made or
2
NTD: Beyond Team: Please confirm this information is correct.
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agreed to make (whether or not said payment is lawful) any payment to obtain,
or with respect to, sales other than usual and regular compensation to its or
their employees and sales representatives with respect to such sales.
(iv) EAM, within the past ten years, has not violated or is in violation of any
applicable laws relating to terrorism or money laundering, including, without
limitation, the USA Patriot Act, or has not been engaged in or engages in any
transaction, investment, undertaking or activity that conceals the identity,
source or destination of the proceeds from any category of offenses designated
in any applicable law, regulation or other binding measure implementing the
40 Recommendations and the IX Special Recommendations published by the
Organization for Economic Cooperation and Development’s Financial Action
Task Force on Money Laundering.
(v) EAM voluntarily signed this Agreement, free from any influence,
enforcement, or misrepresentation of any kind.
(vi) EAM has and will have for the full length of the disbursement schedule set
forth on Exhibit D sufficient funds held in unrestricted cash to advance the
full amount of the Funds set forth in Section 3.1
5.2 Beyond represents and warrants that as of the Effective Date:
(i) Beyond is a duly formed and validly existing Corporation under the laws of
the state of Delaware, with full power and authority to perform its obligations
herein.
(ii) This Agreement has been duly authorized, executed and delivered by Beyond
and, upon due authorization, execution, and delivery by EAM, will constitute
the valid and legally binding Agreement.
(iii) All information contained in the documents submitted to EAM by Beyond are
true.
(iv) Neither Beyond nor any of its subsidiaries has, nor any director, officer, agent,
employee or other person acting on behalf of Beyond or any subsidiary has in
the course of his actions for or on behalf of Beyond, used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee. Without limiting the generality of the
foregoing, Beyond and its subsidiaries have not directly or indirectly made or
agreed to make (whether or not said payment is lawful) any payment to obtain,
or with respect to, sales other than usual and regular compensation to its or
their employees and sales representatives with respect to such sales.
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(v) Beyond has not violated or is in violation of any applicable laws relating to
terrorism or money laundering, including, without limitation, the USA Patriot
Act, or has not been engaged in or engages in any transaction, investment,
undertaking or activity that conceals the identity, source or destination of the
proceeds from any category of offenses designated in any applicable law,
regulation or other binding measure implementing the 40 Recommendations
and the IX Special Recommendations published by the Organization for
Economic Cooperation and Development’s Financial Action Task Force on
Money Laundering.
(vi) Beyond voluntarily signed this Agreement, free from any influence,
enforcement, or misrepresentation of any kind.
Article 6 Conditions
6.1 EAM is obligated to consummate the transaction contemplated by this Agreement
only if each of the following conditions has been satisfied or waived on or before the “Closing” as
defined in section 1.2 herein:
(i) Representations and Warranties. The representations and warranties of
Beyond set forth herein must be true.
(ii) Covenants. Beyond shall have performed all its obligations and agreements
set forth in Section 4.1.
6.2 Beyond is obligated to consummate the transaction contemplated by this Agreement
only if each of the following conditions has been satisfied or waived on or before the “Closing” as
defined in Section 1.2 herein
(i) Representations and Warranties. The representations and warranties of
EAM set forth herein must be true.
(ii) Covenants. EAM shall have performed all its obligations and agreements set
forth in Section 4.1.
Article 7 Events of Default
7.1 Event of Default by Party B. An “Event of Default” by Beyond will occur if any of
the following occurs:
(i) Beyond fails to pay EAM any amount due pursuant to this Agreement on the
due date set forth on Exhibit F and fails to remedy such failure within 10 (ten)
business days after written demand from EAM.
(ii) Beyond breaches any obligations, conditions, representations and warranties,
stated in this Agreement or the Pledge Agreement with EAM, if such
obligation, condition, representation or warranty is capable of being remedied,
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and Beyond fails to remedy it within thirty (30) business days of receipt of
written demand from EAM.
(iii) Upon an event of default by Beyond, the unpaid tranche amount will bear
simple interest from the date of the event of default to the date of cure at a
rate the payment date at a rate equal to 2% (TWO PERCENT) per annum,
for the duration of such event of default.
(A) Following an event of default by Beyond under Section 7.1, after the
notice and opportunity to cure provided therein, EAM will be entitled
to call up to the amount of the outstanding principal balance of the
Funds from the Pledge Account pursuant to the terms of the Pledge
Agreement.
(B) In the event the Pledged Funds exceed the amount required to be paid
to Party A pursuant to Section 7.1, the remaining Pledged Funds shall
be released to Party B immediately,
(C) Any outstanding principal owed to EAM following payment of the
Pledged Funds to Party A under Section 7.1 (iii)(A), will bear simple
interest in accordance with Section 7.1(iii) and in accordance with 8.2
Termination for Default.
7.2 Event of Default by Party A. An “Event of Default” by EAM will occur if any of
the following occurs:
(i) EAM fails to make any disbursement within 30 calendar days following the
delivery of Beyond’s Notice.
