REALAUCTION BANKRUPTCY

AND OWNERSHIP SERIES

A collection of public documents from a recent patent infringement action and
related bankruptcy proceedings that show who really owns Realauction.com.


Where Does the Money Go?
Realauction's emergency motion for an order authorizing the debtor to use of cash
collateral [Dkt. No. 5]

Description:
More details about Realauction's day-to-day operations emerged in the bankruptcy
proceeding including Realauction's disclosure of its sources and uses of cash for the
next 30 days. (see Exhibit A). The "Payroll Management" line item of $34,000
represents payments to Lloyd McClendon and Marc Thomashaw of $17,000 each
for a single month. The filing also includes copies of its promissory note and financing
statement with the British Virgin Islands entity Adila Enterprises, S.A., as well as a
security agreement that was not signed by Adila (see Exhibit C).







Note:
Document 4 of 5
These documents were obtained from Grant Street Group, Inc. v. Realauction.com, LLC, Case No.
2:09-cv-01407-MRH, a patent infringement action in the United States District Court for the Western District
of Pennsylvania and from In re Realauction.com, LLC, Case No. 13-28260-RBR, a bankruptcy proceeding in the
United States Bankruptcy Court for the Southern District of Florida.
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 1 of 37
Inre:
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
Fort Lauderdale Division
www .flsb.uscourts.gov
Chapter II
REALAUCTION.COM, LLC, Case No. 13-28260-RBR
Debtor.
- - - - - - - - - - ~ /
DEBTOR'S EMERGENCY MOTION FOR ORDER (A) AUTHORIZING THE
DEBTOR (1) TO USE CASH COLLATERAL ON AN INTERIM BASIS
PURSUANT TO 11 U.S.C. 363, AND (2) TO PROVIDE ADEQUATE PROTECTION
IN CONNECTION THEREWITH PURSUANT TO 11 U.S.C. 361, AND
(B) SETTING A FINAL HEARING PURSUANT TO BANKRUPTCY RULE 4001
(Emergency Hearing Requested on Friday, August 2, 2013)
STATEMENT OF EXIGENT CIRCUMSTANCES
The Debtor requests an emergency hearing in this matter on
August 2, 2013. Without the immediate authorization to use
cash collateral, the Debtor will be irreparably harmed
because the Debtor will not be able to meet its payroll
obligations or acquire goods and services necessary for its
day-to-day operations or generally maintain and preserve
the going concern, enterprise value of the business.
Prior to the filing of this Chapter II case, the Debtor has
been in discussions with its secured lender, Adila
Enterprises, S.A. (the "Lender") in an effort to reach
agreement on the consensual use of the Lender's cash
collateral. As of the filing of this Motion, the Debtor and
the Lender are still in discussions. The Debtor will continue
to use its best efforts to obtain an agreement with the
Lender in advance of an interim hearing on the relief
requested in this Motion.
REALAUCTION.COM, LLC (the "Debtor"), the debtor-in-possession in the above-
captioned case, hereby file this Emergency Motion for an Order (A) Authorizing the Debtor (1)
to use Cash Collateral on an Interim Basis Pursuant to 11 U.S. C. 363 and (2) to Provide
{26815995;6)
AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 333012999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 2 of 37
Adequate Protection in Connection Therewith Pursuant to 11 U.S. C. 361, and (B) Setting a
Final Hearing Pursuant to Bankruptcy Rule 4001 (the "Motion"). In support of the Motion, the
Debtor relies on the Declaration of Marc Thomashaw in Support of Chapter 11 Petition and
First Day Motions (the "First Day Declaration"). In further support of this Motion, the Debtor
respectfully represent as follows:
BACKGROUND
1. On July 31, 2013 (the "Petition Date"), the Debtor each filed a voluntary petition
in this Court for relief under Chapter 11 of Title II of the United States Code (the .Bankruptcy
Code.). Since that time, the Debtor has operated as a debtor-in-possession pursuant to Sections
11 07 and II 08 of the Bankruptcy Code.
2. As of the date hereof, no creditors' committee has been appointed in this case. In
addition, no trustee or examiner has been appointed.
3. For a detailed description of the Debtor, its operations and assets and liabilities,
the Debtor respectfully refer the Court and parties-in-interest to the First Day Declaration.
CASH COLLATERAL AND THE RELIEF SOUGHT BY THE DEBTOR
4. Any cash or cash equivalents, funds or proceeds of or derived from certain of the
collateral securing the obligations of the Debtor to the Lender under the Pre-Petition Loan
Agreement (defined below) constitute cash collateral within the meaning of Section 363 of the
Bankruptcy Code (the "Cash Collateral"). The Cash Collateral includes, without limitation, the
Debtor's cash or cash equivalents maintained in the following bank accounts: (i) $4,816.27 in the
Debtor's U.S. Bank fiduciary account ending in 2174; (ii) $1,656,471.70 in the Debtor's Bank of
America ("BOA") operating checking account ending in 1865; $1 in the Debtor's BOA savings
account ending in 1546; and $1 in the Debtor's BOA fiduciary account ending in 2061.
{26815995;6)
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 333012999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 3 of 37
5. By this Motion, the Debtor seeks the entry of an interim order (the "Interim
Order") authorizing, on an emergency and limited basis, the use of Cash Collateral in
accordance with the 30-day budget attached hereto as Exhibit "A" (the "Budget").
6. An immediate and critical need exists for the Debtor to be permitted access to
Cash Collateral in order to continue to operate their businesses and preserve their ongoing,
enterprise value. Therefore, the Debtor seeks an emergency interim hearing (the "Interim
Hearing") in accordance with Rule 400l(b)(2) of the Federal Rules of Bankruptcy Procedures
(the "Banluuptcy Rules"). At the Interim Hearing, the Debtor will seek entry of an Interim
Order, a copy of which is attached hereto as Exhibit "B."
7. By this Motion, the Debtor fmiher seeks a final hearing (the "Final Hearing") on
this Motion, to be held approximately 30 days after the Interim Hearing in accordance with
Bankruptcy Rule 4001(b)(2) and (3).
8. Prior to the Petition Date, the Debtor and Lender were parties to that certain
Security Agreement (Chattel Mortgage) dated March 15, 2010, between Lender and Debtor
(hereinafter, together with all amendments thereto and modifications thereof, the "Pre-Petition
Loan Agreement"). In accordance with the Pre-Petition Loan Agreement, the Debtor was
originally indebted to the Lender in the amount of$3,831,329.57. As of the date of this Motion,
the amount owing to the Lender under the Pre-Petition Loan Agreement is $2,577,311.11.
9. As security for the payment of all Pre-Petition Debt, the Debtor granted to Lender
pursuant to the Pre-Petition Loan Agreement and related documents (collectively, the "!'re-
Petition Loan Documents")
1
, security interests in and liens (collectively, the "Pre-Petition
Liens") ") upon all or substantially all of Debtor's personal property, including, without
A true and correct copy of the Pre-Petition Loan Documents are attached hereto as Composite Exhibit
"C."
{26815995;6}
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AKERMAN SENTERFJTT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 4 of 37
limitation, all of Debtor's accounts, contract rights, general intangibles (including, but not limited
to income tax refunds, copy-rights, internet and website addresses and rights, license rights,
patent rights, trademarks and goodwill), chattel paper, equipment, machinery, instruments,
documents, books and records relating to aforementioned collateral, the bonds filed in the
Broward County Litigation, any recovery of monies or judgments in favor of the Debtor in the
Broward County Lawsuit, and any proceeds of the aforementioned collateral (all such personal
property, as the same existed on the Petition Date, together with all cash and non-cash proceeds
thereof, the "Pre-Petition Collateral").
