SECURED PROMISSORY NOTE
THIS PROMISSORY NOTE (the "Note") is made as of the 8th day of October,
1998, by and between American Resources and Development Company, a Utah
corporation whose address is 3855 South 000 Xxxx, Xxxxx # X, Xxxx Xxxx Xxxx,
Xxxx 00000 (hereinafter referred to as "Borrower") and Jordache Enterprises,
Inc., (hereinafter referred to as "Lender"), whose address is 0000 Xxxxxxxx,
00xx xxxxx, Xxx Xxxx, XX 00000.
RECITALS
For value received the undersigned, American Resources and Development
Company, promises to pay to the order of the Lender, Jordache Enterprises, Inc.
at the aforementioned address, or such other place that me be designated in
writing, by the Holder of this Note, the principal sum of ONE MILLION DOLLARS
($1,000,000.00 U.S.) with interest as set forth herein.
AGREEMENT
SECTION 1: LOAN TERMS
1.1 Note Advances Lender agrees to loan (the "Loan") to Borrower the
sum of One Million and no/100 Dollars ($1,000,000 U.S.) and Borrower promises to
repay, according to the following schedule:
Date of Advance Amount of Advance
October 8, 1998 $1,000,000
Note Term
The Note shall have a term of four (4) years, commencing October 8,
1998 and shall mature and become due on October 8, 2002.
1.3 Interest and Payment Considerations Interest shall accrue on all
sums outstanding at an annual rate equal to the prime rate as published by the
wall street journal from time to time plus one percent (1%). Interest shall be
paid to Lender, quarterly, on January 8, April 8, July 8 and October 8 until all
sums outstanding are paid in full, Borrower shall make payments of principal in
the amount of $250,000 in principal on October 8, 1999, October 8, 2000, October
8, 2001 and October 8, 2002. All payments received under this Note shall be made
in the form of lawful money of the United States of America. This Note may be
prepaid by Borrower, in whole or in part, without premium or penalty. All
prepayments shall first be applied to accrued interest and then to the unpaid
principal balance hereof.
1.4 Borrower's Pledge The advance of money pursuant to this Note shall
be secured by a stock pledge agreement (the "Stock Pledge") between Borrower and
Lender dated as of the date hereof pursuant to which pledges to Lender its
shares of stock in U.S. Polo Association, Ltd. U.S. Polo Association, Ltd., owns
the. rights, title and interest in the master license rights to the U.S. Polo
Association trademarks as evidenced by the Master License Agreement, dated
February 14, 1997, between Xxxxx, Inc. and USPA Properties, Inc. This Master
License Agreement was transferred to U.S. Polo Association, Ltd., on October 8,
1998. This stock pledge is documented in Exhibit A to this Note.
SECTION 2: DEFAULT AND LENDER'S RIGHTS
Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due; (b) Borrower breaks any promise
Borrower has made to Lender hereunder, or the Stock Pledge or otherwise defaults
under any term or provision of this Note or the Stock Pledge; or Borrower fails
to perform promptly at the time and strictly in the manner provided in this Note
or the Stock Pledge; (c) any representation or statement made or furnished to
Lender by Borrower or on Borrower's behalf is false or misleading in any
material respect; (d) Borrower becomes insolvent, a receiver is appointed for
any part of Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against Borrower
under any bankruptcy or insolvency laws; or (0 any creditor tries to take any of
Borrower's property on or in which Lender has a lien or security interest.
In the event of default, Lender may, at its option, take any or all of
the following actions: (a) declare the entire unpaid principal balance due under
this Note, together with all accrued unpaid interest, fees and costs thereon,
immediately due and payable, without notice; (b) declare any other indebtedness
owed from Borrower to Lender immediately due and payable, without notice;
Further, the Lender may hire or pay someone else to help collect this Note if
Borrower does not pay, which sums Borrower will reimburse to Lender. Such
reimbursable sums include, subject only to any limits under applicable law,
Lender's reasonable attorneys' fees and legal expenses whether or not there is a
lawsuit, including reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Lender may also take any other actions allowed by law or under this Note and the
other Notes relating to the indebtedness or the Stock Pledge.
The Borrower further agrees to pay interest on any amount of principal
of interest which is not paid when due whether at maturity or otherwise until
all amounts due and owing under this Note and the Stock Pledge are paid in
full, payable on demand, at a rate per month equal at all times equal to 2% of
such amounts due and owing; provided however, that in no event shall the Late
Charges payable hereunder exceed the maximum rate permitted by applicable law.
If from any circumstances whatsoever, fulfillment of any provision of this Note,
the Stock Pledge or any other document executed in connection with the loan
evidenced by this Note at the time performance of such provision shall be due,
shall involve a transcending of the limit of validity prescribed by law which a
court competent jurisdiction may deem applicable hereto, then ipso facto, the
interest rate shall be reduced to the limit of such validity and if, from any
circumstances whatsoever, the Lender shall ever receive as interest an amount
which would exceed the highest lawful rate, the receipt of such excesses shall
be credited against the principal balance due on this Note and any other
obligations of the Borrower to which the same may lawfully be credited, and any
portion of such excess not capable of being so credited shall be related to the
Borrower.
The Borrower hereby waives presentment for payment, notice of dishonor,
protest and notice of protest. If the Borrower consists of more than one person
or party, the obligations and liabilities of each such person or party shall be
joint and several.