(ii) EAM fails to pay Beyond any amount due pursuant to this Agreement on the
due date and fails to remedy such failure within 10 (ten) business days after its
due date.
(iii) EAM breaches any obligations, conditions, representations, and warranties,
stated in this Agreement or any other agreement it has entered into with
Beyond, if such obligation, condition, representation or warranty is capable of
being remedied, and EAM fails to remedy it within 10 (ten) business days of
receipt of written demand from Beyond.
(iv) Upon an Event of Default by EAM, the unpaid portion of any amount due to
Beyond will bear simple interest from the date of the event of default to the
payment date at a rate equal to two percent (2.00%) per annum, for the
duration of such event of default.
(A) Following an Event of Default by EAM, Beyond shall unilaterally
terminate the Pledge Agreement and receive a full refund of any
remaining Pledged Funds,
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(B) Any outstanding principal owed by Beyond shall be treated in
accordance with Section 8.6 but may be prepaid in advance without
the prior approval of EAM.
Article 8 Termination
8.1 Term. The term of this Agreement (the “Term”) and the rights and obligations set
forth herein shall commence on the Effective Date and terminate on the Closing Date, unless
terminated earlier in accordance with Sections 8.2 and 8.3.
8.2 Termination for default. This Agreement shall terminate if any of the Events of
Default mentioned in Article 7 occurs. In the case the Event of Default is caused by Beyond under
Section 7.1, Beyond shall complete Repayment, in accordance with the provisions of Article 7, of the
remaining principal and interest owed to EAM (after any reduction from exercising the payment of
Pledged Funds) within 30 business days. In the case the Event of Default is caused by EAM under
Section 7.2, Repayment shall not be required as further described in Section 8.6.
8.3 Termination. If Beyond issues collateral which does not fulfil the conditions stated
in Section 3.4, EAM may terminate this Agreement at any time and without any prior written notice
to Beyond. In this case, EAM shall be entitled to a refund of the full amount of Funds transferred or
disbursed to Beyond.
8.4 Effect of Termination. Upon termination or expiration of this Agreement, each Party
shall promptly return to the other Party relevant records and materials in its possession or control
containing or comprising the other Party’s Confidential Information and to which the Party does not
retain rights hereunder; provided, however, that each Party shall be entitled to retain copies of the
other Party’s Confidential Information to the extent necessary to comply with applicable regulatory
obligations and shall be entitled to retain one copy of the other Party’s Confidential Information for
archival purposes.
8.5 Survival. In the event of the expiration or early termination of this Agreement, the
provisions of Sections 3.2, 3.9, 8.4 and 3.10 (to the extent related to an action or claim originating
before such expiration or termination), and Article 5 and Article 9 and such other provisions that by
their terms should reasonably be judged to survive expiration or termination, shall survive for the
period specified therein or, in the absence of such specification, indefinitely.
8.6 Termination for Lack of Funds. In the event EAM fails to provide any advance of
the Funds to Beyond as set forth in Section 3.1 and Exhibit D (or any other event of default under
Section 7.2), totally or partially, Beyond shall unilaterally terminate this Agreement at any time and
without any prior written notice to EAM. In this case:
(i) The Funds provided to Beyond at the time of the failure will remain as indemnification
for the non-compliance of funding obligations in benefit of Beyond.
(ii) Beyond will have no further Repayment owing to EAM.
(iii) All collateral provided by Beyond and set forth in this Agreement shall be cancelled,
including the Pledge Agreement described in Sections 3.3 and 3.4.
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Article 9 Miscellaneous
9.1 Amendments. The Parties may amend this Agreement only by an agreement in
writing that both Parties executed.
9.2 Force Majeure. This Agreement shall be subject to the ICC Force Majeure Clause
2003. Neither Party hereto shall bear any responsibility for the full or partial non-fulfilment of its
contractual obligations if this non-fulfilment is due to Force Majeure circumstances, as stated by the
ICC latest edition, arisen after the signature of the present Agreement. The fulfilment term of the
contractual obligations of either Party hereto shall accordingly be postponed for the period during
which such circumstances remain. Either Party hereto shall be obliged to immediately inform the other
about the beginning, probable duration and cessation of the Force Majeure circumstances. The non-
notification about the Force Majeure circumstances shall cancel the right of either Party hereto to
make reference to them under the present Agreement.
9.3 Merger. This Agreement is the final and exclusive statement of the Parties’ agreement
on the matters contained in this letter. It supersedes all previous negotiations and agreements.
9.4 Counterparts. The Parties may execute this Agreement in one or more counterparts,
each of which is an original, and all of which constitute only one agreement between the Parties.
9.5 Assignment and Delegation. No party may assign any right or delegate any
performance under this Agreement. All assignments of rights are prohibited, whether they are
voluntary or involuntary, by merger, consolidation, dissolution, operation of law, or any other manner.
A purported assignment or purported delegation in violation of this Section 9.5 is void.