I 0. In com1ection with the Debtor's proposed use of Cash Collateral hereunder and in
order to provide the Lender with adequate protection for the aggregate diminution of the Cash
Collateral resulting from the Debtor's use thereof, the Debtor has agreed, subject to approval of
this Court, that the Lender, shall have, nunc pro tunc as of the commencement of this Chapter II
case, a replacement lien pursuant to II U.S.C. 361(2) on and in all property of the Debtor
acquired or generated after the Petition Date, but solely to the same extent and priority, and of
the same kind and nature, as the property of the Debtor securing the prepetition obligations to the
Lender under the Pre-Petition Loan Documents.
11. For avoidance of doubt, the Lender shall not have or be granted a replacement
lien on or against any claims or causes of action arising under Sections 542 through 550 of the
Bankruptcy Code (the "Avoidance Actions") or on or against the proceeds of the Avoidance
Actions.
12. In the event that diminution occurs in the value of Cash Collateral from and after
the Petition Date as a result of the Debtor's use thereof in an amount in excess of the value of the
replacement liens granted herein, then the Lender shall be granted an administrative claim under
{26815995;6)
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 5 of 37
section 507(b) of the Bankruptcy Code with priority over all other administrative expense claims,
subject to the Carve Out, as hereinafter defined.
13. The Debtor proposed to use the Cash Collateral strictly in accordance with the
terms of that ce1iain Budget prepared by the Debtor. The Budget covers the 30 day period from
the Petition Date through the end of August 2013. The Debtor also requests that it be authorized:
(i) to exceed any line item on the Budget by an amount equal to ten percent (10%) of each such
line item; or (ii) to exceed any line item by more than ten percent (10%) so long as the total of all
amounts in excess of all line items for the Budget do not exceed ten percent (1 0%) in the
aggregate of the total Budget.
14. The Debtor requests that the replacement liens and administrative expense claims
granted to the Lender pursuant to the terms hereof be at all times subject and junior to: (i) the
fees of the Office of the United States Trustee pursuant to 28 U.S.C. 1930; (ii) any court costs,
and (iii) the fees and expenses for Court approved professionals for the Debtor in the amounts
and as set forth in the Budget (collectively, the "Carve Out").
15. Supplemental to the replacement liens provided to the Lender hereunder, the
Debtor will furnish the Lender with such financial and other information as required by the Pre-
Petition Loan Documents or other reports as the Lender reasonably requests.
16. The replacement liens granted to the Lender hereunder in connection with the use
of the Cash Collateral shall be valid and perfected without the need for the execution or filing of
any further documents or instruments.
{26815995;6}
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 6 of 37
APPLICABLE AUTHORITY FOR RELIEF REQUESTED
A. The Court Should Approve the Debtor's Requested Use of Cash Collateral
To The Extent That the Lender Consents to Such Use.
17. A debtor's use of estate propetiy is governed by Section 363 of the Bankruptcy
Code. Section 363( c )(I) provides that a debtor may use estate propetiy in the ordinary course of
business without notice or a hearing. Section 363( c )(2) imposes specific limitations upon
property that constitutes cash collateral and provides that a debtor can only use, sell or lease cash
collateral either if the entity with an interest in the cash collateral consents or the Comi
authorizes such use. As set forth in the First Day Declaration, the Debtor has been working with
the Lender over the past several months in connection with the exploring various alternatives
concerning the restructuring of the obligations owed the Lender. The Debtor intends to continue
to use its best efforts to explore a consensual agreement with the Lender regarding the proposed
use of Cash Collateral pursuant to this Motion. To the extent that the Debtor and the Lender can
reach such an agreement, this Court should approve the Debtor's use of the Lender's Cash
Collateral pursuant to Section 363( c )(2) of the Bankruptcy Code under the terms of any such
agreement.
B. The Court Should Enter an Order Authorizing the Continued Use of Cash
Collateral Because the Debtor Is Providing the Lender with Adequate
Ptoteetion.
18. Pursuant to the terms hereot; the Debtor is providing and will provide adequate
protection to the Lender as contemplated and required by Sections 361, 363(c)(2)(B) and 363(e),
respectively, and hereby seeks the Comi's approval thereof. The Bankruptcy Code does not
explicitly define "adequate protection," but does provide a non-exclusive list of the means by
which a debtor may provide adequate protection, including "other relief'' resulting in the
"indubitable equivalent" of the secured creditor's interest in such property. See 11 U.S.C. 361.
{26815995;6}
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 7 of 37
What constitutes adequate protection must be evaluated on a case-by-case basis. In re Swede/and
Dev. Group Inc., 16 F.3d 552, 564 (3d Cir. 1994) (citing In re O'Connor, 808 F.2d 1393, 1396-
97 (10
1
h Cir.l987)); In re Martin, 761 F.2d 472,476 (8
1
h Cir. 1985).
19. Adequate protection is meant to ensure that the secured lender receives the value
for which it originally bargained. Swede/and, 16 F.3d at 564 (citing O'Connor, 808 F.2d at
1396) ("the whole purpose of adequate protection for a creditor is to ensure that the creditor
receives the value for which he bargained pre bankruptcy"). Courts have noted that "the essence
of adequate protection is the assurance of the maintenance and continued recoverability of the
lien value during the interim between the filing ... and the confirmation." In re Arriens, 25 B.R.
79, 81 (Bania. D. Or. 1982). The focus of the requirement is to protect a secured creditor from
diminution in value during the use period. See In re Kain, 86 B.R 506, 513 (Bankr. W.D. Mich.
1988); In re Becker Indus. Corp., 58 B.R. 725, 736 (Bania. S.D.N.Y. 1986); In re Ledgmere
Land Corp., 116 B.R. 338, 343 (Bania. D. Mass. 1990).
20. The Debtor's requested use of Cash Collateral and the protections afforded to the
Lender herein, including but not limited to, replacement liens, monthly reporting as required
under the Loan Documents, and allowance of super priority administrative claims (to the extent
of any diminution in the Lender's collateral), in light of the circumstances, are reasonable,
appropriate, and sufficient to satisfY the legal standard of "adequate protection" and will serve to
maintain thf.' value of the Lender's Collateral.
(a) The Use of Cash Collateral Will !'reserve the Debtor's Going Concern
Value, Which Will Inure to the Benefit of the Estate.
21. The continued operation of the Debtor's business will preserve and maintain its
going concem, enterprise value and enable the Debtor to continue to operate and maximize its
value in the reorganization process. However, as discussed above, if the Debtor is not allowed to
{268!5995;6}
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 8 of 37
use Cash Collateral, its business operations will be substantially interrupted. This would result in
a significant diminution in the value of the Debtor's assets (including the Cash Collateral) to the
detriment of the Debtor's creditors and interest holders and other harm to the estate.
22. It is well established that a bankruptcy court, where possible, should resolve
issues in favor of preserving the business of the debtor as a going concern:
A debtor, attempting to reorganize a business under Chapter II,
clearly has a compelling need to use "cash collateral" in its eff011
to rebuild. Without the availability of cash to meet daily operating
expenses such as rent, payroll, utilities, etc., the congressional
policy favoring rehabilitation over economic failure would be
frustrated.
