December 1, 2017

PUBLIC NOTICE OF ARTICLE 9 SALE: Stock in Nelbud Services Group, Inc.

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DISPOSITION OF COLLATERAL
UNDER UCC ARTICLE 9 – STOCK IN NELBUD SERVICES GROUP, INC.

1. Background:

  1. Pursuant to (i) the Credit Agreement dated December 2, 2015 (as amended or otherwise modified from time to time, “Credit Agreement”), among Nelbud Services Group, Inc., a New Jersey corporation (“Company”), the parties thereto from time to time as lenders (“Lenders”), and Monroe Capital Management Advisors, LLC, as Administrative Agent for Lenders (“Agent”), (ii) the Guaranty and Collateral Agreement dated December 2, 2015 (as amended or otherwise modified from time to time, “Collateral Agreement”), among Nelbud Holdings, LLC, Nelbud Dilg LLC, Nelbud Crafton LLC, Nelbud Schaaf LLC, Nelbud Caplinger LLC (“Nelbud Pledgors”), the Company, MCDS Ventures LLC (“MCDS”), and the other parties thereto from time to time as Grantors, in favor of Agent, and (iii) the other “Loan Documents” (as defined in the Credit Agreement), the Lenders have made loans to Company that are secured by, inter alia, the “Pledged Equity” and the other “Investment Property” and “Collateral” (as each term is defined in the Collateral Agreement) constituting equity interests in Company owned by the Nelbud Pledgors, and all books and records pertaining thereto (to the extent capable of being sold by Agent pursuant to UCC Section 9-610 (defined below), “Stock”).
  2. The Stock may be subject to certain additional inclusions and exclusions to be negotiated with Agent. Based on disclosures made by Company to Agent, the Stock represents all of the issued and outstanding equity interests of Company, subject to potential rights of certain holders of Options (defined below).
  3. The Stock secures all of the “Company Obligations” and the “Guarantor Obligations” (as each term is defined in the Collateral Agreement) under the Loan Documents. Company is in default of its obligations under the Credit Agreement and the other Loan Documents.
  4. Based on disclosures made by Company to Agent, MCDS is a wholly-owned subsidiary of Company.

2. Sale Summary:

Date and Location: Pursuant to § 9-610 and other applicable provisions of the Illinois Uniform Commercial Code and the corresponding provisions of the Uniform Commercial Code in all other applicable jurisdictions (“UCC”) and the Loan Documents, Agent, on behalf of the Lenders, will offer the Stock for sale in a single block to a single purchaser at a public sale to be held at the offices of Goldberg Kohn, 55 E. Monroe St., Ste. 3300, Chicago, IL at 12:00 p.m. Central Time on December 21, 2017 (“Sale Date”). Agent will make financial information and other diligence information in its possession with respect to the Stock and Company available for review by Qualified Bidders.

3. Method of Intended Disposition and Terms and Conditions of Sale of Stock:

  1. Agent will offer to sell the Stock by public sale under the UCC on terms acceptable to Agent. The Stock will be sold pursuant to the terms of the Collateral Agreement and the rights of Agent pursuant thereto. The Stock will be sold in a single block to a single purchaser, “AS IS, WHERE IS”, “WITH ALL FAULTS”, and without any recourse, representation, warranty, or guaranty of any kind or nature, whether express, implied, or statutory.
  2. The minimum bid for the Stock will be $100,000 (“Minimum Bid Amount”). All offers must be for cash and contain no contingencies that are unsatisfactory to Agent in its discretion, and all offers will be subject to such other or additional bid procedures as Agent may establish or otherwise announce from time to time. The public sale will be held with reserve. Agent reserves the right, at any time, to withdraw the Stock from the sale, cancel or postpone the Sale Date from time to time, and to announce any other or additional terms, conditions, or auction procedures as Agent may determine at or prior to the public sale.
  3. Only bidders that comply with the following requirements (each, a “Qualified Bidder”) may participate at the public sale: (i) delivery to Agent of an acceptable confidentiality agreement; (ii) delivery to Agent of a copy of a certified check for the Minimum Bid Amount; and (iii) delivery to Agent of an acceptable qualified investor letter in which the prospective bidder acknowledges and agrees that, among other things, it is an “accredited investor” as such term is defined in Section 501 of Regulation D of the Securities Act, the Stock is being acquired for investment purposes only and only for its account, the Stock has not been registered under the Securities Act, nor qualified under the securities laws of any other jurisdiction, and the Stock cannot be resold unless subsequently registered under the Securities Act and qualified under applicable federal or state securities laws, or unless appropriate exemptions are available. In all events, Agent will be deemed to be a Qualified Bidder, may credit bid all or any portion of the Company Obligations and the Guarantor Obligations at the sale, and reserves the right to provide financing to any prospective bidder.
  4. To obtain a copy of the confidentiality agreement and qualified investor letter, please contact Vito Mitria of Beacon Management Advisors, LLC, as Agent’s financial advisor, using the contact information below.