9.6 Successors and Assigns. This Agreement binds and benefits the parties and their
respective permitted successors and assigns.
9.7 Notices. The Parties shall send all notices in writing and give all consents in writing.
A notice or consent is effective when the intended recipient receives it by mail or e-mail.
If to EAM:
Mr. CARLOS MANUEL DA SILVA SANTOS
CEO
4660 La Jolla Village Drive, San Diego, California, 92122, USA
carlos@ethosasset.com
If to Beyond:
Frank Sansone
CFO
450 N. Brand Blvd, Glendale CA 91203
fsansone@beyond.ai
9.8 Exhibits. Attached hereto and incorporated herein by this reference are the following
exhibits: Exhibit A, Exhibit B, Exhibit C, Exhibit D and Exhibit E.
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9.9 Severability. If any provision of this Agreement is illegal or unenforceable, that
provision is severed from this Agreement and the other provisions remain in force.
9.10 English Language. All documentation and information related to this Agreement
shall be conducted in English
9.11 Dispute Resolution. In the event of any dispute arising out of or in connection with
the present Agreement, the Parties shall first refer the dispute to proceedings under the ICC Mediation
Rules. The place of mediation shall be New York City, New York. If the dispute has not been settled
pursuant to the said Rules within 60 days following the filing of a Request for Mediation or within
such other period as the Parties may agree in writing, such dispute shall thereafter be finally settled
under the Rules of Arbitration of the ICC by one arbitrator appointed in accordance with the said
Rules of Arbitration. The place of Arbitration shall be New York City, New York. The language of
the arbitration shall be English. The arbitration shall be the sole and exclusive forum for resolution of
any dispute, and the award shall be in writing, state the reasons for the award and be f
Preview
FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 EXHIBIT 2 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 AGREEMENT NO. EAM-BEYOND/0409-2022/PHASE vFinal AGREEMENT NO. EAM-BEYOND/0409-2022/PHASE C PROJECT BEYOND GROWTH FUND This Agreement (“Agreement”), dated January 19, 2023, is between ETHOS ASSET MANAGEMENT, INC., a corporation, incorporated under the laws of California, having its principal place of business at 4660 La Jolla Village Drive, San Diego, California, 92122, USA, herein represented by MR. CARLOS MANUEL DA SILVA SANTOS (“EAM”, “Lender” or “Party A”), and BEYOND LIMITS, INC., having its principal place of business at 450 N. Brand Blvd, Glendale CA 91203 represented by Frank Sansone (“Beyond” or “Party B”), and collectively with EAM, each a “Party”). EAM and Beyond are herein referred to individually as a “Party” and collectively as the “Parties.” Background This Agreement codifies the desire between the Parties to enter into this financing agreement pursuant to which EAM shall provide financing to Beyond to further develop the Project, as specified herein. EAM warrants and commits to provide Party B with the full principal amount of $225,000,000, to be funded to Party B in the following Phases: Phase A at $10,000,000, Phase B at $25,000,000, Phase C at $50,000,000, Phase D at $60,000,000, and Phase E at $80,000,000 (collectively, the “Phases” and each, individually, a “Phase”). Beyond warrants and commits to put in place and activate the following collaterals for each Phase that is funded: for Phase A, 25% of financing (corresponding to $2,500,000); for Phase B, 25% of financing (corresponding to $6,250,000); for Phase C, 20% of financing (corresponding to $10,000,000); for Phase D, 20% of financing (corresponding to $12,000,000); and for Phase E, 20% of financing (corresponding to $16,000,000). For the avoidance of doubt, Beyond shall not be obligated, for any reason, to put in place or activate collateral for any Phase that is not funded. The principal of the financing applicable to each Phase shall accrue interest annually at an annual fixed interest rate of 1.5%. For the avoidance of doubt, this Agreement only gives specific effect to Phase C for a financing amount of $50,000,000 (the “Funds”). Accordingly, in consideration of the mutual covenants herein contained, the Parties hereto, intending to be legally bound hereby, agree as follows: FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 Article 1 Definitions Terms defined in the preamble and the recitals of this Agreement have their assigned meanings, and the following terms have the meanings assigned to them: 1.1 “Closing” means the consummation of the transactions that this Agreement contemplates. The consummation of said transactions (the “Closing”) shall take place as soon as reasonably possible after all conditions precedent to the Closing set forth in Section 3.5, Section 3.6, and Article VI have been satisfied or waived in writing by the Parties. The Closing shall take place at the offices of ETHOS ASSET MANAGEMENT, INC., at 4660 La Jolla Village Drive, San Diego, California, 92122, USA, at 10:00 a.m. local time, or at such other time, date and place as may be agreed in writing by the Parties. 1.2 “Closing Date” means the due date of the last installment payment described in Exhibit D. 1.3 “Effective Date” means January 19, 2023. 1.4 “Pledge Agreement” means the pledge undertaking to be entered into by and between the Bank (as hereinafter defined) and Beyond in accordance with Exhibit C. 1.5 “Project” means the project described in Exhibit E. Article 2 Project 2.1 Formation and Purpose. The Parties agree to join efforts in this venture in accordance with the terms of this Agreement for the purpose of developing Phase C of the Project. 2.2 Engagement in other activities. Beyond shall exclusively use the Funds towards the Project, including general business or corporate activities in furtherance of such Project. 