Loan Agreement
This loan agreement (the "Agreement" or the "Loan Agreement") is entered
into by and between The Yankee Companies, LLC., a Florida limited liability
company ("Yankees"), and Explorations Group, Inc., a Delaware corporation
("Explorations"), (Yankees and Explorations being sometimes hereinafter
collectively referred to as the "Parties" and each being sometimes hereinafter
generically referred to as a "Party").
Preamble:
WHEREAS, Explorations requires significant capital for miscellaneous
corporate purposes; and
WHEREAS, Explorations is willing to pledge all of its assets, wherever
located or whenever acquired, as security for such financing (the "Collateral");
and
WHEREAS, subject to the following terms and conditions, Yankees is willing
to loan Explorations a sum of up to $100,000, on a revolving basis, upon the
collateral security of the Collateral, subject to the terms and conditions set
forth below:
NOW, THEREFORE, in consideration of the sum of $10, other good and valuable
consideration, the receipt of which is hereby acknowledged, and, upon the mutual
covenants and conditions contained herein, the Parties hereby agree as follows:
Witnesseth:
1. DEFINITIONS & INTERPRETATION
(a) Definitions:
The following terms, whether or not initially capitalized, will have
the meanings set forth below:
(1) Accredited Investor A person or entity that meets the asset,
income or other requirements for treatment as an accredited
investor specified in Rule 501 of Commission Regulation D
promulgated under the Securities Act
(2) Affiliate:
An entity or person that controls, is controlled by or is under
common control with another person.
(3) Explorations:
The term for Explorations Group, Inc., a publicly held Delaware
corporation and a Party to this Agreement, together with all of
its subsidiaries.
(4) Explorations Financial Statements:
Financial statements, including all related schedules and the
Notes thereto, of Explorations included in Exploration's last
report filed on Commission Form 10-KSB; the reports on Commission
Form 10-QSB filed subsequent thereto and the financial statements
for subsidiaries subsequently acquired by Explorations included
in current reports on Commission Form 8-K filed since the dates
of the Subsequent Quarterly Reports (the "Subsequent Current
Reports"); all such financial statements being hereinafter
collectively and generically referred to as the
"ExplorationsFinancial Statements,"
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(5) Capital Stock:
The generic term used for equity securities, whether common,
preferred or otherwise.
(6) Collateral:
All of Exploration's assets, whenever acquired or wherever
located, whether real or personal, tangible or intangible,
current or inchoate, including, without limitation, all of the
Capital Stock of its subsidiaries, rights under agreements,
notes, financial accounts, intellectual property rights and all
other things of whatever nature which the Parties may define as
Collateral subject to this Agreement in any future agreements.
(7) Commission:
The United States Securities and Exchange Commission.
(8) Code:
The Internal Revenue Code of 1986, as amended.
(9) Default:
The occurrence of any of the following events during the term of
this Agreement or any extensions or renewals thereof:
(A) The failure of Explorations to pay any amount when due
hereunder for a period of 20 business days after written
notice by Yankees to Explorations;
(B) The failure by Explorations to perform any material
agreement or material undertaking under this Agreement or
any other material agreement or material document given to
evidence or secure any of the Secured Obligations;
(C) The material inaccuracy of any warranty, representation,
covenant or agreement made by Explorations to Yankees under
this Agreement relating to any related document or this
Agreement, at the time when made;
(D) Exploration's insolvency, termination of business as a going
concern or inability to pay debts generally as they become
due;
(E) The filing of a petition or order for relief under the
bankruptcy laws or insolvency laws or for reorganization,
composition, adjustment, or other relief of debtors under
any law by or against Explorations if such petition is not
dismissed within 30 days;
(F) The making of an assignment for the benefit of creditors by
Explorations , or the appointment of a receiver or
liquidator for Explorations ;
(G) The order by a court of competent jurisdiction winding up,
or liquidation of, the affairs of Explorations ;
(H) The dissolution of Explorations ; or
(I) The initiation of a lawsuit or quasi-judicial or
administrative proceeding by any person or entity or
governmental instrumentality against Explorations or any
part of the Collateral; or
(J) Any event defined as a default under any of the agreements,
Notes or instruments ancillary to this Agreement.
(10) Exchange Act:
The Securities Exchange Act of 1934, as amended.
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Page 118
(11) Exchange Act Reports:
All reports filed by Explorations with the Commission pursuant to
Sections 12(g), 13 and 15(d) of the Exchange Act.
(12) GAAP:
Generally accepted accounting principles, consistently applied.
(13) Initial Funding Installment:
The aggregate sum already advanced to or on behalf of
Explorations as of the date of this agreement.
(14) IRS:
The United States Internal Revenue Service.
(15) Knowledge:
When used to qualify a representation or warranty, the word
"knowledge" or any derivations or variations thereof, whether in
the form of a word or phrase, will mean knowledge after
reasonable inquiry by an executive officer of the legal entity on
whose behalf the assertion is made and will include information
that such legal entity should have had in the exercise of
reasonable diligence.
(16) Loans:
The funds advanced by Yankees to Explorations from time to time,
including all funds heretofore advanced by Yankees to
Explorations , which are the objects of this Agreement.
(17) Material:
When used to qualify a representation or warranty, the word
"material" or any derivations or variations thereof, whether in
the form of a word or phrase, will mean a variance that could
have negatively affected a decision by a reasonably prudent
person to engage in the transactions contemplated by this
Agreement, and will be measured both on the occasion in which
such term is referenced as well as on an aggregate basis with
other similar matters.
(18) NASD:
The National Association of Securities Dealers, Inc., a Delaware
corporation and self regulatory organization registered with the
Commission.
(19) Note(s):
The negotiable instruments in the form of promissory notes issued
to evince the Loans, substantially in the form annexed hereto and
made a part hereof as exhibit 1(a)(19).
(20) Obligations:
Yankees rights and Exploration's duties under this Agreement and
the ancillary instruments referred to herein, including, without
limitation, the Note(s) to be executed from time to time by
Explorations in favor of Yankees, as described in this Agreement
executed concurrently herewith and incorporated by reference
herein, together with all other indebtedness of Explorations or
its affiliates to Yankees, direct or indirect, primary or
secondary, fixed or contingent, or otherwise due or to become due
now existing or hereafter acquired.
(21) OTC Bulletin Board:
The over the counter electronic securities market operated by the
NASD.
(22) Secured Obligations:
All indebtedness and other obligations of Explorations to Yankees
under or arising out of this Agreement, including any currently
outstanding or future loans, or any extensions or renewals
thereof.
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(23) Securities Act:
The Securities Act of 1933, as amended.
(24) Subsequent Current Reports:
Exploration's reports on Commission Form 8-K filed after the
Subsequent Quarterly Reports but prior to the date of this
Agreement.
(25) Subsequent Quarterly Reports:
Exploration's reports on Commission Form 10-QSB for the quarterly
periods following Exploration's last 10-KSB filed with the
Commission.
(26) Substantial Compliance:
Compliance which the Party for whose benefit or at whose request
an act is performed, or for whose benefit or at whose request an
act is refrained from, could under the circumstances be
reasonably expected to accept as full compliance.
(27) Tax:
For the purposes of this Agreement, a "Tax" or, collectively,
"Taxes," means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties,
impositions and liabilities, including taxes based upon or
measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under
any agreements or arrangements with any other person with respect
to such amounts.
(b) Interpretation
(1) When a reference is made in this Agreement to schedules or
exhibits, such reference will be to a schedule or exhibit to this
Agreement unless otherwise indicated.
(2) The words "include," "includes" and "including" when used herein
will be deemed in each case to be followed by the words "without
limitation."
(3) The captions in this Agreement are for convenience and reference
only and in no way define, describe, extend or limit the scope of
this Agreement or the intent of any provisions hereof.
(4) All pronouns and any variations thereof will be deemed to refer
to the masculine, feminine, neuter, singular or plural, as the
identity of the Party or Parties, or their personal
representatives, successors and assigns may require.
(5) The Parties agree that they have been represented by counsel
during the negotiation and execution of this Agreement and,
therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an
agreement or other document will be construed against the party
drafting such agreement or document.