In re George Ruggiere Cluysler-Plymouth, Inc., 727 F.2d 1017,1019 (11
111
Cir. 1984).
23. Accordingly, comts authorize the use of cash collateral to enhance or preserve the
debtor's going concern value. For example, in In re Stein, 19 B.R. 458 (Bankr. E. D. Pa. 1982),
the comt allowed a debtor to use cash collateral where the secured party was undersecured,
finding that the use of cash collateral was necessary to the debtor's continued operations and the
creditor's "secured position can only be enhanced by the continued operation of the [debtor's
business]" !d. at 460; see also Federal Nat. Mort. v. Dacon Bolingbrook Assocs., 153 B.R. 204,
214 (N.D. Ill. 1993) (security interest protected to extent debtor reinvested rents in operation and
maintenance of the property); Inre Constable Plaza Assoc., 125 B.R. 98, 105 (Bankr. S.D.N.Y.
1991) (debtor's reinvestment of rents to maintain and operate office building "will serve to
preserve or enhance the value of the building which, in turn, will protect the collateral covered
by [the] mortgage"); In re Dynaco Cm]J., 162 B.R. 389, 395-96 (Bankr. D.N.H. 1983) (finding
that the alternative to the debtor's use of cash collateral, termination of its business, would doom
reorganization and any chance to maximize value for all creditors); In re Karl A. Neise, Inc., 16
B.R. 600, 602 (Bankr. S.D. Fla. 1981) (marginally secured creditor adequately protected by lien
{26815995;6}
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 9 of 37
on postpetition property acquired by debtor; debtor can use cash collateral "in the normal
operation of their business").
24. As discussed above, the Debtor will use Cash Collateral in the ordinary course of
its business to, among other things, continue to operate and maintain its operations in
anticipation of restructuring its debts through the reorganization process. If the Debtor cannot
continue to use Cash Collateral, it likely will be forced to cease operations and convert this cases
to Chapter 7. This cessation would irreparably damage the Debtor's business by causing, among
other things, employee attrition, lost revenues, loss of business reputation and loss of ability to
sell certain business segments. By contrast, granting authority will allow the Debtor to maintain
operations and preserve the going concern value of its business, which will inure to the benefit of
the Lender, all other creditors, and interest holders.
(b) The Lender is Adequately Protected by the Grant of Replacement
Liens on Post-Petition Assets and the Allowance of a Superpriority
Administrative Expense Claim.
25. The Bankruptcy Code expressly provides that "granting a replacement lien is a
means of adequate protection." 11 U.S.C. 361(2). Granting replacement liens provides ample
adequate protection of the secured creditor's interest in cash collateral. See, e.g., In re O'Connor,
808 F.2d at 1393; In re Dixie-Shamrock Oil & Gas. Inc., 39 B.R. 115, 118 (Bankr. M.D. Tenn.
1984). The Debtor will adequately protect the Lender's interests in Cash Collateral by, among
other things, providing post-petition security interests in the Debtor's assets of the same type as
the Lender held pre-petition to the extent the Debtor's use of Cash Collateral results in a post-
petition decrease in the value of the Collateral securing the Lender's claims. Such post-petition
security interests will be of the same validity and priority as the Lender's pre-petition liens and
security interests.
{26815995;6)
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 10 of 37
26. The Debtor believes that use of Cash Collateral pursuant to the terms and
conditions set forth above is fair and reasonable and adequately protects the Lender. The
combination of: (i) the Debtor's ability to preserve the going concern value of the business with
the use of Cash Collateral; (ii) the post-petition liens granted to the Lender; (iii) the right to
assert super-priority administrative expenses granted to the Lender herein, and (iv) providing the
Lender with the other protections set forth herein, including the availability of financial
reporting. For all of the reasons stated above, this Court's approval of the Debtor's use of the
Lender's Cash Collateral is proper herein.
27. A proposed Interim Order granting the Debtor's use of Cash Collateral on the
terms set forth herein is attached hereto as Exhibit "B."
WHEREFORE, the Debtor respectfhlly requests that the Court enter the Interim Order:
(A) authorizing the Debtor (i) to use the Cash Collateral ofthe Lender pursuant to the terms set
forth above and in accordance with the Budget, and (ii) to grant the replacement liens and super-
priority administrative expense claims as set forth above in connection with the use thereof, and
(B) setting a final hearing hereon approximately thirty (30) days after the entry of the Interim
Order on this Motion, and for such other and further relief as the Court deems just and proper.
Dated: July 31,2013.
(26815995;6)
Respectfully Submitted,
AKERMAN SENTERFITT
Proposed Attorneys for Debtor-in-Possession
350 East Las Olas, Blvd., Suite 1600
Ft. Lauderdale, Florida 33301
Tel: (954) 463-2700 I Fax: (954) 463-2224
By: Is! Eva/ Berger
Eyal Berger, Esq.
Florida Bar No. II 069
eya I. berger@akennan. com
Catherine Douglas, Esq.
Fla. Bar No. 85843
catherine.douglas@akennan.com
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600,350 EAST LAS 0LAS 80ULEVARO, FORT LAUOERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 11 of 37
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was served this
July 31, 2013 via CM/ECF and/or U.S. Mail upon all parties listed on the attached service list.
{26815995;6)
AKERMAN SENTERFITT
Proposed Attorneys for Debtor-in-Possession
350 East Las Olas, Blvd., Suite 1600
Ft. Lauderdale, Florida 3330 I
Telephone: (954) 463-2700
Facsimile: (954) 463-2224
By: /s/ Eva! Berger
Eyal Berger, Esq.
Florida Bar No. 11069
eyal. berger@akennan.com
Catherine Douglas, Esq.
Fla. Bar No. 85843
catherine.douglas@akerman.com
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600,350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 12 of 37
Christopher M. Verdini, Esq.
Patrick J. McElhinny, Esq.
Thomas E. Birsic, Esq.
Thomas M. Joseph, Esq.
K&L Gates LLP
K&L Gates Center
210 Sixth Avenue
Pittsburgh, P A 15222
SERVICE LIST
christopher. verdini@k I gates. com; patrick.mcelhinny@kl gates. com;
klgateseservice@klgates.com; tom.joseph@grantstreet.com
Counsel for Grant Street Group Inc.
Ari Newman, Esq.
Mark D. Bloom, Esq.
Greenberg Traurig PA
333 SE 2nd Avenue, Suite 4400
Miami, FL 33131
newmanar@gtlaw.com; bloomm@gtlaw.com
Counsel for Adilia Ente1prises, S.A.