2.3 No Liability. The debts, obligations and liabilities of Beyond, other than those set forth in this Agreement (whether arising in contract, tort or otherwise) in connection with the Project, shall be solely the debts, obligations and liabilities of Beyond and neither EAM nor its members shall be obligated in its financial capacity for any such debt, obligation or liability (other than as set forth in this Agreement) solely by reason of being a Party to this Agreement. 2.4 Status and Expenditure Compliance. The parties agree that Beyond shall provide to EAM quarterly updates on the status of the Project and such supporting documents and records related to such project, subject to any confidentiality concerns, attorney-client privilege or instances where Beyond reasonably determines there may be a conflict of interest. Article 3 Funds, Collateral and Payment 3.1 Funds. Party A warrants and commits to provide Party B with the full principal amount of $225,000,000, which shall be funded to Party B in the following Phases: Phase A Project of $10,000,000; Page | 2 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 Phase B Project of $25,000,000; Phase C Project of $50,000,000; Phase D Project of $60,000,000 Phase E Project of $80,000,000 The Parties acknowledge and agree that this Agreement gives specific effect to Phase C only, under which Party A warrants and commits to provide Party B with the partial principal amount of $50,000,000 (Fifty Million US Dollars). The Parties agree that all the terms of this Agreement, including the interest rate, shall be identically replicated for each Phase, except as otherwise provided herein. The Parties further agree that this commitment shall cease to exist if either of the Parties defaults in terms of Article 7. 3.2 Securities Regulation Exempt. The Parties acknowledge that the transaction involved in this Agreement shall not be interpreted as a sale of securities pursuant to the Securities Act of 1933 or by the Security Exchange Act of 1934 of the United States of America. 3.3 Collateral. In consideration for the funds provided by Party A or its nominee as established in Section 3.1, Party B shall pledge funds per each phase as below: for Phase A 25% of financing corresponding to $2,500,000; for Phase B 25% of financing corresponding to $6,250,000; for Phase C 20% of financing corresponding to $10,000,000; for Phase D 20% of financing corresponding to $12,000,000; for Phase E 20% of financing corresponding to $16,000,000. The Parties acknowledge and agree that this Agreement specifically establishes the terms and conditions for Phase C, under which Party B shall deposit and maintain funds in the Pledge Account (as hereinafter defined) in an amount of $10,000,000 (the “Pledged Funds”). For the avoidance of doubt, the pledged amounts ascribed to each Phase in this Section 3.3 shall correspond only to such amounts that are, or are currently expected to be, pledged under such Phase. The Pledged Funds will be established under the following rules (i) Pledged Funds shall be reduced each successive year to equal 20% of the outstanding principal. (ii) The Pledged Funds shall be deposited into a pledge account (the “Pledge Account”) with the bank set forth on Exhibit C (the “Bank”) to secure Beyond’s obligation to make repayment of the Funds pursuant to the terms of Page | 3 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 this Agreement as set forth in the Pledge and Assignment Agreement attached hereto as Exhibit C (the “Pledge Agreement”). (iii) EAM and Beyond shall enter into the Pledge Agreement, pursuant to which EAM will have certain rights to draw funds from the Pledge Account upon a default by Beyond under the terms of this Agreement. (iv) Beyond shall cause Collateral Agent to purchase the securities in the manner stipulated in the Pledge Agreement Section 3(a) and create the agreed-upon margin. (v) Beyond shall pass the agreed percentage of the margin value to EAM within 3 working days of margin being established by transferring the margin value to a Beyond operating account and then passing to EAM’s designated bank. (vi) Party A shall place the margin value in an account specifically designated to hold margins prior to or simultaneous with the first disbursement of funds in accordance with Exhibit D. Party A shall provide weekly statements of the account to Party B to verify the margin value is remaining in the account. At any time during the period of which the extensions of credit are outstanding, Party B may demand a statement of account from Party A in which Party A has one banking day to produce such statement. Once Party B has received the first disbursement of the Funds from Party A, Party A’s obligation under this clause 3.3(vi) will be terminated. (vii) The Pledged Funds shall be maintained in the Pledge Account until the date that all Funds are repaid pursuant to Section 3.4(i) and Exhibit D, (the “Expiration Date”) and serve as security for the repayment of the Funds described in Section 3.4 and under the conditions described in Exhibit D. (viii) The balance required to be maintained in the Pledge Account shall be decreased each year of the Term (as hereinafter defined) that the Funds remain outstanding, beginning on the fourth anniversary date of this Agreement and lasting until the date all Funds are completely repaid to Party B and are no longer subject to any claim from Party A. Beginning on the fourth anniversary date of this Agreement and continuing on each anniversary date of this Agreement thereafter, Party B shall be entitled to withdraw a cash amount of Pledged Funds, no part of which shall be subject to unresolved good faith claims made by Party A for an alleged Event of Default (as hereinafter defined) by Party B (“Pledged Fund Claims”), from the Pledge Account equal to the amount of principal paid to Party A in repayment of Funds. (ix) Both Parties shall provide written instructions as necessary to the Bank to release the Pledged Funds in an amount that equals the amount of principal repaid by Party B to Party A in the previous year and any amounts for previous years for which Party B may have elected, for any reason, not to withdraw from the Pledge Account, minus any Pledged Fund Claims. As soon as each Page | 4 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 Pledged Fund Claim is resolved to the mutual satisfaction of the Parties, the Parties shall deliver written instruction to the Bank that the amount being held in the Pledge Account on account of a Pledged Fund Claim has been resolved by the Parties and direct the Bank to deliver such Pledged Funds immediately to Party B. When the balance of Funds remaining in the Pledge Account equals or exceeds the remaining amount of Funds to be repaid by Party B to Party A, the Parties agree that Party B shall have the right to credit the Pledged Funds remaining that are not subject to any Pledged Fund Claims to reduce the amount of the Funds required to be repaid to Party A, including the full repayment of the Funds to Party A. (x) IN NO EVENT SHALL EITHER PARTY HAVE ANY RIGHTS TO THE PLEDGED FUNDS, EXCEPT AS SPECIFICALLY PROVIDED IN THE PLEDGE AGREEMENT UNDER THE TERMS OF DEFAULT DESCRIBED IN SECTION 7.1 HEREOF. 3.4 Repayment. (i) Beyond shall repay EAM the full amount of funds provided by EAM, paying off the financing mentioned in this Agreement on time, in full, in compliance with all the obligations accepted by Beyond, and in accordance with the General Repayment Data, in each case as set forth on Exhibit D and described in Section 3.7. (ii) Cancellation upon Repayment. With the exception of the cancellation criteria described in Article 7, the Pledge Agreement shall be cancelled upon full Repayment in accordance with Section 3.4(i) and 3.8. 3.5 Condition for Funds. EAM will provide funds for the Project if Beyond issues the agreed Pledge Agreement and if such Pledge Agreement is signed, delivered, and verified and held in accordance with the instructions provided by the Parties and under the terms stated in Section 3.4 and Article 4. 3.6 Funds Disbursement Schedule. In accordance with the terms and provisions set forth herein, EAM will provide funds for the Project as stated in Section 3.1 in the form of installments to Beyond with a maturity period of 12-years, subject to the grace period set forth on Exhibit D (the “Disbursement Schedule”). The Disbursement Schedule includes the pre-approval of the conditions for the disbursement of funds, approved and signed by the Parties as established in Exhibit D of this Agreement. 3.7 Repayment period. In accordance with the terms of this Agreement, Beyond shall complete repayment of the full amount of funds plus simple interest in a period of 12-years from the Disbursement Date. Disbursement Date means the date of the first completed disbursement of the of the Funds or any portion of it and shall be interpreted as of the date in which Beyond receives the respective amount in its bank account or at a designated bank. 3.8 Prepayment. Funds received and accrued interest may be prepaid under the following conditions. Page | 5 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 (i) No consent required for prepayment in full with a notice of prepayment 90 days prior. (ii) Consent for any partial prepayment provided that such prepayment shall be accompanied by notice and such consent shall not be unreasonably withheld. (iii) All outstanding interest is paid. Calculated from the date of the prepayment event to the maturity date of the financing. 3.9 Indemnification by each Party. Each Party agrees to indemnify and hold harmless the other against any losses, claims, damages or liabilities, joint or several, to which EAM may become subject, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact by such Party in relation to this Agreement, (ii) any breach by Beyond of any of its representations, warranties or covenants contained herein, or (iii) the omission by such Party in relation to this Agreement to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and will reimburse such EAM for any legal or other expenses reasonably incurred by such Party in connection with investigating or defending any such loss, claim, damage, liability or action, whether arising out of an action between such Party and a third party provided that such loss, claim, damage or liability is found ultimately to arise out of or be based upon any of the facts set forth in items (i) through (iii) in this Section 3.9. 3.10 Taxes, Duties and Fees. Each Party, individually and separately, will be responsible for any tax or fee that may arise from this Agreement in connection with the development of the Project. (i) Origination Fee. EAM assesses a 3% origination fee for all financings. This fee is deducted from each tranche of the project financing. (ii) Intermediary Fee. Attributed Holdings International (AHI) receives a 2% success fee for establishing opportunities, assisting our clients during the onboarding process, developing, submitting and managing documentation, assisting in closing the financing, conducting follow-up and support during all phases of the operation. This fee is based on success and is deducted from each tranche of the financing and paid to AHI directly by EAM. 3.11 Confidential Information. All information contained herein constitutes confidential information between the Parties and shall be kept confidential and shall not be disclosed by the Parties provided however that the Recipient may disclose Information (a) pursuant to a requirement of law or a regulatory body, provided