2. LOANS.
Subject to the terms of this Agreement,Yankees agrees to lend Explorations,
on the terms hereof, the sum of no more than $100,000 on a revolving basis
(the "Loan(s)"), as follows:
(a) The obligations of Yankees to loan funds to Explorations shall
commence on the date hereof and shall terminate as provided in Section
3, at which time all outstanding loans hereunder must be repaid,
together with accrued interest.
(b) Loans hereunder will be made in $10,000 increments, and each loan will
be represented by its own separate negotiable Note and security
agreement.
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(c) Each Note shall be:
(1) For a term of one year; shall bear interest at the annualized
rate of 2% over the prime rate charged during the subject period
by Citibank, N.A. (New York City) to its most favored corporate
borrowers for unsecured obligations having a term of one year or
less; and shall be payable upon demand after the one year term;
(2) Secured by a security interest in all of Exploration's assets,
including after acquired assets, subject only to the prior liens
reflected in exhibit 2.1(c)(2) annexed hereto and made a part
hereof and to the sale of assets in the ordinary course of
business, provided that the proceeds of such sales are
re-invested in inventory or used to pay operating expenses of
Explorations , it being the intent of the Parties that no
proceeds be used for payment of dividends or unusual compensation
to the principals of Explorations .
(d) Explorations shall be directly responsible for payment of all taxes,
fees and recording costs associated with the Loans, the hereinafter
described Notes, required stock transfers, UCC-1 financing statement,
security agreements and collateral assignments.
(e) This Agreement is being executed simultaneously with a Security
Agreement, a UCC-1 financing statement , and a Note the terms and
conditions of which are all incorporated by reference herein.
3. TERM.
(a) This Agreement shall commence on the date hereof and shall terminate
on the 730th day after its execution, provided that it shall be
automatically renewed thereafter on a continuing one year basis unless
the Party desiring not to renew provides the other with written notice
of intent not to renew at least 60 days prior to the end of the
then-current term or renewal term.
(b) Notwithstanding the foregoing, this agreement will terminate on the
occurrence of the following events:
(1) The date of the full and complete discharge by Explorations of
all obligations to Yankees under this agreement;
(2) The completion of a public offering of securities yielding at
least $2,000,000 in net proceeds by Explorations or any corporate
entity with which Explorations becomes subject to a
reorganization under Section 168 of the Code;
(3) Upon the occurrence of a Default by Explorations provided that
Yankees elects to terminate this agreement by reason of such
default.
4. RIGHT OF FIRST REFUSAL
(a) Throughout the term of this Agreement and any renewals thereof,
Yankees shall have a right of first refusal to provide any debt or
debt-equity hybrid financing required by Explorations and its
subsidiaries (the "Right of First Refusal").
(b) In the event that Explorations has a definite opportunity to obtain
financing from some person or entity other that Yankees, it shall
reduce such offer to written form specifying each and every applicable
term and identifying the person or entity involved (the "Notice of
Offer") and shall provide the Notice of Offer to Yankees in the manner
generally hereinafter provided for submission of notices.
(c) Within ten business days following receipt of a Notice of Offer,
Yankees shall, by written response to Explorations in the manner
generally hereinafter provided for submission of notices either:
(1) Consent to the proposed funding;
(2) Request additional data, which Explorations shall immediately
provide; or
(3) Agree to provide the funding on the terms contained in the Notice
of Offer.
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(d) In the event that Yankees demands additional data, the ten business
days response period shall not commence until Yankees is provided with
the required data.
(e) If Yankees has been provided with all required data but has not
responded to the Notice of Offer within the ten business days response
period, it shall be presumed that Yankees has consented to the
funding; however, no consent to funding or presumed consent to funding
shall result in the waiver of Yankees' Right of First Refusal to
provide any future funding.
(f) In the event that the terms of the proposed funding vary in any
material manner from the terms described in the Notice of Offer, then
any consent or presumed consent shall be deemed void and Exploration
swill be required to notify Yankees of such change and resubmit Notice
of Offer to Yankees, on the revised basis, and subject to the terms in
this Section.
5. CONDITIONS PRECEDENT.
The obligation of Yankees to make the Loan shall be subject to the
following conditions:
(a) There shall have occurred no material adverse change in the business
or the financial condition of Explorations since the date of the
latest financial information filed by Explorations with the
Commission, copies of which shall be contemporaneously furnished by
Explorations to Yankees;
(b) All acts, conditions and things (including the obtaining of any
necessary regulatory approvals and the making of any required filings,
recordings or registrations) required to be done or performed and to
have happened precedent to the execution, delivery and performance of
this Agreement and the related security agreements, collateral
assignments and Notes shall have been done and performed to the
satisfaction of Yankees and its legal counsel;
(c) All corporate and legal proceedings and all documents and instruments
in connection with the authorization of this Agreement and the related
security agreements, collateral assignments and Notes and all related
instruments and ancillary documentation thereto shall have been
delivered to Yankees and its legal counsel, and Yankees shall have
received all information and copies of all other related documents and
instruments, including records of corporate proceedings, which Yankees
and its legal counsel may reasonably have requested in connection
therewith, such documents and instruments, where appropriate, to be
certified by proper corporate or governmental authorities;
(d) Yankees shall have received the duly executed originals of this
Agreement and the related security agreements, collateral assignments
and Notes and all related ancillary documentation thereto and copies
or originals of all other documents, agreements and instruments
relating to any aspect of the transactions contemplated hereby,
including evidence of insurance coverage required by Yankees; and
(e) Yankees shall have received, in form and substance satisfactory to
Yankees and its legal counsel, such legal opinions, consents, and/or
additional documents relating to any of the foregoing which it may
reasonably require.
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6. MANDATORY PREPAYMENT IN THE EVENT OF LOSS; LOAN REPAYMENT.
(a) Explorations shall keep all of the Collateral (as that term is defined
herein and from time to time in documents entered into by the Parties)
fully insured under all risk insurance policies acceptable in form and
substance to Yankees, such insurance to be in an amount adequate to
fully replace all the Collateral in the event of its damage or loss.
(b) In the event that the Collateral shall be lost, stolen, destroyed,
damaged beyond repair or rendered permanently unfit for normal use, or
in the event of any condemnation, confiscation, seizure, or
requisition of title to or use of the Collateral, Explorations agrees
to make available any insurance proceeds for the exclusive purpose of
replacing the Collateral.
(c) If, however, Explorations elects not to repair or replace the
Collateral within 30 days of Exploration's receipt of the insurance
proceeds, all insurance proceeds shall be applied to a then-mandatory
prepayment of the Secured Obligations by paying in full an amount
determined by:
(1) Obtaining a fraction, the numerator of which will be the total
number of payments remaining due on the Note unpaid after such
prepayment is made (including the payment, if any, due on the
date on which prepayment is made) multiplied by the actual dollar
amount of each payment due and the denominator of which shall be
the total number of payments required to be paid under the Note,
multiplied by the actual dollar amount of each payment due under
the Note;
(2) Multiplying the resultant fraction by 10%;
(3) Multiplying the resulting percentage by the outstanding balance
due on the Note on the date of such prepayment;
(4) Adding the resulting dollar amount to the outstanding balance
then due on the Note (such aggregate sum being the mandatory
prepayment required to be paid hereunder).
(d) Notwithstanding the foregoing, Yankees shall be named as the primary
beneficiary on all insurance policies carried by Explorations which
directly, indirectly or incidentally cover the Collateral.
7. PLACE OF PAYMENTS.
Payment of principal, interest and other sums due or to become due with
respect to the Loan and all the Secured Obligations are to be made at the
principal executive offices of Yankees, or such other place as Yankees shall
designate to Explorations in writing, in lawful money of the United States of
America in immediately available funds.
8. LATE PAYMENTS & OTHER CHARGES.
(a) If any installment or other amount due with respect to the repayment
of the Loan or any portion of the Secured Obligations is not paid when
the same shall be due, Exploration swill pay interest on any such
overdue amount at the highest rate permitted by law until the date
such amount is paid.