Office of the US Trustee
USTPRegion21.MM.ECF@usdoj.gov
(26815995;6}
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AKERMAN SENTERFITT, LAS 0LAS CENTRE II, SUITE 1600, 350 EAST LAS 0LAS BOULEVARD, FORT LAUDERDALE, FL 33301-2999
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 13 of 37
EXHIBIT "A"
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 14 of 37
CASH COLLATERAL BUDGET: REALAUCTION.COM AUG
______ ---1-- ------------------
CASH IN BOA CHECKING
------------------RA FORECLOSURE AUCTION BILLINGS------- --
BAY
BREVARD TO
BROWARD
CHARLOTTE
CITRUSR4C
CITRUS TO
DADE
DADE TOM
DUVALR4C
DUVAL TO
ESCAMBIA
HILLSBOROUGH
INDIAN RIVER
LAKE TO
LEE R4C
LEE TO
MANATEE
MARION
MARTIN
OKALOOSA
ORANGER4C
OSCEOLA TO
PASCO
PINELLAS R4C
PINELLAS TO
POLKR4C
POLK TO
SARASOTA
VOLUSIAR4C
VOLUSIA TO
WALTON
0.00
5500.00
2500.00
48000.00
10000.00
3528.00
441.00
95000.00
31000.00
6000.00
21000.00
4000.00
1500.00
18000.00
2000.00
11000.00
9000.00
2000.00
4000.00
54000.00
1000.00
11000.00
21000.00
1000.00
13000.00
3626.00
13000.00
11000.00
2500.00
1000.00
TOTAL INCOME
-- 406595.00
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 15 of 37
EXPENSES
UNITED STATES TRUSTEE FEES
WINDROSE ATRIUM PROPERTIES INC -RENT
SAVANNAH- DENNIS MCCARTHY DBA-1099
POSTAGE I SHIPPING
DELL FINANCIAL
HUMANA EMPLOYEE INSURANCE PREMIUM
HUMANA EMPLOYEE INSURANCE PREMIUM 2
HUMANA EMPLOYEE MEDICARE PREMIUM
HUMANA EMPLOYEE DISABILITY INS
RA AND RR BRIDGEFIELD INS- WORKERS COMP
FRIINC
LEECH TISHMAN FUSCALDO & LAMPL-
BECK & THOMAS FEES
AKERMAN SENTERFITT FEES
HLB GRAVIER, LLP ACCOUNTANTS PA (Accountants)
MARC COMPANY CAR
LLOYD COMPANY CAR
PAYROLL MANAGEMENT
PAYROLL- W2 EMPLOYEES
PAYROLL CRAIG MCINTYRE (1099)-------------
PAYROLL GEEKARATI- OMAR AMARO (1099)-------------
PAYROLL THE VANN GROUP, LLC (1099)-------------
TEMP WORKERS(9)@ $151HR-40HRIWK1/WK2----
TEMP WORKERS (9)@ $151HR-40HRIWK3/WK4-----
FP&L ELECTRIC
NIGHT AND DAY PEST CONTROL
SPRINT NETWORK CARDS
AT&T PHONE
SONITROL ALARM SYSTEM
COM CAST
XO SPECIALIZED TELEPHONE SYSTEM
IT SUBSCRIPTION SERVICES
HARDWARE PURCHASING
SOFTWARE AND LICENSING
SSL AND DOMAIN LICENSING
EXPONENT (DATA RANDOM SORTS)
CRAIG MCINTYRE CINGULAR CELL
ACHDIRECT
NAP COMPUTERS TERRAMARK SERVER
AMEX I FIRST CARD CREDIT CARD
EMPLOYEE MONTHLY EXPENSE RPTS
TOTAL EXPENSES
NET CASH
13350.00
8000.00
200.00
13000.00
1600.00
864.00
3500.00
80000.00
1179.00
34000.00
-- 170000.00
7000.00
6000.00
6250.00
1500.00
60.00
100.00
350.00
225.00
2500.00
225.00
12500.00
7000.00
350.00
300.00
1500.00
3500.00
25000.00
2500.00
-- 402553.00
-4042.00
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 16 of 37
EXHIBIT " B"
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 17 of 37
In re:
UNITED STATES BANKRUJ>TCY COURT
SOUTHERN DISTRICT OF FLORIDA
Fort Lauderdale Division
www.flsb.uscourts.gov
Chapter 11
REALAUCTION.COM, LLC, Case No. 13-28260-RBR
Debtor.
- - - - - - - - - - ~ /
[PROPOSED] INTERIM ORDER (A) AUTHORIZING THE DEBTOR (1) TO USE
CASH COLLATERAL ON AN INTERIM BASIS PURSUANT TO 11 U.S.C. 363, AND
(2) TO PROVIDE ADEQUATE PROTECTION IN CONNECTION THEREWITH AND
PURSUANT TO 11 U.S.C. 361, AND (B) SETTING A FINAL HEARING PURSUANT
TO BANKRUPTCY RULE 4001
THIS MATTER was before this Court on August_, 2013 at 9:30a.m. upon the motion
(the "Motion")
1
of REALAUCTION.COM, LLC (the "Debtor"), as debtor-in-possession in the
above-captioned case for entry of an Order (A) Authorizing the Debtor (1}to use Cash Collateral
on an Interim Basis Pursuant to II U.S.C. 363 and (2) to Provide Adequate Protection in
1
Unless otherwise defined herein, all capitalized terms shall have the meaning ascribed to them in the motion.
{26816748;3}
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 18 of 37
Connection Therewith Pursuant to 11 U.S.C. 361, and (B) Setting a Final Hearing Pursuant to
Bankruptcy Rule 4001; the Court finding that it has jurisdiction over the matters raised in the
Motion pursuant to 28 U.S.C. !57 and 1334; this is a core proceeding pursuant to 28 U.S.C.
157(b )(2); the relief requested in the Motion is in the best of interests of the Debtor, its estate and
its creditors; proper and adequate notice of the Motion and the hearing thereon has been given
and that no other or further notice is necessary; and upon the record herein after due deliberation
thereon, good and sufficient cause exists for the granting of the relief as set f011h herein.
Accordingly, it is
ORDERED:
I. The Motion is GRANTED.
2. The Debtor is authorized to use Cash Collateral, as defined in 11 U.S.C. 363(a)
and in the Motion, on a preliminary basis through the date of the hearing set forth below and in
accordance with the Budget attached to the Motion.
3. The Debtor shall be authorized to exceed the amounts set forth in the Budget by
the sum of 110% of the disbursements projected in the Budget.
4. In connection with the Debtor's proposed use of Cash Collateral hereunder and in
order to provide the Lender with adequate protection for the aggregate diminution of the Cash
Collateral resulting from the Debtors' use thereof, the Lender, shall have, nunc pro tunc as of the
commencement of these Chapter II cases, a replacement lien pursuant to 11 U.S.C. 361 (2) on
and in all property of the Debtor acquired or generated after the Petition Date, but solely to the
same extent and priority, and of the same kind and nature, as the property of the Debtor securing
the prepetition obligations to the Lender under the Pre-Petition Loan Documents (the
"Replacement Liens").
{26816748;3}
- 2-
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 19 of 37
5. For avoidance of doubt, the Lender shall not have or be granted a Replacement
Lien on or against any claims or causes of action arising under Sections 542 through 550 of the
Bankruptcy Code (the "Avoidance Actions") or on or against the proceeds of the Avoidance
Actions.
6. In the event that diminution occurs in the value of Cash Collateral from and after
the Petition Date as a result of the Debtor's use thereof in an amount in excess of the value of the
Replacement Lens granted herein, then the Lender shall be granted an administrative claim under
section 507(b) of the Bankruptcy Code with priority over all other administrative expense claims,
subject to the Carve Out, as defined in the Motion. Notwithstanding anything herein to the
contrary, the Lender's super-priority administrative expense claim shall not attach to or be paid
from the proceeds of the A voidance Actions.
7. In addition to the Replacement Lens and super-priority administrative claims
provided to the Lender hereunder, the Debtor will furnish the Lender with such financial and
other information as required by the Pre-Petition Loan Documents or other reports as the Lender
reasonably requests.