that the Recipient (i) gives the Disclosing Party written notice of such fact so that it may obtain a protective order or other appropriate remedy concerning any such disclosure; (ii) cooperates fully with the Disclosing Party in connection with its efforts to obtain any such order or other remedy; and (iii) discloses, where disclosure is necessary, only the Information legally required to be disclosed, and uses its best efforts to have confidential treatment accorded to the disclosed Information; (b) to its issuing bank or any other financial institution; (c) in furtherance of any obligations under the Securities Act of 1934; (d) to its representatives, affiliates and assigns, but solely for the purposes of evaluating, entering and performing this Agreement. The Information that is disclosed pursuant to this paragraph shall remain confidential for all other purposes Page | 6 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 Article 4 Pledge Procedure 4.1 The process for making the pledge of Pledged Funds shall be as follows: (i) EAM and Beyond execute this Agreement and the Pledge Agreement with EAM. (ii) EAM and Beyond, within a reasonable time, shall open the Pledge Account at Bank. For that purpose, EAM can be a facilitator to this process. (iii) Within a maximum of three days following execution of the Pledge Agreement, Party B shall deposit the Pledged Funds into the Pledge Account and give instructions to the Collateral Agent to buy the Securities. (iv) Within a maximum of three days Beyond will extend the margin value to EAM by the prescribed method in 3.3 (v) (v) After the Party A receives the Margin Value Facility, Party A will place the margin value in an account specifically designated to hold margin values extended from pledged funds accounts until the first disbursement of funds occurs. (vi) After the Margin Value Facility is received EAM will make the disbursement of funds, in accordance with the tranche schedule detailed in Exhibit D. 4.2 Bank Coordinates. The issuance and delivery of the Financial Instrument shall be performed under EAM’s instructions and under the following bank coordinates: (i) Beyond Security Bank Information 1 SECURITY BANK: CITIBANK BANK ADDRESS: 388 GREENWICH STREET NEW YORK, NY 10013 ACCOUNT NAME: MORGAN STANLEY ACCOUNT NUMBER: 40611172 SWIFT CODE CITIUS33 EAM’s Beneficiary Bank Information Bank Name: SIGNATURE BANK 1 NTD: Beyond Team: Please confirm this information is correct. Page | 7 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 Bank Address: 565 FIFTH AVENUE 16TH FLOOR NEW YORK, NY 10017 Account Name: ETHOS ASSET MANAGEMENT INC Account Holder Address: 4660 La Jolla Village DR, San Diego, CA 92122 Account Number: 1504707896 Routing Number: 026013576 Swift Code: SIGNUS33 Beyond’s Funds Disbursement Receiving Bank Information 2 RECEIVER BANK: HSBC BANK USA NA BANK ADDRESS: HSBC BANK USA NA 452 5TH AVE NEW YORK, NY 10018 ACCOUNT NAME: BEYOND LIMITS INC. ACCOUNT NUMBER: 917023927 SWIFT CODE MRMDUS33 Article 5 Representations and Warranties 5.1 EAM represents and warrants that as of the Effective Date: (i) EAM is a duly formed and in good standing corporation under the laws of California, with full power and authority to perform its obligations herein. (ii) This Agreement has been duly authorized, executed and delivered by EAM and, upon due authorization, execution, and delivery by Beyond, will constitute the valid and legally binding Agreement. (iii) Neither EAM nor any of its subsidiaries has, nor any director, officer, agent, employee or other person acting on behalf of EAM or any subsidiary has in the course of his actions for or on behalf of EAM, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. Without limiting the generality of the foregoing, EAM and its subsidiaries have not directly or indirectly made or 2 NTD: Beyond Team: Please confirm this information is correct. Page | 8 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 agreed to make (whether or not said payment is lawful) any payment to obtain, or with respect to, sales other than usual and regular compensation to its or their employees and sales representatives with respect to such sales. (iv) EAM, within the past ten years, has not violated or is in violation of any applicable laws relating to terrorism or money laundering, including, without limitation, the USA Patriot Act, or has not been engaged in or engages in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any applicable law, regulation or other binding measure implementing the 40 Recommendations and the IX Special Recommendations published by the Organization for Economic Cooperation and Development’s Financial Action Task Force on Money Laundering. (v) EAM voluntarily signed this Agreement, free from any influence, enforcement, or misrepresentation of any kind. (vi) EAM has and will have for the full length of the disbursement schedule set forth on Exhibit D sufficient funds held in unrestricted cash to advance the full amount of the Funds set forth in Section 3.1 5.2 Beyond represents and warrants that as of the Effective Date: (i) Beyond is a duly formed and validly existing Corporation under the laws of the state of Delaware, with full power and authority to perform its obligations herein. (ii) This Agreement has been duly authorized, executed and delivered by Beyond and, upon due authorization, execution, and delivery by EAM, will constitute the valid and legally binding Agreement. (iii) All information contained in the documents submitted to EAM by Beyond are true. (iv) Neither Beyond nor any of its subsidiaries has, nor any director, officer, agent, employee or other person acting on behalf of Beyond or any subsidiary has in the course of his actions for or on behalf of Beyond, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. Without