SECTION 3: AFFIRMATlVE COVENANTS
Borrower covenants that so long as Borrower is indebted to Lender,
Borrower will:
3.1 Perform each and every covenant contained in this Note and
other loan documents in any way relating to this Note.
3.2 Promptly inform Lender of any litigation, or of any claim or
controversy which might become the subject of litigation against Borrower.
3.3 Promptly furnish to Lender, at Lender's request, financial
information concerning the assets, liabilities, operations and transactions
of Borrower as Lender may from time to time reasonably request.
3.4 Preserve and maintain all licenses, privileges, franchises,
certificates and the like necessary for the operation of Borrower's
business, including, but not limited to the license granted pursuant to the
Master License Agreement.
SECTION 4: SURVIVAL
The representations, warranties, covenants, Note and indemnities
included or provided for in this Note, or in any exhibit, document, certificate
or other instrument delivered pursuant to this Note, shall survive the delivery
of any instrument or document to be delivered under this Note.
SECTION 5: NOTICES
All notices, consents, waivers and other communications under this Note
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below (
or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):
IF TO BORROWER:
American Resources and Development Company
0000 Xxxxx 000 Xxxx, Xx. X
Xxxx Xxxx Xxxx, Xxxx 00000
ATTN.: Xxx Xxxxxxxxx
Facsimile No. 000-000-0000
IF TO LENDER:
Jordache Enterprises, Inc.,
0000 Xxxxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, XX 00000
ATTENTION: Xxxxxx X. Xxxxxxxxxx, Esq.
Facsimile No. 000-000-0000
SECTION 6: AMENDMENTS
This Note may not be altered or amended, nor any rights hereunder be
waived, except by an instrument in writing executed by both parties hereto. No
waiver of any term, provision or condition of this Note, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, provision or condition or as a waiver or any other
term, provision or condition of this Note.
SECTION 7: HEADINGS
The headings of the sections of this Note are for guidance and
convenience of reference only and shall not limit or otherwise affect any of the
terms or provisions of this Note.
SECTION 8: GOVERNING LAW
This Note and the transaction described herein shall be construed
exclusively in accordance with, and governed by, the substantive laws of the
State of New York. Both parties agree that any action to enforce this Note must
be brought within the State of New York and both parties consent to jurisdiction
and venue in the County of New York and the State of New York.
SECTION 9: COSTS AND LEGAL FEES
If any party is required to take any action to enforce its rights under
this Note as a result of a breach of another party, whether or not a suit or
other legal action is initiated, the breaching party shall reimburse and pay the
non-breaching party promptly upon demand all fees and costs incurred by the
non-breaching party in connection with such action, including, without
limitation, reasonable attorneys' fees and court costs.
SECTION 10: SEVERABILITY
Any provision of this Note that is prohibited or unenforceable in any
jurisdiction shall be ineffective in such jurisdiction only to the extent of
such prohibition or unenforceability without affecting the remaining provisions
of this Note.
SECTION 11: PARTIES IN INTEREST
This Note shall be binding upon, and shall inure to the benefit of, the
parties hereto and, except as otherwise prohibited, their respective successors
and assigns. Nothing contained in this Note, express or implied, is intended to
confer upon any other person or entity any benefits, rights or remedies.
SECTION 12: ENTIRE AGREEMENT
This note constitutes the final understanding between the lender and
the borrower and may not be contradicted by evidence of any alleged oral
agreements.
SECTION 13: ASIGNMENT
Borrower may not assign this Note to any party without Lender's prior
written consent, which consent may be withheld for any or no reason. Any
purported assignment by Borrower shall be deemed null and void and of no force
or effect. Lender may assign this Note without the Consent of Borrower.
IN WITNESS WHEREOF, this Note has been duly executed as of the day and
year first above written.
LENDER
/s/ Xxxxxx Xxxxxxxxxx
BORROWER
/s/ Xxxxxx Xxxxx
Vice President
CORPORATE ACKNOWLEDGEMENT
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX
Xx the 8th day of October, 1998, before me personally came XXXXXX XXXXX, to me
known, who, being by me duly sworn, did depose and say that he resides at 0000
Xxxxxxxx, Xxx Xxxx, XX, that he President of AMERICAN RESOURCES AND DEVELOPMENT
COMPANY, the corporation described herein, and which executed the foregoing
instrument; that he signed his name thereto by order of the board of directors
of said corporation.
Sworn to before me this
8th day of October 1998
/s/ Xxxxxxx Xxxxxx
Notary Public
XXXXXXX XXXXXX
NOTARY PUBLIC, State of New York
No. 43803669
Qualified in Richmond & N. Y. Counties
Commission Expires Dec. 31, 1998
CORPORATE ACKNOWLEDGEMENT
XXXXX XX XXX XXXX
XXXXXX XX XXX XXXX
Xx the 8th day of October, 1998, before me personally came XXXXXX X.
XXXXXXXXXX, ESQ., to me known, who, being by me duly sworn, did depose and say
that he resides at 0000 Xxxxxxxx, Xxx Xxxx, XX, that he Assistant Secretary of
JORDACHE ENTERPRISES, INC. the corporation described herein, and which executed
the foregoing instrument; that he signed his name thereto by order of the board
of directors of said corporation.
Sworn to before me this
8th day of October 1998
/s/ Xxxxxxx Xxxxxx
Notary Public
XXXXXXX XXXXXX
NOTARY PUBLIC, State of New York
No. 43803569
Qualified in Richmond & N. Y. Counties
Commission Expires Dec. 31, 1999