8. The Replacement Liens granted to the Lender hereunder in connection with the
use of the Cash Collateral shall be valid and perfected without the need for the execution or
filing of any further documents or instruments.
9. This Order, together with the authorization to use Cash Collateral and the granting
of replacement liens pmsuant hereto, shall be with a full reservation of the rights of the Debtor
and the Debtor's bankruptcy estate to contest the extent, validity and priority of the debt owed,
and liens granted, to the Lender.
I 0. A further hearing, which may be a final hearing, on the relief sought
hereunder shall be held on _______ at _____ a.m./p.m. at the United States
(26816748;3}
- 3 -
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 20 of 37
Bankruptcy Court, 299 East Broward Blvd, Courtroom __ , Ft. Lauderdale, Florida 33301.
The Debtor shall serve copies of this Order upon the U.S. Trustee, all counsel of record, the
secured creditors, the top 20 unsecured creditors via U.S. mail immediately upon receipt hereof,
which shall constitute good and sufficient notice of the hearing.
Submitted by:
Eyal Berger, Esq.
AKERMAN SENTERFITT
Proposed Allorneys for Debtor-in-Possession
350 East Las Olas, Blvd., Suite 1600
Ft. Lauderdale, Florida 33301
Telephone: (954) 463-2700
Facsimile: (954) 463-2224
eyal.berger@akerman.com
Copy to: Eyal Berger, Esq.
###
(Attomcy Berger is directed to serve a conformed copy of this Order on all parties in interest)
{26816748;3}
- 4-
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 21 of 37
COMPOSITE EXHIBIT "C"
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 22 of 37

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR TilE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM
REGISTRATION UNDER THE FOREGOING LAWS. THE TRANSFER OF THIS
'
I NOTE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THIS NOTE, AND THE
ISSUER RESERVES TilE RIGHT TO REFUSE TilE TRANSFER OF THIS NOTE.
THIS IS NOT A NEGOTIABLE INSTRUMENT.
ANY UNITED STATES PERSON WIIO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS,
INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(1) AND 1287(11) OF
THE INTERNAL REVENUE CODE
PROMISSORY NOTE
U.S,$ 3,831,329.57 Issue Date: January :l, 2010
FOR VALUE RECEIVED, the undersigned, REALAUCTION.COM, LLC, a limited liability
company organized and existing under the laws of the State of Florida and having. its principal
place of business at 861 SW 78 Ave #I 02, Plantation FL 33324 (the "Issuer"), hereby promises
to pay to the order of ADILA ENTERPRISES, S.A., a company and existing under
the laws of the British Virgin Islands, or its assignee or "Holder"), on the Payment
Dates (the "Note"), the principal amount of Three Million Eight Hundred and Thirty-One
Thousand Three Hundred and Twenty-Nine U.S. Dollars and 57/100 Cents (U.S,$3,831,329.57)
(the "Principal AtnoWlt"), together with interest on the unpaid Principal Amount hereof at the
rate per annum equal to Sixteen Percent (16%).
I. Interest. Interest shall be equal to an amount determined for each day by
multiplying a daily interest factor (based on Sixteen Percent (16%) divided by 365) by the
Principal Amount outstanding for such day. Any interest accrued and not paid on December 31
of each year shall be added to and form part of the Principal Amount for the following year.
2. Payment Dates.
(a) One Million Two H\mdred and Six l11ousand Three Hundred and Twenty-
Nine U.S. Dollars and 57/100 Cents (U.S.$1,206,329.57) of the Principal Amount shall be due
and payable on December 31,2011.
(b) Interest accrued for the period January 1, 2010 through December 31,
2011 shall be due and payable on December 31, 2012.
(c) Interest accrued for the period January 1, 2012 through December 31,
2013 shall be due and payable on December 31, 2013.
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 23 of 37
(d) Interest accrued for the period January 1, 2014 through December 31,
2014 shall be due and payable on December 31,2014.
(e) The entire unpaid Principal Amount and any accrued and unpaid interest
then outstanding shall be due on October 18, 2014 or such earlier date as provided herein (the
"Maturity Date").
(f) The Issuer shall pay to the Payee a late charge of five percent (5%) of any
amount due that has not been paid to the Payee within ten (I 0) days of its Payment Date.
(g) All payments except for the payment described in section 2(a) shall be
applicable first to interest and then to principal.
(h) The Issuer shall pay all amounts owed under this Note in full when due
without set-off, counterclaim, deduction or withholding for any reason whatsoever.
(i) This Note may be prepaid on or before the Payment Dates without
penalty. All prepayments except for the payment described in section 2(a) be applied first to
Interest accrued to the date of prepayment and then to the Principal Amount.
3. Events of Default. The occurrence of any of the events set forth below in this
Section 3 shall be an "Event of Default" under this Note.
(a) Nonpayment. Failure to pay within thirty (30) days after the Payment
Dates of any Principal Amount or any interest accrued, as the case may be.
(b) Bankrup!Qy. The entry of an order for relief in a voluntary or involuntary
case involving the Issuer under title II of the United States Code, II U.S.C. 101, et seq. or
any other foreign, federal, or state bankruptcy, reorganization, receivership, insolvency or other
similar law.
(c) Dissolution or Liquidation. Tite liquidation, termination of existence,
dissolution, insolvency or business failure of the Issuer, or the appointment of a receiver or
custodian for the Issuer or all or substantially all of its properties.
4. Acceleratjon, If an Event of Default occurs and is continuing, then, and in every
such case, the Holder of this Note may, at its option, (a) declare the Principal Amount of this
Note to be due and payable immediately, by a notice in writing to the Issuer, and upon any such
declaration such Principal Amount shaH become immediately due and payable without
presentment, demand for payment, notice of acceleration, notice of intent to accelerate or other
notice of any kind, all of which the Issuer hereby expressly waives, (b) reduce any claim to
judgment, and/or (c) without notice of default or demand, pursue and enforce any other rights
and remedies available under applicable law, all of which rights shall be cumulative and may be
exercised successively or concurrently.
From and after any such Event of Default, and regardless of whether the Holder
also elects to accelerate the maturity of this Note, the entire Principal Amount remaining unpaid
hereunder shall bear an augmented annual interest rate equal to the lesser of (i) twenty-five
?
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 24 of 37
percent (25%) per annum or (li) the highest applicable lawful rate. Failure to exercise
option or any other rights the Holder may in the event of any such Event of Default. be
to, shall not constitute a waiver of tl1e right to exercise such option or any other nghts. m the
event of any subsequent Event of Default, whether of the same or different nature. No wa1vru of
any right or remedy by the Holder shall be effective unless made in writing and signed by the
Holder, not shall any waiver on one occasion apply to any future occasion.
If this Note is placed in the hand of an attorney for collection or is collected
through any legal proceeding, or in case it becomes necessary to protect the security hereof
(whether suit be brought or not), ti1e Issuer promises to pay (in addition to costs and
disbursements otherwise allowed) all costs of collection, including to the extent pennitted by
law, reasonable attorney's fees and court costs, including fees and costs incurred for any
appellate procedures.