limiting the generality of the foregoing, Beyond and its subsidiaries have not directly or indirectly made or agreed to make (whether or not said payment is lawful) any payment to obtain, or with respect to, sales other than usual and regular compensation to its or their employees and sales representatives with respect to such sales. Page | 9 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 (v) Beyond has not violated or is in violation of any applicable laws relating to terrorism or money laundering, including, without limitation, the USA Patriot Act, or has not been engaged in or engages in any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any applicable law, regulation or other binding measure implementing the 40 Recommendations and the IX Special Recommendations published by the Organization for Economic Cooperation and Development’s Financial Action Task Force on Money Laundering. (vi) Beyond voluntarily signed this Agreement, free from any influence, enforcement, or misrepresentation of any kind. Article 6 Conditions 6.1 EAM is obligated to consummate the transaction contemplated by this Agreement only if each of the following conditions has been satisfied or waived on or before the “Closing” as defined in section 1.2 herein: (i) Representations and Warranties. The representations and warranties of Beyond set forth herein must be true. (ii) Covenants. Beyond shall have performed all its obligations and agreements set forth in Section 4.1. 6.2 Beyond is obligated to consummate the transaction contemplated by this Agreement only if each of the following conditions has been satisfied or waived on or before the “Closing” as defined in Section 1.2 herein (i) Representations and Warranties. The representations and warranties of EAM set forth herein must be true. (ii) Covenants. EAM shall have performed all its obligations and agreements set forth in Section 4.1. Article 7 Events of Default 7.1 Event of Default by Party B. An “Event of Default” by Beyond will occur if any of the following occurs: (i) Beyond fails to pay EAM any amount due pursuant to this Agreement on the due date set forth on Exhibit F and fails to remedy such failure within 10 (ten) business days after written demand from EAM. (ii) Beyond breaches any obligations, conditions, representations and warranties, stated in this Agreement or the Pledge Agreement with EAM, if such obligation, condition, representation or warranty is capable of being remedied, Page | 10 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 and Beyond fails to remedy it within thirty (30) business days of receipt of written demand from EAM. (iii) Upon an event of default by Beyond, the unpaid tranche amount will bear simple interest from the date of the event of default to the date of cure at a rate the payment date at a rate equal to 2% (TWO PERCENT) per annum, for the duration of such event of default. (A) Following an event of default by Beyond under Section 7.1, after the notice and opportunity to cure provided therein, EAM will be entitled to call up to the amount of the outstanding principal balance of the Funds from the Pledge Account pursuant to the terms of the Pledge Agreement. (B) In the event the Pledged Funds exceed the amount required to be paid to Party A pursuant to Section 7.1, the remaining Pledged Funds shall be released to Party B immediately, (C) Any outstanding principal owed to EAM following payment of the Pledged Funds to Party A under Section 7.1 (iii)(A), will bear simple interest in accordance with Section 7.1(iii) and in accordance with 8.2 Termination for Default. 7.2 Event of Default by Party A. An “Event of Default” by EAM will occur if any of the following occurs: (i) EAM fails to make any disbursement within 30 calendar days following the delivery of Beyond’s Notice. (ii) EAM fails to pay Beyond any amount due pursuant to this Agreement on the due date and fails to remedy such failure within 10 (ten) business days after its due date. (iii) EAM breaches any obligations, conditions, representations, and warranties, stated in this Agreement or any other agreement it has entered into with Beyond, if such obligation, condition, representation or warranty is capable of being remedied, and EAM fails to remedy it within 10 (ten) business days of receipt of written demand from Beyond. (iv) Upon an Event of Default by EAM, the unpaid portion of any amount due to Beyond will bear simple interest from the date of the event of default to the payment date at a rate equal to two percent (2.00%) per annum, for the duration of such event of default. (A) Following an Event of Default by EAM, Beyond shall unilaterally terminate the Pledge Agreement and receive a full refund of any remaining Pledged Funds, Page | 11 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 (B) Any outstanding principal owed by Beyond shall be treated in accordance with Section 8.6 but may be prepaid in advance without the prior approval of EAM. Article 8 Termination 8.1 Term. The term of this Agreement (the “Term”) and the rights and obligations set forth herein shall commence on the Effective Date and terminate on the Closing Date, unless terminated earlier in accordance with Sections 8.2 and 8.3. 8.2 Termination for default. This Agreement shall terminate if any of the Events of Default mentioned in Article 7 occurs. In the case the Event of Default is caused by Beyond under Section 7.1, Beyond shall complete Repayment, in accordance with the provisions of Article 7, of the remaining principal and interest owed to EAM (after any reduction from exercising the payment of Pledged Funds) within 30 business days. In the case the Event of Default is caused by EAM under Section 7.2, Repayment shall not be required as further described in Section 8.6. 