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(b) Explorations shall pay or cause to be paid, in addition to all other
amounts payable hereunder:
(1) Premiums for insurance required to be obtained in connection with
the Loan and the Collateral;
(2) Fees paid for filing documents in public offices in connection
with the Loan and the transactions contemplated hereby; and
(3) Actual expenditures, including reasonable attorney's fees, for
proceedings to collect the Secured Obligations or to enforce,
preserve and protect the Collateral (as such term is defined
herein) and the rights and interest of Yankees therein.
9. ASSIGNMENT, GRANT OF SECURITY INTEREST & LIMITED SUBORDINATION.
(a) As collateral security for the payment of the Secured Obligations,
Explorations , for the benefit and enforcement of its payment of the
Secured Obligations, hereby sells, assigns, and transfers to Yankees,
its successors and assigns, and grants to Yankees, a continuing first
priority security interest in and to all of its present and future
right, title and interest in and to all of its securities in other
corporations (including subsidiaries), assets, receivables, chattel
paper and all cash and non-cash proceeds (including proceeds of
insurance), subject only to the prior liens reflected in exhibit
2.1(c)(2).
(b) (1) Subject to cancellation for any future financing upon provision
of written notice to such effect by Yankees, Yankees hereby and
herewith subordinates the obligation to receive payments under
the Notes to any institutional lender where such financing is
required by Explorations for the development of corporate
property, provided such property is increased in value by an
amount equal to or greater than the amount of the subordinated
loan and that Yankees' legal counsel has ratified all documents
and instruments pertaining to such financing, including
associated mortgages, collateral assignments and security
instruments.
(2) Notwithstanding the security interests held by Yankees,
Explorations shall be permitted to make purchases and sales, and
to pay operating expenses, as incurred in the ordinary course of
business, provided, however, that until all obligations to
Yankees have been completely discharged by full payment,
Explorations shall make no distributions to stockholders, or
repay any obligations to stockholders except normal and
reasonable salaries for services in fact rendered to
Explorations(it being understood that the term "stockholders"
applies to the stockholders of Explorations and to the
stockholders of any corporate entity that may subsequently
acquire Explorations ).
(c) Notwithstanding the foregoing:
(1) Yankees' agreement to subordinate its rights under its Loans to
Explorations shall not apply to the first lien on any property
other than that directly benefitted by such acquisition and
development financing and, in no event, shall Yankees' first lien
on all of the authorized capital stock of Exploration's
subsidiaries be subordinated to any other entity, whether
private, public or governmental.
(2) No subordination permitted pursuant to this Section shall be
effective until Yankees has been provided with copies of all
documentation pertaining to the subject acquisition or
development financing and Yankees' legal counsel has agreed to
the form and substance thereof, which agreement may not be
unreasonably withheld.
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10. RIGHTS AND POWERS WITH RESPECT TO THE COLLATERAL.
Explorations hereby authorizes Yankees to do every act and thing in the
name of Explorations or Yankees or otherwise which Yankees may deem advisable to
enforce effectively its rights and interest in and to the Collateral, and
Explorations hereby irrevocably appoints Yankees, with full power of
substitution and delegation, as its true and lawful attorney-in-fact, with full
right to demand, enforce, collect, receive, receipt and give releases for any
funds due or to become due under or arising out of or with respect to, any of
the Collateral and to endorse all deeds, notes, receipts, checks, stock
certificates and other instruments, and to do and take all such other actions
relating to any of the Collateral, to file any claims or institute any
proceedings with respect to any of the foregoing which Yankees deems necessary
or advisable and to compromise any such demand, claim or action.
11. ASSIGNMENTS, ENCUMBRANCES, TRANSFERS.
(a) Exploration swill not, without the prior consent of Yankees, assign or
transfer any of its rights or delegate any of its obligations with
respect to this Agreement or sell, dispose or otherwise grant any
interest in or to any of the Collateral, incur or suffer to exist any
lien, charge, mortgage, security interest or encumbrances upon any of
the Collateral, except the lien of Yankees created by this Agreement.
(b) In the event of any conveyance, foreclosure or other disposition of
the Collateral without Yankees's consent, then the entire principal
balance, together with all accrued interest shall be immediately due
and payable.
12. ACKNOWLEDGMENTS, REPRESENTATIONS AND WARRANTIES.
Explorations acknowledges, represents and warrants that:
(a) As of the date of this Agreement, Explorations is not insolvent within
the meaning of applicable state and federal laws dealing with debtors
and creditors, including the Federal Bankruptcy Code;
(b) Explorations is a Delaware corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, is
qualified to engage in business in all jurisdictions where such
qualification is required, and has full power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby ;
(c) This Agreement and the related security agreements, collateral
assignments and Notes provided for herein have been duly authorized by
all necessary corporate action and constitute the legal, valid and
binding obligations of Explorations enforceable in accordance with
their respective terms;
(d) The making and performance by Explorations of this Agreement and the
related security agreements, collateral assignments, Notes and any
related documents and the transactions contemplated hereby and thereby
do not contravene any provisions of law applicable to Explorations and
do not conflict or are not inconsistent with, and will not result
(with or without the giving of notice or both) in a breach of or
constitute a default or require any consent under, or result in the
creation of any lien, charge or encumbrance upon the Collateral
pursuant to the terms of any credit agreement, indenture, mortgage,
purchase agreement, deed of trust, security agreement, lease guarantee
or other instrument to which Explorations is a party or by which
Explorations or its assets may be bound or to which its properties may
be subject;
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(e) All sales, use, property or other taxes, licenses, tolls, inspection
or other fees, bonds, permits or certificates which were or may be
required to be paid or obtained in connection with the acquisition or
ownership by Explorations of the Collateral will have been, or when
due will be, paid in full or obtained;
(f) Explorations has good, valid and marketable title to the Collateral
free and clear of all liens, claims and encumbrances, except as
specifically disclosed in exhibit 2.1(c)(2), if any;
(g) Concurrently with or prior to the time the initial Loan is made,
Yankees will have a perfected continuing first priority security
interest in and to all the Collateral, except as specifically
disclosed in exhibit 2.1(c)(2), if any; and
(h) Explorations has not entered into any understanding or agreement,
(oral or in writing) relating to the transactions contemplated herein,
or any other transactions contemplated or permitted by this Agreement,
with any person or entity which understanding, agreement or other
writing would, in the reasonable determination of Yankees, affect the
Collateral in any manner whatsoever or any of the rights or interests
of Yankees with respect thereto.
13. DEFAULT; REMEDIES.
(a) If a Default occurs under this Agreement, Yankees may accelerate the
full amount of the then-outstanding Secured Obligations (in which
event such amount will become immediately due and payable by
Explorations ) without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived, and, if not paid
in full within 10 business days thereafter, Yankees shall, at its
election, become vested with the Collateral in fee simple absolute,
without further action or legal recourse, this Section being deemed a
full warranty xxxx of sale absolute with reference to the Collateral.
(b) In the event that for any reason Yankees is not in possession or
control of any of the Collateral, or disclaims its right to assume
ownership thereof because of public policies or otherwise, then
Yankees may pursue all of the rights and remedies with respect to the
Collateral accruing to Yankees hereunder or by operation of law as a
secured creditor under the Uniform Commercial Code or other applicable
law and all such available rights and remedies, to the full extent
permitted by the law, shall be cumulative and not exclusive.
14. APPLICATION OF PROCEEDS.
In the event that Yankees is unable or unwilling to take possession of all
the Collateral in the event of a Default, then, upon enforcement of this
Agreement, all funds received upon the foreclosure and liquidation of the
Collateral shall be applied by Yankees in the following order:
(a) To the payment of all costs, expenses, liabilities and compensation of
Yankees (including fees and expenses of its agents and legal counsel)
incurred or accrued in connection with any action or proceeding
brought by Yankees or in connection with the maintenance, sale or
other disposition of the Collateral or any portion thereof;
(b) To the payments of all interest then due and payable on the Loans;
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(c) To the payments of all principal then due and payable on the Loans;
(d) To the payment of all other obligations to Yankees;
(e) To the payment of all other Secured Obligations;
(f) To the payment of any surplus then remaining to Explorations or other
persons legally entitled thereto.