In the event the interest provisions hruwf or any exactions provided for herein or
any other docnment related to the loan this Note evidences shall result for any reason at anytime
during the tenn of this Note in an effective rate of interest which transcends the limit of validity
prescribed by the applicable usury laws, then .iJllil facto the obligation to be fulfilled shall be
reduced to the limit of such validity, so that in no event shall any exaction be possible under this
Note that is in excess of the limit of such validity, but such obligation shaH be fulfilled to the
limit of such validity. In no event shaH the Issuer be bound to pay for the use or detention of ti1e
money loaned and evidenced hereby, or the Holder's forberu:ance ln collecting same, interest, or
payment in the nature of interest of more than the maxim\lffi rate lawfully collectible in
accordance with applicable usury laws; and the right to demand any such excess shall be and is
hereby waived.
5. Miscellaneous.
(a) Ooveming Law. This Note shall be governed by, and construed in
accordance with the laws of the State of Florida, except that Federal law shall apply to the extent
that lt may pennit interest to be charged at a rate higher than that which might otherwise be
pennissible under Florida law.
(b) Presentment. The Issuer and all persons liable or to become liable on thls
Note: (i) waive presentment, protest and demand, notice of protest, demand, maturity and
dishonor and nonpayment of this Note, and any other notice or further requirement necessary to
hold each of them liable for payment, and (ii) consent to any and all renewals and extensions in
time of payment hereof, and (iii) agree, further, that any time and from time to time and upon
notice, the tenns of payment herein may be modified without in any way affecting the liability of
any party to this Note or any person liable or to bccome liable with respect to MY Indebtedness
evidenced hereby.
(c) Assignment: TI1e Holder of this Note shall have the right to assign this
Note; provided, however, tilat the right to principal ot; and stated interest on this Note is not
negotiable by endorsement of the Holder or any assignee of the Holder urdess such endorsement
is accompanied by the following actions of the Issuer:
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 25 of 37
(i) The Issuer shall maintain a registry of the ownership of this Note
(the "Registry") and its principal office.
(ii) The Registry shall reflect Adlla Enterpises, S.A. as the original
Holder of this Note, and shall reflect such subsequent transferee as the Issuer shall receive o t i ~ e
thereof, by delivery to it of a certified copy of the assignment of the Note duly executed by the
then current Holder thereof.
(iii) Notices of the assignment of this Note shall be furnished by the
Holder {as reflected in the Registry) to the Issuer by certified or registered mail.
No transfer of this Note shall be valid unless reflected in the Registry in
accordance with the provisions of the above paragraph.
(d) Documentary Stamp Tax. This Note has been executed by the Issuer and
delivered by the Issuer to the Holder outside of the Slate of Florida. Accordingly, this Note is
exempt from Florida documentary stamp tax pursuant to Rule 12B4.053(34) of the Florida
Administrative Code.
[SIGNATURE PAGE FOLLOWS]
4
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 26 of 37
H.
WITNESS the due execution hereof this '" of February 2010, effective as of the date
first written above. -
MIA t80,400,485v2
REAI,AUCTION.COM, LLC, a Florida limited
liability C<Jmpany
---
Name: Lloyd B. McCiendonlll
Title: Manager
5
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 27 of 37
STATE OF FLORIDA UNIFORM COMMERCIAL CODE
FINANCING STATEMENT FORM
A NAME & DAYTIME PHONE NUMBER OF CONTACT PERSON
Erika G. Litvak, Esq. 305-579-0744
B. SEND ACKNOWLEDGEMENT TO;
Name
Address
Erika G. Litvak, Esq.
Greenberg Traurig, P.A.
Address 1221 Brickel: Avenue
Citv/State/Zin Miami, Florida 33131
TilE ABOVE SPACE IS FOil FILING OFVICE USE ONLY
ROAD TOWN
Tortuht CODE
4. This covers the
The property covered by this Financing Statement is described on Exhibit "A" attached hereto.
5. ALTERNATE DESIGNATION (if applicable) 0 LESSEE/LESSOR 0 CONSIGNEEICONSIGNORO BAILEEIUAILOR
0 AG. LIEN 0 NON-UCC FILING 0 SELLERIUUYER
6. Floridn DOCUMENTARY STAMP TAX- YOU ARE REQUIRED TO CHECK EXACTLY ONE BOX
t8J All documentary stAmps due and payable or to become due and payable pursuant to s. 201.22 F.S., have been paid.
0 Florida Documentary Stamp Tax is not required.
7. OPTIONAL FILER REFERENCE DATA
I
BRITISH
VIRGIN
STANDARD FORM -FORM UCC-1 (REV.OI/2009) Filing Office Cupy Approved by the Secretary ufState, Slate of FloridA
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 28 of 37
Exhibit "A" to UCC
Exhibit "A" UCC from REALAUCTION.COM, LLC. ("Debtor") and for the benefit of ADILA
ENTERPRISES, S.A. ("Secured Party").
Description of Collateral:
I. All accounts, now owned or hereafter acquired;
2. All contract rights, now owned or hereafter acquired;
3. All general intangibles, including but not limited to income tax refunds, copy-rights, internet and
website addresses and rights, license rights, patent rights, trademarks and good will, now owned
or hereafter acquired;
4. All chattel paper, now owned or hereafter acquired;
5. All equipment, including any accessions and additions thereto, now owned or hereafter acquired;
6. All machinery, including any accessions and additions thereto, now owned or hereafter acquired;
7. All instruments, whether negotiable or not, now owned or hereafter acquired;
8. All inventory, now owned or hereafter acquired;
9. All documents, now owned or hereafter acquired;
I 0. All books and records relating to the above-described Collateral;
The above types of collateral are as defined in Chapter 679, Chapter 677, and Chapter 671, Fla.
Stat. (1993), as amended from time to time.
II. All proceeds of the above-described collateral;
12. The Bonds filed in that certain case styled, GRANT STREET GROUP, INC., Plaintiff, vs.
REALAUCTION.COM, LLC, et al, Defendants, filed in the Circuit Court of the 17
111
Judicial
Circuit in and for Broward County, Florida, under Case No. 06-006743 (08) (the "Lawsuit"), and
the proceeds thereof, together with any other bond or cash which may be filed with the court in
said Lawsuit;
13. Any recovery of monies or judgments in favor of Debtor in said Lawsuit.
Any term above which is defined in the Florida Uniform Commercial Code ("UCC") has the meaning
given to the term in the UCC.
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 29 of 37
SECURITY AGREEMENT
(CHATTEL MORTGAGE)
THIS AGREEMENT, made this ! l i i W ~ day of March, 2010 (the "Effective Date"), under
the laws of the state of Florida between REALAUCTION.COM, LLC, a Florida limited liability
company, herein referred to as the Debtor, whose business addresses is 861 S.W. 78 Avenue, Suite
102, Plantation, FL 33324, and ADILA ENTERPRISES, S.A., a company organized under the
laws ofthe British Virgin Islands, herein called the Secured Party, whose address is: P.O. Box 146,
Road Town, Tortola, British Virgin Islands.
WITNESSETH:
To secure the payment of an indebtedness in the principal amount of $3,831,329.57 (the
"Principal Amount") with interest, payable as set forth in the promissory note payable as follows:
The note bears interest at a fixed rate of sixteen percent (16%) per annum. A payment of
One Million Two Hundred and Six Thousand Three Hundred and Twenty-Nine U.S.