8.3 Termination. If Beyond issues collateral which does not fulfil the conditions stated in Section 3.4, EAM may terminate this Agreement at any time and without any prior written notice to Beyond. In this case, EAM shall be entitled to a refund of the full amount of Funds transferred or disbursed to Beyond. 8.4 Effect of Termination. Upon termination or expiration of this Agreement, each Party shall promptly return to the other Party relevant records and materials in its possession or control containing or comprising the other Party’s Confidential Information and to which the Party does not retain rights hereunder; provided, however, that each Party shall be entitled to retain copies of the other Party’s Confidential Information to the extent necessary to comply with applicable regulatory obligations and shall be entitled to retain one copy of the other Party’s Confidential Information for archival purposes. 8.5 Survival. In the event of the expiration or early termination of this Agreement, the provisions of Sections 3.2, 3.9, 8.4 and 3.10 (to the extent related to an action or claim originating before such expiration or termination), and Article 5 and Article 9 and such other provisions that by their terms should reasonably be judged to survive expiration or termination, shall survive for the period specified therein or, in the absence of such specification, indefinitely. 8.6 Termination for Lack of Funds. In the event EAM fails to provide any advance of the Funds to Beyond as set forth in Section 3.1 and Exhibit D (or any other event of default under Section 7.2), totally or partially, Beyond shall unilaterally terminate this Agreement at any time and without any prior written notice to EAM. In this case: (i) The Funds provided to Beyond at the time of the failure will remain as indemnification for the non-compliance of funding obligations in benefit of Beyond. (ii) Beyond will have no further Repayment owing to EAM. (iii) All collateral provided by Beyond and set forth in this Agreement shall be cancelled, including the Pledge Agreement described in Sections 3.3 and 3.4. Page | 12 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 Article 9 Miscellaneous 9.1 Amendments. The Parties may amend this Agreement only by an agreement in writing that both Parties executed. 9.2 Force Majeure. This Agreement shall be subject to the ICC Force Majeure Clause 2003. Neither Party hereto shall bear any responsibility for the full or partial non-fulfilment of its contractual obligations if this non-fulfilment is due to Force Majeure circumstances, as stated by the ICC latest edition, arisen after the signature of the present Agreement. The fulfilment term of the contractual obligations of either Party hereto shall accordingly be postponed for the period during which such circumstances remain. Either Party hereto shall be obliged to immediately inform the other about the beginning, probable duration and cessation of the Force Majeure circumstances. The non- notification about the Force Majeure circumstances shall cancel the right of either Party hereto to make reference to them under the present Agreement. 9.3 Merger. This Agreement is the final and exclusive statement of the Parties’ agreement on the matters contained in this letter. It supersedes all previous negotiations and agreements. 9.4 Counterparts. The Parties may execute this Agreement in one or more counterparts, each of which is an original, and all of which constitute only one agreement between the Parties. 9.5 Assignment and Delegation. No party may assign any right or delegate any performance under this Agreement. All assignments of rights are prohibited, whether they are voluntary or involuntary, by merger, consolidation, dissolution, operation of law, or any other manner. A purported assignment or purported delegation in violation of this Section 9.5 is void. 9.6 Successors and Assigns. This Agreement binds and benefits the parties and their respective permitted successors and assigns. 9.7 Notices. The Parties shall send all notices in writing and give all consents in writing. A notice or consent is effective when the intended recipient receives it by mail or e-mail. If to EAM: Mr. CARLOS MANUEL DA SILVA SANTOS CEO 4660 La Jolla Village Drive, San Diego, California, 92122, USA carlos@ethosasset.com If to Beyond: Frank Sansone CFO 450 N. Brand Blvd, Glendale CA 91203 fsansone@beyond.ai 9.8 Exhibits. Attached hereto and incorporated herein by this reference are the following exhibits: Exhibit A, Exhibit B, Exhibit C, Exhibit D and Exhibit E. Page | 13 FILED: NEW YORK COUNTY CLERK 06/28/2024 03:53 PM INDEX NO. 655379/2023 NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 06/28/2024 9.9 Severability. If any provision of this Agreement is illegal or unenforceable, that provision is severed from this Agreement and the other provisions remain in force. 9.10 English Language. All documentation and information related to this Agreement shall be conducted in English 9.11 Dispute Resolution. In the event of any dispute arising out of or in connection with the present Agreement, the Parties shall first refer the dispute to proceedings under the ICC Mediation Rules. The place of mediation shall be New York City, New York. If the dispute has not been settled pursuant to the said Rules within 60 days following the filing of a Request for Mediation or within such other period as the Parties may agree in writing, such dispute shall thereafter be finally settled under the Rules of Arbitration of the ICC by one arbitrator appointed in accordance with the said Rules of Arbitration. The place of Arbitration shall be New York City, New York. The language of the arbitration shall be English. The arbitration shall be the sole and exclusive forum for resolution of any dispute, and the award shall be in writing, state the reasons for the award and be f