15. RECEIPT OF FUNDS BY EXPLORATIONS .
Notwithstanding the granting to Yankees of a first priority security
interest in and to the Collateral, if, at any time while the Secured Obligations
remain unsatisfied, Explorations shall receive any amount representing funds
due, or proceeds of, any of the Collateral, such sums shall be held by
Explorations in trust for Yankees and shall be immediately paid by Explorations
to Yankees in the form so received, together with any necessary endorsement
thereon.
16. FURTHER ASSURANCES.
Explorations agrees to execute and deliver to Yankees, or cause to be
executed and delivered to Yankees, such further instruments and documents as may
be reasonably requested by Yankees to carry out fully the intent and accomplish
the purposes of this Agreement, and the transactions referred to herein and
therein, and to protect and maintain the first priority security interest of
Yankees in and to the Collateral or the immediate conveyance of the Collateral
to Yankees in the event of a default hereunder.
17. FINANCIALS.
Explorations hereby represents, warrants, and covenants to Yankees that it
will cause to be delivered to Yankees (a) as soon as practicable, but in any
event within 90 days after the end of each fiscal year, statements of earnings
and retained earnings and changes in its financial position for such year, and
its balance sheet at the end to such fiscal year, setting forth in each case in
comparative form the corresponding figures of the previous annual audit, all in
reasonable detail and certified by, and accompanied by a report or opinion of,
independent certified public accountants of recognized standing acceptable to
Yankees, and (b) within 45 days after the end of each fiscal quarter, its
statements of earnings and retained earnings and changes in financial position
for such fiscal quarter, and its balance sheet at the end of such fiscal
quarter, setting forth in each case in comparative form the corresponding
figures of the previous quarterly audit, all in reasonable detail and prepared
in accordance with generally accepted accounting principles, consistently
applied, and certified by Exploration's Chief Financial Officer.
18. DISPUTE RESOLUTION.
(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, any
proceedings pertaining directly or indirectly to the rights or
obligations of the Parties hereunder will, to the extent legally
permitted, be held in Broward County, Florida, and the prevailing
Party will be entitled to recover its costs and expenses, including
reasonable attorneys' fees up to and including all negotiations,
trials and appeals, whether or not any formal proceedings are
initiated.
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(b) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the
dispute will, at the request of any Party, be exclusively resolved
through the following procedures:
(1) (A) First, the issue will be submitted to mediation before
Mediation, Inc., a mediation service in Broward County,
Florida, or any other such service as designated by Yankees,
with the mediator to be selected by lot from four
alternatives to be provided, two by Explorations and two by
Yankees.
(B) The mediation efforts will be concluded within ten business
days after their initiation unless the Parties unanimously
agree to an extended mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties will submit
the dispute to binding arbitration before an arbitration service
located in Broward County, Florida, with the arbitrator to be
selected by lot, from four alternatives to be provided, two by
Explorations and two by Yankees.
(3) (A) Expenses of mediation will be borne equally by the Parties,
if successful.
(B) Expenses of mediation, if unsuccessful and of arbitration
will be borne by the Party or Parties against whom the
arbitration decision is rendered.
(C) If the terms of the arbitral award do not establish a
prevailing Party, then the expenses of unsuccessful
mediation and arbitration will be borne equally by the
Parties involved.
(c) Jurisdiction.
(1) Explorations irrevocably consents to service of any summons
and/or legal process by registered or certified United States air
mail, postage prepaid, to Explorations at the address set forth
below in Section 19(b), such method of service to constitute, in
every respect, sufficient and effective service of process in any
such legal action or proceeding.
(2) Nothing in this Agreement shall affect the right to service of
process in any other manner permitted by law or limit the right
of Yankees to bring actions, suits or proceedings in the courts
of any other jurisdiction.
(3) Explorations further agrees that final judgment against it in any
such legal action, suit or proceeding shall be conclusive and may
be enforced in any other jurisdiction, within or outside the
United States of America, by suit on the judgment, a certified or
exemplified copy of which shall be conclusive evidence of the
fact and the amount of Exploration's liability.
19. MISCELLANEOUS.
(a) No Waiver; Cumulative Remedies.
(1) No failure or delay on the part of Yankees in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right,
power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege.
(2) No right or remedy in this Agreement is intended to be exclusive
but each shall be cumulative and in addition to any given Yankees
at law or in equity; and the exercise by Yankees of any one or
more of such remedies shall not preclude the simultaneous or
later exercise by Yankees of any or all such other remedies.
Loan Agreement - 12
Page 128
(3) No express or implied waiver by Yankees of any future or
subsequent Default shall separate as a waiver of any other
provision of this agreement.
(4) To the extent permitted by law, Explorations waives any rights
now or hereafter conferred by statute or otherwise which limit or
modify any of Yankees's rights or remedies under this Agreement.
(b) Notices.
(1) All notices, requests and demands to or upon any Party shall be
deemed to have been duly given or made when deposited in the
United States mail, first class postage prepaid, addressed to
such Party at such address as may be hereafter designated in
writing by such Party to the other Party hereto.
(2) Notices will initially be addressed as follows:
(A) To Explorations :
Explorations Group, Inc.
Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000-X;
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxx Xxxxxx, President
Telephone (000) 000-0000, Fax (000) 000-0000; and,
e-mail xxxxxxxx@xxx.xxx.
(B) To Yankees:
The Yankee Companies, LLC.
Crystal Corporate Center;
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000;
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxx Xxxxxx, President
Telephone (000) 000-0000, Fax (000) 000-0000; and,
e-mail xxxxx@xxxxxxxxxxxxxxx.xxx;
(3) At the request of any Party, notice will also be provided by
overnight delivery, facsimile transmission or e-mail, provided
that a transmission receipt is retained.
(4) (A) The Parties acknowledge that Yankees serves as a strategic
consultant to Explorations and has acted as scrivener for
the Parties in this transaction but that Yankees is neither
a law firm nor an agency subject to any professional
regulation or oversight.
(B) Because of the inherent conflict of interests involved,
Yankees has advised Explorations to retain independent legal
counsel to review this Agreement and its exhibits and
incorporated materials on its behalf.
(C) The decision by any Party not to use the services of legal
counsel in conjunction with this transaction will be solely
at its own risk, each Party acknowledging that applicable
rules of the Florida Bar prevent Yankees' general counsel,
who has reviewed, approved and caused modifications on
behalf of Yankees, from representing anyone other than
Yankees in this transaction.
Loan Agreement - 13
Page 129
(D) This Agreement shall not be construed more strictly against
Yankees nor will it be interpreted in any manner based on
the fact that it was authored by Yankees.
(c) Payment of Expenses and Taxes; Performance by Yankees of Exploration's
Obligations.
(1) Explorations agrees, whether or not the transactions contemplated
by this Agreement shall be consummated, to pay
(A) All costs and expenses of Yankees in connection with the
negotiation, preparation, execution and delivery of this
Agreement, and the other documents relating hereto;
(B) All fees and taxes in connection with the recording of this
Agreement or any other document or instrument required
hereby; and
(C) All costs and expenses of Yankees in connection with the
enforcement of this Agreement including all legal fees and
disbursements arising in connection therewith.
(2) Explorations agrees to pay, and to indemnify and hold Yankees
harmless from any delay in paying all taxes, including without
limitation, sales, use, stamp and personal property taxes (other
than any corporate income, capital, franchise or similar taxes
payable by Yankees with respect to the payments made to Yankees
hereunder or thereunder) and all license, filing, and
registration fees and assessments and other charges, if any,
which may be payable in connection with the execution, delivery
and performance of this Agreement, or any modification thereof.
(3) If Explorations fails to perform or comply with any of its
agreements contained herein and Yankees shall itself perform or
comply, or otherwise cause performance or compliance, with such
agreement, the expenses of Yankees incurred in connection with
such performance or compliance, together with interest thereon at
the rate provided for in the Notes shall be payable by
Explorations to Yankees on demand and until such payment shall
constitute part of the Secured Obligations secured hereby.
(d) Survival of Representations and Warranties.