Dollars and 57/100 Cents (U.S. $1,206,329.57) of the Principal Amount shall be due and
payable on December 31, 2011; a payment of interest accrued for the period January I,
2010 through December 31, 2011 shall be due and payable on December 31, 2012; a
payment of interest accrued for the period January I, 2012 through December 31, 2013
shall be due and payable on December 31, 2013; a payment of interest accrued for the
period January I, 2014 through December 31, 2014 shall be due and payable on
December 31, 2014; and the entire unpaid Principal Amount and any accrued and unpaid
interest then outstanding shall be due on October 18, 2014 or such earlier date as
provided in the Note.
as evidenced by a note dated January I, 20 I 0 (the "Note"), and also to secure any other
indebtedness or liability of the Debtor to the Secured Party direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, including all future advances
or loans which may be made at the option of the Secured Party, provided that any such advances or
loans are made in accordance with that certain Subordination Agreement by Financial Markets,
LLC, Secured Creditor, and Debtor dated as of the date hereof (the "Subordination Agreement"),
(all hereinafter called the "obligations"), Debtor hereby grants and conveys to the Secured Party a
security interest in, and mortgages to the Secured Party,
(a) the property described in the Schedule A attached hereto and incorporated herein
by reference (hereinafter called the "Collateral"), which collateral the Debtor
represents will be used primarily in business or other usc;
(b) all property, tangible and intangible, including accounts receivables, goods and
chattels of the san1e classes as those scheduled, acquired by the Debtor subsequent
to the execution of this agreement and prior to its termination;
(c) all proceeds thereof, if any; and,
(d) all increases, substitutions, replacements, additions and accessions thereto.
l
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 30 of 37
DEBTOR, WARRANTS, COVENANTS AND AGREES, SUBJECT TO THE TERMS AND
CONDITIONS OF THE SUBORDINATION AGREEMENT, AS FOLLOWS:
To pay and perform all of the obligations secured by this agreement according to their
terms.
To defend the title to the Collateral against all persons and against all claims and demands,
whatsoever, which Collateral, except for the security interest granted hereby, is lawfully owned by
the Debtor and is now free and clear of any and all liens, security interests, claims, charges,
encumbrances, taxes and assessments except as may be set forth in Schedule B.
On demand of the Secured Pruty to do the following: furnish further assurance of title,
execute any written agreement or do any other acts necessary to effectuate the purposes and
provisions of this agreement, execute any instrument or statement required by law or otherwise in
order to perfect, continue or terminate the security interests of the Secured Pruty in the Collateral
and pay all costs of filing in connection therewith.
To retain possession of the Collateral during the existence of this agreement and not to sell,
exchru1ge, assign, loan, deliver, lease, mortgage or otherwise dispose of same without the wtitten
consent of the Secured Party. The note secured hereby shall be due upon sale or transfer of the
Collateral.
To keep the Collateral at the location specified in the schedule and not to remove same
(except in the usual course of business for temporary petiods) without the prior wtitten consent of
the Secured Pruty.
To keep the Collateml free and clear of all liens, charges, encumbrances, taxes and
assessments, other than the first lien of Financial Markets, LLC.
To pay, when due, all taxes, assessments and collateral fees relating to the Collateral.
To keep the Collateral, at Debtor's own cost and expense, in good repair and condition and
available for inspection by the Secured Party at all reasonable times.
To keep the Collateral fully insured against loss by fire, theft and other casualties, Debtor
shall give immediate written notice to the Secured Party and to insurers of loss or damage to the
Collateral ru1d shall promptly file proofs ofloss with insurers.
Except for the security interests referred to in Schedule B, that the security interest granted
herein is a first lien (Chattel Mmtgage) encumbering the Collateral superior in right title and
interest to all other encumbrances upon the subject Collateral.
Except for the security interest granted to Secured Party as to the Collateral, and those
items referred to in Schedule B attached hereto and incorporated herein by reference, there have
been no other liens or security interests granted in the Collateral to any other patty, and no lien or
encumbrance exists against the Collateral. So long as the Note remains outstanding, Debtor shall
not mortgage, pledge or grant any other security interest or lien to any other pruty in or to the
2
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 31 of 37
Collateral without the prior written consent of Secured Party which consent may be granted or
withheld at Secured Party's sole and absolute discretion, except that Debtor may grant a first
priority security interest in the Collateral to Financial Markets, LLC.
So long as Debtor is not in default under the Note, this Security Agreement, or any other
loan documents made in connection with the Note (the "Other Loan Documents"), Debtor shall be
entitled to collect and retain all monies due it in connection with the Collateral and to continue to
enjoy all of its right and privileges in connection with the collection with the Collateral, and
Secured Patty shall have no right to enforce the provisions of the Collateral or of this Agreement
until Debtor is in default under the Note, this Security Agreement or any of the Other Loan
Docwncnts.
If a default occurs under the Note, the Security Agreement or any of the Other Loan
Docwnents beyond any applicable cure period (a "Default"), the Secured Party shall have the right,
but not the obligation, to enforce all remedies available to it under the Security Agreement, the
Other Loan Documents, and applicable law, including but not limited to Article 9 of the Florida
Uniform Commercial Code, and to receive any proceeds resulting from such enforcement; any
cash proceeds received may be applied in the same manner to principal and interest payments may
be applied under the Note and Security Agreement. Debtor shall be in default under this Security
Agreement upon the default in the payment or performance of any obligation, covenant or liability
contained or referred to herein or in the Note, this Security Agreement or any of the Other Loan
Documents, continuing beyond applicable cure periods, if any. Furthermore, a default hereunder
shall constitute a default under the Note, and the Other Loan Documents. In enforcing its rights
hereunder, Secured Party shall not be required to resmt to any particular security, right or remedy
or to proceed in any particular order of priority, or otherwise act or refrain from acting, but shall
have the right at any time and from time to time, in any mrumer and in any order to enforce its
security interests, liens, rights, and remedies, or any of them, pursuru1t to this Security Agreement
or any other instrument or otherwise including, but not limited to the Note and the Other Loan
Documents.
THE PARTIES FURTHER AGREE, SUBJECT TO THE TERMS AND CONDITIONS OF
THE SUBORDINATION AGREEMENT, AS FOLLOWS:
Waiver of or acquiescence in any default by the Debtor, or failure of the Secured Patty to
insist upon strict performance by the Debtor of any watl'atlties or agreements in this Security
Agreement, shall not constitute a waiver of any subsequent or other default or failure.
Notices to either party shall be in writing and shall be delivered personally or by mail
addressed to the party at the address herein set forth or otherwise designated in writing.
The Uniform Commercial Code shall govern the rights, duties and remedies of the parties
and any provisions herein dec!rued invalid under any law shall not invalidate any other provision
of this agreement.
Without limiting anything contained herein, the following shall also constitute a Default by
Debtor:
3
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 32 of 37
Failure to pay the principal or any installment of principal or of interest on the indebtedness
or any Note when due. Failure by Debtor to comply with or perform any provision of this
agreement. False or misleading representations or warranties made or given by Debtor in
connection with this agreement. Subjection of the Collateral to levy of execution or other judicial
process. Commencement of any insolvency proceeding by or against the Debtor. Any reduction in
the value of the Collateral or any act of the Debtor which imperils the prospect of full performance
or satisfaction of the Debtor's obligations herein. An adverse rnling in the appeal of that certain
case styled, GRANT STREET GROUP, INC., Plaintiff, vs. REALAUCTION.COM, LLC, et al,
Defendants, filed in the Circuit Court of the 17u' Judicial Circuit in and for Broward County,
Florida, under Case No. 06-006743 (08), entitling the Plaintiff therein to collect against the cah
bonds.