4. Potential Rights Under Designated Agreements:

On information and belief, the Nelbud Pledgors are currently party to one or more agreements, including one or more stockholders agreements (“Designated Agreements”). No rights under any Designated Agreement shall be included in the Stock except to the extent that such rights are assignable under applicable law under Article 9 of the UCC, including with the consent of the non-Nelbud Pledgor party as may be required.

5. Potential Rights of Continuing Option Holders:

Based on disclosures made by Company to Agent, certain options exist to purchase certain shares of common stock of Company (“Options”). On information and belief, the Options are fully vested and exercisable by the holders. The Stock being offered for public sale by Agent does not include, and expressly excludes, the rights and interests of any holders in any Options.

6. No Representations/No Warranties:

WITHOUT LIMITING THE FOREGOING, The STOCK will be offered for PURCHASE at the Sale in A SINGLE BLOCK on an “AS IS, WHERE IS” basis, with all faults, and without ANY recourse, representation, guarantee, or warranty of any kind or nature, whether express, implied or statutory, including any REPRESENTATION, GUARANTEE, OR warranty AS TO, OR relating to, merchantability, fitness for a particular purpose, quiet enjoyment, title, possession, or the like. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AGENT HEREBY EXPRESSLY DISCLAIMs ANY AND ALL REPRESENTATIONS, GUARANTEES, AND WARRANTIES OF ANY KIND OR NATURE WHATSOEVER, INCLUDING ANY and all WARRANTIES OF MERCHANTABILITY, warranties OF FITNESS FOR A PARTICULAR PURPOSE, and warranties of quiet enjoyment, title, possession, or the like. AGENT WILL NOT BE, AND WILL NOT BE DEEMED TO BE, LIABLE IN ANY MANNER WHATSOEVER FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES WHATSOEVER. AGENT will not incur any costs or expenses, or OTHERWISE be liable or responsible in any manner for any obligations, whatsoever ARISING OUT OF OR related to the transfer, delivery, or performance of any of the STOCK.

7. Securities Law Notice:

THIS NOTICE DOES NOT CONSTITUTE AN OFFER TO SELL, NOR THE SOLICITATION OF AN OFFER TO BUY, THE STOCK TO OR FROM ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED.

8. Deficiency Claim and Notice of Right to Accounting:

Agent will apply the proceeds received for the Stock at such sale pursuant to the terms of the Credit Agreement or as the holders of indebtedness pursuant to the Credit Agreement may otherwise agree. Agent and the Lenders reserve all of their respective rights against Company, the Nelbud Pledgors, the other Grantors, and any other obligor for any and all of the Company Obligations and the Guarantor Obligations remaining after such sale. Each Nelbud Pledgor is entitled to an accounting of the unpaid Guarantor Obligations secured by the Stock; any such accounting may be requested free of charge by contacting Agent and its counsel in accordance with Section 8.2 of the Collateral Agreement.

9. More Information:

If you would like to become a Qualified Bidder or have any questions about the public sale, please contact Vito Mitria of Beacon Management Advisors, LLC, as Agent’s financial advisor, for additional information: Vito Mitria; Beacon Management Advisors, LLC; 1953 N. Clybourn Ave., #316, Chicago, IL 60614; Email: vito@beaconmgmtadvisors.com

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