All representations and warranties made in this Agreement and any
documents delivered pursuant hereto shall survive the execution and
delivery of this Agreement and the making of the Loans hereunder.
(e) Amendments.
Neither this Agreement, nor any instruments related thereto, may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the Party against whom enforcement of
a change, waiver, discharge or termination is sought.
(f) Counterparts & Facsimile Execution.
(1) This Agreement may be executed by the Parties on any number of
separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
(2) Execution by original signature on a document delivered to a
Party through facsimile transmission shall be deemed full
execution for all purposes by the Party executing and
transmitting such document.
Loan Agreement - 14
Page 130
(g) Headings.
The headings of the Sections and Paragraphs are for convenience only,
are not part of this Agreement and shall not be deemed to affect the
meaning or construction of any of the provisions hereof.
(h) Successors or Assigns.
This Agreement shall be binding upon and inure to the benefit of
Explorations and Yankees and their respective successors and assigns,
except that Explorations may not assign or transfer its rights or
obligations hereunder or any interest herein without the prior written
consent of Yankees.
(i) Governing Law
This Agreement shall be governed by, and construed and interpreted in
accordance with the laws of State of Delaware, other than its rules
pertaining to conflicts of laws.
(j) Severability & Reconstruction.
(1) If any provision or any portion of any provision of this
Agreement, or the application of such provision or any portion
thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision and the
remaining provisions of this Agreement or the application of such
provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those to
which it is held invalid or unenforceable, shall not be affected
thereby.
(2) In the event any provision in this Agreement or related
instruments is found to be unenforceable, the Parties hereby
request that the Court interpreting such provision restructure it
in the manner consistent with applicable law most closely meeting
the intent of the Parties, as reflected hereby.
(k) Number and Gender.
All pronouns and any variations thereof shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity
of the Party or Parties, or their personal representatives, successors
and assigns, or the context may require.
(l) License.
(1) This Agreement is the property of Yankees.
(2) The use hereof by the Parties is authorized solely for purposes
of this transaction, and the use of this form of agreement or of
any derivation thereof without Yankees's prior written permission
is prohibited.
In Witness Whereof, the Parties have caused this Agreement to be
executed on their behalf by their duly authorized representatives as of the day
last set forth below.
Signed, Sealed and Delivered
In Our Presence
Explorations Group, Inc.
/s/ Xxxxx Xxxxxxxx /s/
/s/ Xxxx Xxxxxxx /s/ By: /s/ Xxxxxxxx Xxxxxx /s/
Xxxxxxxx Xxxxxx, President
Dated: April 9, 2002
[Corporate Seal] Attest: /s/VanessaH. Xxxxxxx /s/
Xxxxxxx X. Xxxxxxx, Secretary
Loan Agreement - 15
Page 131
STATE OF FLORIDA }
COUNTY OF PALM BEACH } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9thth day of April, 2002, Xxxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx,
known to me who, being duly sworn, did state that they are the duly elected and
serving president and secretary of Explorations Group, Inc., a Delaware
corporation ("Explorations "), and that pursuant to authority duly delegated by
its board of directors, they executed the foregoing Agreement on behalf of
Explorations , effective as of the date set forth therein. My commission
expires: 04/26/04
[NOTARIAL SEAL]
/s/ Xxxxxxx X. Xxxxxxx /s/
Notary Public
The Yankee Companies, LLC.
/s/ Xxxxx Xxxxxxxx /s/
/s/ Xxxx Xxxxxxx /s/ By: /s/ Xxxxxxx Xxxxx Xxxxxx /s/
Xxxxxxx Xxxxx Xxxxxx, President
Dated: April 9, 2002
[Corporate Seal]
Attest: /s/VanessaH. Xxxxxxx /s/
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF PALM BEACH } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9thth day of April, 2002, Xxxxxxx Xxxxx Xxxxxx, known to me who,
being duly sworn, did state that he is the duly elected and serving president of
The Yankee Companies, LLC., a Florida limited liability company ("Yankees"), and
that pursuant to authority duly delegated by its board of directors, he executed
the foregoing Agreement on behalf of Yankees, effective as of the date set forth
therein. My commission expires: 04/26/04
[NOTARIAL SEAL] /s/ Xxxxxxx X. Xxxxxxx /s/
Notary Public
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9th day of April, 2002, Xxxxxxx X. Xxxxxxx, known to me who,
being duly sworn, did state that she is the duly elected and serving secretary
of The Yankee Companies, LLC., a Florida limited liability company ("Yankees"),
and that pursuant to authority duly delegated by its board of directors, she
executed the foregoing Agreement on behalf of Yankees, effective as of the date
set forth therein. My commission expires: 06/07/04
[NOTARIAL SEAL]
/s/ Xxxxx Xxx Xxxxxxxx /s/
Notary Public
Loan Agreement - 16
Page 132
Security Agreement
THIS SECURITY AGREEMENT (the "Agreement") is entered into by and between
The Yankee Companies, LLC., a Florida limited liability company ("Yankees"), and
Explorations Group, Inc. , a Delaware corporation ("Explorations "; Yankees and
Explorations being sometimes hereinafter collectively referred to as the
"Parties" and each being sometimes hereinafter generically referred to as a
"Party").
Witnesseth
In consideration of the sum of TEN DOLLARS ($10.00), the premises herein,
and other good and valuable consideration given by Yankees to Explorations , and
for other value received by Explorations ; the Parties, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS:
The definitions and rules of interpretation contained in Section 1 of the
loan agreement executed by the Parties concurrently herewith (the "Loan
Agreement") are hereby incorporated by reference.
2. ASSIGNMENT OF COLLATERAL:
(a) As security for the payment of the Obligations and all Loans and
advances heretofore made, made concurrently with the execution of the
Loan Agreement or made in the future by Yankees to Explorations and
for all Exploration's liabilities to Yankees, including any
extensions, renewals or changes in form of any thereof, Explorations
hereby assigns to Yankees and grants to Yankees a security interest
under the Uniform Commercial Code in the Collateral.
(b) The Collateral shall be deemed to have been constructively delivered
by Explorations to Yankees immediately following execution of this
Agreement and shall be deemed to remain in the possession of
Explorations , as trustee for Yankees, for so long as any obligations
of Explorations to Yankees remain unfulfilled; provided, however,
that, if Explorations defaults in its obligations to Yankees, then at
Yankees' sole option and without any required further action or legal
process by Yankees, all of the Collateral shall become the sole and
exclusive property of Yankees, this Section being deemed a full
warranty xxxx of sale, deed and securities power for all of the
Collateral.
3. RESTRAINT:
So long as any Liability to Yankees is outstanding, Explorations will not
without prior written consent of Yankees borrow from anyone on the security of,
or pledge, or grant any security interest in, any Collateral, or permit any lien
or encumbrance to attach to any of the foregoing, or any levy to be made
thereon, or any financing statement to be on file with respect thereto.
4. OFFICE:
(a) Explorations represents that its principal place of business is at
Crystal Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000-X; Xxxx
Xxxxx, Xxxxxxx 00000.
(b) Explorations will immediately advise Yankees in writing of the opening
of any new place of business or the closing of its existing places of
business, and of any changes in the location of the place where any
new Collateral not in the possession of Yankees is kept or where
Exploration's records concerning the Collateral are kept.
Security Agreement - 1
Page 133
5. DOCUMENTS:
Explorations will promptly:
(a) Join with Yankees in executing a financing statement and pay the cost
of filing the same in any public office deemed advisable by Yankees;
(b) Execute and deliver to Yankees upon demand such additional assurances
and instruments as may be required by Yankees to maintain the security
of Yankees in good standing and effectuate the intent of this
Agreement, including additional security agreements on a Loan by Loan
basis; and
(c) In the event of Default either of the terms hereof, or as enumerated
in the Loan Agreement or in the Notes, execute all such documents and
do all such acts necessary to have the Collateral transferred into the
name of Yankees as Yankees shall request.
6. INDEMNIFICATION:
Explorations hereby indemnifies and holds harmless Yankees for all loss,
cost, expense or damage resulting from Exploration's Default under this
Agreement.