Upon any default of the Debtor and at the option of the Secured Patty, the obligations
secured by this agreement shall immediately become due and payable in full without notice or
demand and the Secured Party shall have the rights, remedies and privileges with respect to
repossession, retention and sale of the Collateral and disposition of the proceeds as are accorded by
the applicable sections of the Uniform Commercial Code respecting "Default" and under Florida
law.
Upon any default and upon demand, Debtor shall assemble the Collateral and make it
available to the Secured Party at the place and at the time designated in the demand. In connection
with any litigation regarding this agreement, the Secured Party shall be entitled to the appointment
of a receiver to take possession of and/or operate the Collateral.
Upon any default, the Secured Party's reasonable attorney's fees and the legal and other
expenses for pursuing, searching for, receiving, taking, keeping, storing, adve1tising, and selling
the Collateral shall be chargeable to the Debtor. In connection with any litigation regarding the
Note or this Security Agreement, the prevailing party shall be entitled to an award of costs and
attorneys' fees from the non-prevailing party.
The Debtor shall remain liable for any deficiency resulting from a sale of the Collateral and
shall pay any such deficiency forthwith on demand.
If the Debtor shall default in the performance of any of the provisions of this agreement on
the Debtor's part to be performed, the Secured Party may perform same for the Debtor's account
and any monies expended in so doing shall be chargeable with interest to the Debtor and added to
the indebtedness secured hereby, and in no event shall the Secured Party's performance constitute
a waiver of any rights contained herein.
The Secured Party is hereby authorized to file a Financing Statement.
The terms, warranties and agreements herein contained shall bind and inure to the benefit
of the respective parties hereto, and their respective legal representatives, successors and assigns.
The gender and number used in this agreement are used as a reference term only and shall
apply with the satne effect whether the parties are of the masculine or feminine gender, corporate
or other fmm, and the singulat shall likewise include the plural.
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Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 33 of 37
This agreement may not be changed orally.
This agreement shall be governed by, and construed in accordance with the laws of the
State of Florida, except that Federal law shall apply to the extent that it may permit interest to be
charged at a rate higher than that which might otherwise be permissible under Florida law.
The Debtor shall not have the right to assign this agreement. The Secured Party shall
have the right to assign this agreement at any time without the consent or any other action by
Debtor.
DEBTOR AND SECURED PARTY HEREBY MUTUALLY KNOWINGLY,
WILLINGLY AND VOLUNTARILY WAIVE THEIR RIGHT TO TRIAL BY JURY AND NO
PARTY NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR LEGAL REPRESENTATIVE OF
THE PARTIES (ALL OF WHOM ARE COLLECTIVELY REFERRED TO IN THIS
PARAGRAPH AS THE "PARTIES") SHALL SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEEDING BASED
UPON OR ARISING OUT OF THIS CHATTEL MORTGAGE, 11-!E NOTE OR ANY OF THE
OTHER LOAN DOCUMENTS OR ANY INSTRUMENT EVIDENCING, SECURING OR
RELATING TO THE INDEBTEDNESS OR OTHER OBLIGATIONS SECURED HEREBY OR
ANY RELATED AGREEMENT OR INSTRUMENT, ANY OTHER COLLATERAL FOR THE
INDEBTEDNESS SECURED HEREBY OR ANY COURSE OF ACTION, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITfEN) OR ACTIONS RELATING
TO TilE LOAN EVIDENCED BY THE NOTE OR THIS CHATTEL MORTGAGE. THE
PARTIES ALSO WAIVE ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL HAS NOT BEEN WAIVED. FURTHER, BORROWER AND LENDER EACH WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER
DAMAGES OTHER niAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE PROVISIONS
OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE PARTIES. 11-!E
WAIVER CONTAINED HEREIN IS IRREVOCABLE, CONSTITUTES A KNOWING AND
VOLUNTARY WAIVER, AND SHALL BE SUBJECT TO NO EXCEPTIONS. DEBTOR HAS
IN NO WAY AGREED WITH OR REPRESENTED TO SECURED PARTY OR ANY OTHER
PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the Parties have respectively signed and sealed these presents
the day and year first above \Witten.
WHNESSES: DEBTOR:
REALAUCTION.COM, LLC,
a Florida limited liability company
B y : ~ ~
Lloyd Earl McClendon, III, Manager
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Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 34 of 37
B k ~
Marc David Thomashaw, Manager
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Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 35 of 37
Print Name:. _______ _
Print Name:. _______ _
SECURED PARTY:
ADILA ENTERPRISES, S.A.,
a company organized under the laws of the British
Virgin Islands
BY: ___________ _
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Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 36 of 37
....------------------------.-
SCHEDULE A
I. All accounts, now owned or hereafter acquired;
2. All contract rights, now owned or hereafter acquired;
3. All general intangibles, including but not limited to income tax refunds, copy-rights, internet
and website addresses and rights, license rights, patent rights, trademarks and good will, now
owned or hereafter acquired;
4. All chattel paper, now owned or hereafter acquired;
5. All equipment, including any accessions and additions thereto, now owned or hereafter
acquired;
6. All machinery, including any accessions and additions thereto, now owned or hereafter
acquired;
7. All instruments, whether negotiable or not, now owned or hereafter acquired;
8. All inventory, now owned or hereafter acquired;
9. All documents, now owned or hereafter acquired;
10. All books and records relating to the above-described Collateral;
The above types of collateral are as defined in Chapter 679, Chapter 677, and Chapter 671, Fla.
Stat. (1993), as amended from time to time.
11. All proceeds of the above-described collateral;
12. The Bonds filed in that certain case styled, GRANT STREET GROUP, INC., Plaintiff, vs.
REALAUCTION.COM, LLC, et al, Defendants, filed in the Circuit Court of the 17
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h Judicial
Circuit in and for Broward County, Florida, under Case No. 06-006743 (08) (the "Lawsuit"),
and the proceeds thereof, together with any other bond or cash which may be filed with the
court in said Lawsuit;
13. Any recovery of monies or judgments in favor of Debtor in said Lawsuit.
Case 13-28260-RBR Doc 5 Filed 07/31/13 Page 37 of 37
.---------------
SCHEDULED
I. UCC-1 Financing Statement by Rea1auction.com, LLC, as debtor, and
Financial Services, LLC, as secured party, filed February 19,2010, under File
No. 201002034580, with the Florida Secured Transaction Registry;
2. UCC-1 Financing Statement by Realauction.com, LLC, as debtor, and Dell
Financial Services, L.P., as secured party, filed December 12, 2007, under File
No. 200604346172, with the Florida Secured Transaction Registry;
3. UCC-1 Financing Statement by Rcalauction.com, LLC, as debtor, and Dell
Financial Services, L.P., as secured party, filed January 12, 2007, under File
No. 200704570821, with the Florida Secured Transaction Registry;
4. UCC-1 Financing Statement by Realauction.com, LLC, as debtor, and Dell
Financial Services, L.P., as secured party, filed September 12, 2007, under
File No. 200706514538, with the Florida Secured Transaction Registry;
5. UCC- J Financing Statement by Realauction.com, LLC, as debtor, and Dell
Financial Services, L.P., as secured party, filed September 13, 2007, under
File No. 200706530045, with the Florida Secured Transaction Registry; and
6. UCC-1 Financing Statement by Realauction.com, LLC, as debtor, and Dell
Financial Services, L.P., as secured party, filed December 28, 2007, under File
No. 200707320222, with the Florida Secured Transaction Registry.
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