7. INSURANCE:
(a) In accordance with Section 6 of the Loan Agreement, Explorations shall
keep all Collateral insured under policies of all-risk insurance
(which shall include fire, extended coverage and vandalism) placed
with companies and agents approved by Yankees and such insurance shall
be carried in amounts which Yankees deems sufficient for its complete
protection, but in no event less than the greater of (i) the aggregate
principal sum of the Liabilities or (ii) the aggregate replacement
value of the Collateral.
(b) (1) The premiums for all such insurance shall be paid by Explorations
not later than fifteen (15) days before the same are due.
(2) The original certificates of such policy or policies shall be
delivered to and held by Yankees and shall be made payable to
Yankees. In the event any sum of money becomes payable under such
policy or policies, Yankees shall have the option to receive and
apply the same on account of the indebtedness hereby secured
against payments of principal in the inverse order of their
maturity, or to permit Explorations to receive and use it, or any
part thereof, for other purposes, without thereby waiving or
impairing any equity, lien or right under and by virtue of this
Agreement.
(3) The placing of such insurance and the paying of the premium of
such insurance, or any part thereof, by Yankees shall not be
deemed to waive or affect any right of Yankees hereunder.
Security Agreement - 2
Page 134
(c) (1) If Yankees acquires title to the Collateral, any unearned
premiums on any hazard insurance covering the Collateral and held
by Yankees are hereby assigned to and shall belong to Yankees.
(2) If at any time during the term of this Agreement any insurance
policies shall be canceled and returned premiums become available
(excluding return of premium in whole on or before such time as a
new fully paid insurance policy is issued in accordance with the
terms of this Agreement), these returned premiums shall belong to
Yankees and, at the option of Yankees, may be credited by Yankees
against the Liabilities secured hereunder.
(d) Any rights of Yankees to any insurance proceeds shall in no way be
affected or impaired by reason of the fact that Yankees may have
exercised any remedy available to Yankees. In the event any losses
shall be payable on any insurance policies covering the Collateral,
Explorations and all successors in title and all persons now or
hereafter holding inferior liens on such damaged and/or destroyed
property hereby appoint Yankees agent and attorney-in-fact to endorse
such proceeds, checks(s) or drafts(s) for the purpose, at the option
of Yankees, of applying them against the Liabilities.
8. COVENANTS:
Explorations covenants and agrees that it shall:
(a) (1) Receive as the sole property of Yankees and hold as trustee for
Yankees all funds, checks, notes, drafts, and other property
("Items of Payment") representing the proceeds of any Collateral
in which Yankees has a security interest, which come into the
possession of Explorations;
(2) Deposit all such items of payment immediately in the exact form
received in a special account of Explorations in a federally
insured, state or federal savings and loan association or
commercial bank ("Bank") entitled "Cash Collateral Account"; and
(3) Execute such documents and do such acts as Yankees may require to
insure that Yankees shall have a perfected security interest in
such Cash Collateral Account to additionally secure all
Explorations's Liabilities; provided, however, that Explorations
shall have the right to use all or a portion of the Cash
Collateral Account to purchase new Collateral of like kind and
quality free and clear of all liens;
(b) Furnish a landlord's waiver of lien where Explorations is a tenant in
possession of leased premises, in form acceptable to Yankees wherein
landlord waives its lien for rent and all claims and demands of every
kind against Exploration's Collateral and authorizes Yankees to enter
upon the leased premises for the purpose of enabling Yankees to take
possession of Explorations's Collateral, pursuant to the terms of this
Agreement;
(c) (1) Make all payments of taxes, including but not limited to
assessments, levies, liabilities, obligations and encumbrances of
every nature upon the Collateral before same become delinquent;
(2) Explorations shall deliver to Yankees receipts evidencing the
payment of said taxes, assessments, levies, liabilities,
obligations, and encumbrances immediately on the payment thereof
as required in this Section.
(3) In default thereof, Yankees may at any time pay the same without
waiving or affecting any rights hereunder and every payment so
made shall bear interest from the date thereof at the highest
rate permitted by law;
Security Agreement - 3
Page 135
(d) Pay on demand any cost, charge and expense, including reasonable
attorneys' fees through all trial and appellate levels, incurred or
paid at any time by Yankees arising out of the failure of Explorations
to perform timely and comply with and abide by any of the
stipulations, agreements, conditions and covenants of the Agreement
and every such payment after the same becomes due shall bear interest
from date at the highest rate permitted by law;
(e) Keep adequate records and books of account in accordance with
generally accepted accounting principles with respect to Exploration's
business and permit Yankees, its agents, accountants and attorneys to
visit and inspect the Collateral and examine its records and books of
account and to discuss its affairs, finances and accounts with
Yankees, at such reasonable times during normal business hours, as may
be requested by Yankees upon twenty-four (24) hours notice;
(f) Keep the Collateral in good repair and operating order.
9. NO EXEMPTION:
Explorations hereby declares that the Collateral forms no part of any
property owned, used or claimed by Explorations as exempted from forced sale
under the laws of any state, and disclaims, waives and renounces all and every
claim to exemption under any homestead exemption.
10. CONVEYANCE:
(a) The sale, lease, transfer or other conveyance of the Collateral or any
part thereof to another party or parties without the prior written
consent of Yankees shall, at Yankees's option, constitute a Default
under this Agreement. No Collateral shall be removed, demolished or
substantially altered, nor shall any Collateral be removed without the
prior written consent of Yankees.
(b) In the event that Explorations is in possession of any of the
Collateral, for whatever purpose or reason, upon the failure of
Explorations to keep such Collateral in good condition or repair,
Yankees may at its option, make such repairs, and any such sums
expended by Yankees shall be immediately due and payable and shall
bear interest from the date thereof at the highest rate permitted by
law.
11. ENCUMBRANCES:
The encumbrance of the Collateral in any manner, including, without
limitation, the obtaining by Explorations or its successors or assigns of any
additional financing secured by any part of the Collateral, without the prior
written consent of Yankees (which consent shall be either granted or withheld in
Yankees's sole and unfettered discretion) shall constitute a Default under this
Agreement.
12. LAWFUL PURPOSE:
To the extent that it is in possession of any of the Collateral,
Explorations shall not use the Collateral or allow the same to be used for any
unlawful purpose or in violation of any law, ordinance or regulation now or
hereafter covering or affecting the use thereof.
Security Agreement - 4
Page 136
13. DEFAULT:
The default provisions of the Loan Agreement, the Notes and of the other
agreements pertaining to this transaction executed concurrently herewith or
hereafter pursuant to the terms of the Loan Agreement are hereby, herein
incorporated by reference.
14. OTHER ACTIONS:
(a) In the event Explorations fails to pay any charges or obligations
required to be paid or perform any acts required to be performed by
Explorations hereunder within the time set forth for such payment or
performance, Yankees shall have the right to pay such charge or
obligation and perform such act without waiving or affecting the
option of Yankees to consider this Agreement in Default.
(b) All funds advanced by Yankees pursuant to this Section shall be deemed
additional funds owed by Explorations to Yankees, shall be payable
with interest from the date of advance thereof at the highest rate
permitted by law, upon demand of Yankees thereof and shall be secured
by the lien of this Agreement.
(c) If any action or proceeding shall be commenced by any person to which
action or proceeding Yankees is made a party, or in which it shall
become necessary to defend or uphold the lien of this Agreement, all
sums paid by Yankees for the expenses of any such litigation
(including reasonable attorney's fees through all trial and appellate
levels) shall be paid by Explorations to Yankees together with
interest thereon at the highest rate permitted by law.
15. COSTS:
Explorations shall pay to Yankees all lawful charges and disbursements,
including attorneys' fees through all negotiations, administrative, trial and
appellate levels incurred by Yankees in connection with the protecting or
enforcing the rights of Yankees hereunder and all such sums shall be secured by
the lien of this Agreement.
16. WAIVER:
(a) Explorations waives notice of non-payment and protest of all
commercial paper, including the liabilities at any time held by
Yankees on which Explorations is in any way liable.
(b) (1) No waiver by Yankees of any Default shall operate as a waiver of
any other Default or of the same Default on a future occasion.
(2) No delay or omission on the part of Yankees in exercising any
right or remedy shall operate as a waiver thereof, and no single
or partial exercise by Yankees of any right or remedy shall
preclude any other or further exercise thereof or the exercise of
any other right or remedy.
(3) Time is of the essence of this Agreement.
(4) The provisions of this Agreement are cumulative and in addition
to the provisions of any remedy under any Note or other writing
evidencing any liability secured hereby.
(c) Explorations releases Yankees from all claims for loss or damage
caused by any failure to protect the Collateral or by any act or
omission on the part of Yankees, its officers, agents and employees,
except willful misconduct.
Security Agreement - 5
Page 137
17. MISCELLANEOUS:
The provisions of Sections 18 ('Dispute Resolution") and
19("Miscellaneous") of the Loan Agreement are hereby incorporated by reference.
In Witness Whereof, the Parties have caused this Agreement to be executed
on their behalf by their duly authorized representatives as of the day last set
forth below.
Signed, Sealed and Delivered
In Our Presence
Explorations Group, Inc.
/s/ Xxxxx Xxxxxxxx /s/
/s/ Xxxx Xxxxxxx /s/ By: /s/ Xxxxxxxx Xxxxxx /s/
Xxxxxxxx Xxxxxx, President
Dated: April 9, 2002
[Corporate Seal]
Attest: /s/ Xxxxxxx X. Xxxxxxx /s/
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF PALM BEACH } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9th day of April, 2002, Xxxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx,
known to me who, being duly sworn, did state that they are the duly elected and
serving president and secretary of Explorations Group, Inc. , a Delaware
corporation ("Explorations "), and that pursuant to authority duly delegated by
its board of directors, they executed the foregoing Agreement on behalf of
Yankees, effective as of the date set forth therein. My commission expires:
04/26/04
[NOTARIAL SEAL]
/s/ Xxxxxxx X. Xxxxxxx /s/
Notary Public
The Yankee Companies, LLC.
/s/ Xxxxx Xxxxxxxx /s/
/s/ Xxxx Xxxxxxx /s/ By: /s/ Xxxxxxx Xxxxx Xxxxxx /s/
Xxxxxxx Xxxxx Xxxxxx, President
Dated: April 9, 2002
Attest: /s/ Xxxxxxx X. Xxxxxxx /s/
Xxxxxxx X. Xxxxxxx, Secretary
[Corporate Seal]
STATE OF FLORIDA }
COUNTY OF PALM BEACH } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9th of April, 2002, Xxxxxxx Xxxxx Xxxxxx, known to me who, being
duly sworn, did state that he is the duly elected and serving president of The
Yankee Companies, LLC., a Florida limited liability company ("Yankees"), and
that pursuant to authority duly delegated by its board of directors, he executed
the foregoing Agreement on behalf of Yankees, effective as of the date set forth
therein. My commission expires: 04/26/04
[NOTARIAL SEAL]
/s/ Xxxxxxx X. Xxxxxxx /s/
Notary Public
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9th day of April, 2002, Xxxxxxx X. Xxxxxxx, known to me who,
being duly sworn, did state that she is the duly elected and serving secretary
of The Yankee Companies, LLC., a Florida limited liability company ("Yankees"),
and that pursuant to authority duly delegated by its board of directors, she
executed the foregoing Agreement on behalf of Yankees, effective as of the date
set forth therein. My commission expires: 06/07/04
[NOTARIAL SEAL]
/s/ Xxxxx Xxx Xxxxxxxx /s/
Notary Public
Security Agreement - 6
Page 138
Full Recourse Secured Promissory Note
$20,394.35 April 9, 2002
FOR VALUE RECEIVED, Explorations Group, Inc., a publicly held Delaware
corporation with offices at Crystal Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 000-X; Xxxx Xxxxx, Xxxxxxx 00000 ("Explorations"), hereby agrees to pay to
the order of The Yankee Companies, LLC., a Florida limited liability company,
with offices at The Crystal Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx
000; Xxxx Xxxxx, Xxxxxxx 00000 ("Yankees"), the principal sum of $20,394.35,
yielding interest commencing to run from the date hereof at a compound annual
rate of 2% over the prime rate charged during the subject period by Citibank
Bank, N.A. (New York City) or its successor in interest to its most favored
corporate borrowers for unsecured obligations having a term of one year or less,
on the following terms:
Terms:
1. INCORPORATED TERMS
(a) The terms and provisions of the loan agreement entered into between
Explorations and Yankees on April 9, 2002, a copy of which is annexed
hereto and made a part hereof as exhibit 1 (the "Loan Agreement"), are
hereby incorporated by reference as if here fully set forth.
(b) Any provisions in this Note dealing with a subject or object also
dealt with in the Loan Agreement shall, to the extent of any
inconsistencies, be deemed to provide Yankees with additional rights
and options which will be exercisable in Yankees' sole discretion.
2. PAYMENTS & COLLATERAL
(a) This Note shall be for a term of 1 year and shall thereafter be
payable upon written demand by Yankees.
(b) Upon demand, payment shall be made at the offices of Yankees or at
such other address as Yankees shall designate for such purpose.
(c) This Promissory Note is secured by all of the Assets of Explorations .
3. ACCELERATION
In the event that any payment due hereunder is not made when due, or on the
occurrence of any one or more of the events of Default specified in the Loan
Agreement, the entire unpaid principal, all accrued interest and any related
reimbursements for costs and expenses shall immediately become due and payable,
without notice or demand, at the option of the holder hereof.
4. PREPAYMENTS
Explorations may prepay this Note, in whole or in part, without penalty, at
any time, provided however, that any partial payments shall first be applied to
related reimbursable costs and expenses, then to interest, and then to
principal.
5. ASSUMPTION
(a) This Note may be assigned at will by Yankees but shall be assumable
only with the express, prior written consent of Yankees.
(b) In the event of any permitted assumption, all prior obligors will
remain liable to Yankees as guarantors of the permitted assignee's
performance but Yankees shall have the right to enforce such
guarantees directly against them without first having to seek
performance, payment or relief from the permitted assignee.
Explorations Group, Inc. Negotiable Promissory Note
Page 139
6. DEMANDS & NOTICES
(a) Any demand or notice made or given by Yankees pursuant hereto or in
connection herewith, shall be made on or given to Explorations and its
successors in interest by registered mail, return receipt requested,
postage prepaid, directed to Exploration's address provided above or
such updated address as Yankees shall have in its records, in each
case with copies to Xxxxx X. Xxxxxx, Esquire; General Counsel, The
Yankee Companies, LLC., 0000 Xxxxxxxxx 00xx Xxxxxxx; Xxxxx, Xxxxxxx
00000, attorney for Yankees, and to any legal counsel designated by
Explorations; but making or giving, or attempting to make or give, any
demand or notice shall not waive any right granted hereunder or
otherwise to act without demand or notice.
(b) Notice shall be effective when delivered by Yankees to United States
Postal Service personnel, whether or not such personnel actually
succeed in effecting delivery to Explorations or its successors in
interest.
7. EXPENSES
Explorations hereby agrees to pay all expenses, including reasonable
attorney's fees, which the holder may incur upon default or at maturity.
8. COVENANTS
Explorations and any guarantor, surety or endorser, and all others who are,
or who may become, liable for the payment hereof:
(a) Expressly consent to all extensions of time, renewals, postponements
of time of payment of this Note, from time to time, prior to or after
the day that such payments become due without notice, consent or
consideration to any of the foregoing; and
(b) Expressly agree to the additional release by Yankees of any party or
person primarily liable herein or any portion of the Collateral.
9. ENFORCEMENT
(a) No delay by the holder in enforcing any covenant or right hereunder
shall be deemed a waiver of such covenant or right and no waiver by
the holder of any particular provision hereof shall be deemed a waiver
of any other provision or a continuing waiver of such particular
provision, and except as so expressly waived, all provisions hereof
shall continue in full force and effect.
(b) This Note shall be enforceable in the Courts fo Broward County,
Florida and Explorations consents to jurisdiction therein.
10. SPECIAL WAIVERS
The undersigned, and all guarantors and all endorsers, hereby severally
waive presentment for payment, protest and notice of protest for non-payment of
this Note.
11. TIMELINESS
Time shall be of the essence.
12. LICENSE
(a) This form of Note is the property of Yankees.
(b) The use hereof by the Parties is authorized hereby solely for purposes
of this transaction, and the use of this form of agreement or of any
derivation thereof without Yankees's prior written permission is
prohibited.
Explorations Group, Inc. Negotiable Promissory Note - 2
Page 140
In Witness Whereof, Explorations has caused this Note to be executed on
its behalf by their duly authorized representatives as of the date first set
forth below.
Signed, Sealed and Delivered
In Our Presence
Explorations Group, Inc.
/s/ Xxxxx Xxxxxxxx /s/
/s/ Xxxx Xxxxxxx /s/ By: /s/ Xxxxxxxx Xxxxxx /s/
Xxxxxxxx Xxxxxx, President
Dated: April 9, 2002
[Corporate Seal] Attest: /s/ Xxxxxxx X. Xxxxxxx /s/
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 9th day of April, 2002, Xxxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx,
known to me who, being duly sworn, did state that they are the duly elected and
serving president and secretary of Explorations Group, Inc., a Delaware
corporation ("Explorations"), and that pursuant to authority duly delegated by
its board of directors, they executed the foregoing Note on behalf of
Explorations, effective as of the date set forth therein. My commission expires:
04/26/04
[NOTARIAL SEAL]
/s/ Xxxxxxx X. Xxxxxxx /s/
Notary Public
Explorations Group, Inc. Negotiable Promissory Note - 3
Page 141
Full Recourse Secured Promissory Note
$5,273.55 April 30, 2002
FOR VALUE RECEIVED, Explorations Group, Inc., a publicly held Delaware
corporation with offices at Crystal Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 000-X; Xxxx Xxxxx, Xxxxxxx 00000 ("Explorations"), hereby agrees to pay to
the order of The Yankee Companies, LLC., a Florida limited liability company,
with offices at The Crystal Corporate Center; 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx
000; Xxxx Xxxxx, Xxxxxxx 00000 ("Yankees"), the principal sum of $5,273.55,
yielding interest commencing to run from the date hereof at a compound annual
rate of 2% over the prime rate charged during the subject period by Citibank
Bank, N.A. (New York City) or its successor in interest to its most favored
corporate borrowers for unsecured obligations having a term of one year or less,
on the following terms:
Terms:
1. INCORPORATED TERMS
(a) The terms and provisions of the loan agreement entered into between
Explorations and Yankees on April 9, 2002, a copy of which is annexed
hereto and made a part hereof as exhibit 1 (the "Loan Agreement"), are
hereby incorporated by reference as if here fully set forth.
(b) Any provisions in this Note dealing with a subject or object also
dealt with in the Loan Agreement shall, to the extent of any
inconsistencies, be deemed to provide Yankees with additional rights
and options which will be exercisable in Yankees' sole discretion.
2. PAYMENTS & COLLATERAL
(a) This Note shall be for a term of 1 year and shall thereafter be
payable upon written demand by Yankees.
(b) Upon demand, payment shall be made at the offices of Yankees or at
such other address as Yankees shall designate for such purpose.
(c) This Promissory Note is secured by all of the Assets of Explorations .
3. ACCELERATION
In the event that any payment due hereunder is not made when due, or on the
occurrence of any one or more of the events of Default specified in the Loan
Agreement, the entire unpaid principal, all accrued interest and any related
reimbursements for costs and expenses shall immediately become due and payable,
without notice or demand, at the option of the holder hereof.
4. PREPAYMENTS
Explorations may prepay this Note, in whole or in part, without penalty, at
any time, provided however, that any partial payments shall first be applied to
related reimbursable costs and expenses, then to interest, and then to
principal.
5. ASSUMPTION
(a) This Note may be assigned at will by Yankees but shall be assumable
only with the express, prior written consent of Yankees.
(b) In the event of any permitted assumption, all prior obligors will
remain liable to Yankees as guarantors of the permitted assignee's
performance but Yankees shall have the right to enforce such
guarantees directly against them without first having to seek
performance, payment or relief from the permitted assignee.
Explorations Group, Inc. Negotiable Promissory Note - 4
Page 142
6. DEMANDS & NOTICES
(a) Any demand or notice made or given by Yankees pursuant hereto or in
connection herewith, shall be made on or given to Explorations and its
successors in interest by registered mail, return receipt requested,
postage prepaid, directed to Exploration's address provided above or
such updated address as Yankees shall have in its records, in each
case with copies to Xxxxx X. Xxxxxx, Esquire; General Counsel, The
Yankee Companies, LLC., 0000 Xxxxxxxxx 00xx Xxxxxxx; Xxxxx, Xxxxxxx
00000, attorney for Yankees, and to any legal counsel designated by
Explorations; but making or giving, or attempting to make or give, any
demand or notice shall not waive any right granted hereunder or
otherwise to act without demand or notice.
(b) Notice shall be effective when delivered by Yankees to United States
Postal Service personnel, whether or not such personnel actually
succeed in effecting delivery to Explorations or its successors in
interest.
7. EXPENSES
Explorations hereby agrees to pay all expenses, including reasonable
attorney's fees, which the holder may incur upon default or at maturity.
8. COVENANTS
Explorations and any guarantor, surety or endorser, and all others who are,
or who may become, liable for the payment hereof:
(a) Expressly consent to all extensions of time, renewals, postponements
of time of payment of this Note, from time to time, prior to or after
the day that such payments become due without notice, consent or
consideration to any of the foregoing; and
(b) Expressly agree to the additional release by Yankees of any party or
person primarily liable herein or any portion of the Collateral.
9. ENFORCEMENT
(a) No delay by the holder in enforcing any covenant or right hereunder
shall be deemed a waiver of such covenant or right and no waiver by
the holder of any particular provision hereof shall be deemed a waiver
of any other provision or a continuing waiver of such particular
provision, and except as so expressly waived, all provisions hereof
shall continue in full force and effect.
Explorations Group, Inc. Negotiable Promissory Note - 5
Page 143
(b) This Note shall be enforceable in the Courts fo Broward County,
Florida and Explorations consents to jurisdiction therein.
10. SPECIAL WAIVERS
The undersigned, and all guarantors and all endorsers, hereby severally
waive presentment for payment, protest and notice of protest for non-payment of
this Note.
11. TIMELINESS
Time shall be of the essence.
12. LICENSE
(a) This form of Note is the property of Yankees .
(b) The use hereof by the Parties is authorized hereby solely for purposes
of this transaction, and the use of this form of agreement or of any
derivation thereof without Yankees's prior written permission is
prohibited.
In Witness Whereof, Explorations has caused this Note to be executed on its
behalf by their duly authorized representatives as of the date first set forth
below.
Signed, Sealed and Delivered
In Our Presence
/s/ Xxxxx Xxxxxxxx /s/ Explorations Group, Inc.
-------------------------------
/s/ Pearl Audit /s/
_______________________________ By: /s/ Xxxxxxxx Xxxxxx /s/
Xxxxxxxx Xxxxxx, President
Dated: April 30, 2002
[Corporate Seal] Attest: /s/ Xxxxxxx X. Xxxxxxx /s/
Xxxxxxx X. Xxxxxxx, Secretary
STATE OF FLORIDA }
COUNTY OF XXXXXX } SS.:
BEFORE ME, an officer duly authorized to administer oaths, did personally
appear on this 30th day of April, 2002, Xxxxxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx,
known to me who, being duly sworn, did state that they are the duly elected and
serving president and secretary of Explorations Group, Inc., a Delaware
corporation ("Explorations"), and that pursuant to authority duly delegated by
its board of directors, they executed the foregoing Note on behalf of
Explorations, effective as of the date set forth therein. My commission expires:
04/26/04.
[NOTARIAL SEAL]
/s/ Xxxxxxx X. Xxxxxxx /s/
-------------------------------
Notary Public
Explorations Group, Inc. Negotiable Promissory Note - 6
Page 144
