Loan Guarantee & Indemnity Agreement
This loan guarantee and indemnity agreement (the "Agreement"), is entered
into by and among American Internet Technical Center, a Florida corporation with
an office address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ("American Internet"); AmeriNet ▇▇▇▇▇.▇▇▇, inc., a Delaware corporation
with a class of securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended formerly operating as Equity Growth Systems,
inc. ("AmeriNet" and the "Exchange Act," respectively); and, The Yankee
Companies, Inc., a Florida corporation ("Yankees")
Preamble:
WHEREAS, American Internet is a wholly owned subsidiary of AmeriNet and
requires unexpected interim capital; and
WHEREAS, Xcel Associates, inc., a New Jersey corporation is willing to
provide such capital (the "Xcel Loan") on the condition that it receives
15,000 shares of AmeriNet common stock as compensation in lieu of interest
and the Yankees pledge 35,000 shares of AmeriNet common stock that it has
held since on or about December of 1998 (the "Yankee Stock"), as a
guarantee of American Internet's repayment of the Xcel Loan; and
WHEREAS, Yankees is willing to pledge the Yankee Stock, provided that
American Internet and AmeriNet, jointly and severally, agree to guarantee
that American Internet will fully comply with all aspects of the Xcel Loan,
and guarantee to Yankees the timely return of the Yankee Stock, and
compensate Yankees for its use as collateral; and
WHEREAS, American Internet and AmeriNet are agreeable to Yankees
requirements:
NOW THEREFORE, in consideration for the mutual covenants hereinafter set
forth, the sum of ten dollars and other good and valuable consideration,
the receipt and adequacy of which is hereby irrevocably acknowledged,
American Internet, AmeriNet and Yankees (being hereinafter sometimes
collectively referred to as the "Parties" or generically as a "Party"),
intending to be legally bound, hereby agree as follows:
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Witnesseth:
First: Annexed hereto and made a part hereof as exhibits 1-A and 1-B are the
form of promissory note and the pledge agreement that Xcel has
required American Internet and Yankees, respectively, to execute in
conjunction with the Xcel Loan (the "Note" and the "Pledge Agreement,"
respectively).
Second: Yankees hereby agrees to enter into the Pledge Agreement predicated on
the covenants of American Internet and AmeriNet hereinafter set forth,
as an accommodation to American Internet and AmeriNet outside the
scope of its duties under its consulting agreement dated on or about
November 24, 1998, with AmeriNet, then known as Equity Growth Systems,
inc. (the "Consulting Agreement") .
Third: As compensation for its agreement to pledge the Yankee Stock, AmeriNet
hereby irrevocably agrees to pay to Yankees a sum equal to the closing
offer price of AmeriNet's common stock on the date of the Xcel Loan
multiplied by 1/10th the number of shares of AmeriNet common stock
that Yankees is required to pledge to Xcel pursuant to the Pledge
Agreement, or any amendments or supplements thereof (representing 10%
of the value of the transaction).
Fourth: American Internet and AmeriNet, jointly and severally, hereby
irrevocably covenant and agree to indemnify Yankees in the event that
the pledged collateral is retained by Xcel as a result of American
Internet's failure to comply with its obligations under the Xcel Loan
or for any other reason, indemnification to be at the election of
Yankees either in securities of AmeriNet selected by Yankees, based on
Yankees' rights to a 50% discount under the Consulting Agreement with
AmeriNet, or in cash based on the greatest value attained by the
Yankees Stock during the interim between its pledge to Xcel and the
loss thereof to Xcel or its successors in interest.
Fifth: The obligation of American Internet to pay the Xcel Loan shall be
deemed by the Parties, for purposes of their obligations under this
Agreement but not under the Note or the Pledge Agreement, to
accelerate and mature, without notice or demand, concurrently with the
exercise by Xcel of a currently outstanding warrant to purchase up to
1,000,000 shares of AmeriNet's common stock, as reflected in the copy
of the warrant agreement annexed hereto and made a part hereof as
exhibit 2 (the "Warrant"), to the extent of 100% of the proceeds from
such exercise, until the Xcel Loan is paid in full.
Sixth: American Internet hereby represents, warrants and covenants that:
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(a) The proceeds being provided by Xcel to AmeriNet for the benefit of
American Internet concurrently with the execution hereof shall be used
solely for the purposes set forth in exhibit 3(a) annexed hereto and
made a part hereof (the "Use of Proceeds"), unless otherwise consented
to in writing by AmeriNet and Yankees;
(b) All acts, conditions and things (including, without limitation, the
making of any required filings, recordings or registrations) required
to be done or performed and to have happened pursuant to the Xcel Loan
have been done and performed or will immediately be done and
performed;
(c) All corporate, and legal proceedings and all documents and instruments
in connection with the authorization of the Xcel Loan and the related
note, and all related instruments and ancillary documentation thereto
will be delivered to Xcel and its legal counsel immediately following
their execution and Xcel will be immediately provided with all
information and copies of all other related documents and instruments,
including records of corporate proceedings, which Xcel 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) As of the date of the Xcel Loan it is not insolvent within the meaning
of applicable state and federal law;
(e) It is a corporation duly organized and validly existing in good
standing under the laws of the State of Florida and that it has full
power and authority to enter into the Xcel Loan, respectively, and to
consummate the transactions contemplated hereby and thereby.
Seventh: Yankees hereby represents and warrants to Xcel, that:
(a) The granting of the security interest to Xcel provided for herein have
been duly authorized by all necessary corporate action and hereby and
thereby constitute legal, valid and binding obligations of Yankees,
enforceable in accordance with their respective terms;
(b) The making and performance by Yankees of the obligations pertaining to
the Collateral undertaken under the Xcel Loan, and any related
documents and the transactions contemplated hereby and thereby do not
contravene any provisions of law applicable to it 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 it is a party or by which it may be bound or to which its
properties may be subject;
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(c) Yankees has good, valid and marketable title to the collateral free
and clear of all liens, claims and encumbrances; and
(d) Yankees has not entered into any understanding or agreement, (oral or
in writing) relating to the transactions contemplated herein, or any
other transactions contemplated or per mitted by the Xcel Loan with
any person or entity which understanding, agreement or other writing
would affect the collateral in any manner whatsoever or any of the
rights or interests of Xcel with respect thereto.
Eighth: The Parties hereby acknowledge that Xcel is aware that neither the
Collateral or the common stock being issued in lieu of interest have
been registered under the Securities Act of 1933, as amended (the
"Securities Act") or under the securities laws of any state, but
rather, that the collateral is being pledged and the common stock in
lieu of interest is being issued in reliance on the exemptions from
registration requirements, specifically, the collateral is being
pledged in reliance on the exemption provided by Sections 4(1) and
4(2) of the Securities Act (known in the securities industry as the 4
(1 1/2) exemption), the stock in lieu of interest is being issued in
reliance on the exemption provided by Section 4(6) of the Securities
Act, and both are relying on comparable exemptions under state Blue
Sky Laws, including Section 517.061(11), Florida Statutes, and Section
49:3-50 of the New Jersey Uniform Securities Act (1997); and that,
consequently:
(a) The securities being pledged or issued under to Xcel will bear legends
restricting their transfer, sale, conveyance or hypothecation unless
such Securities are either registered under the provisions of Section
5 of the Act and under applicable state law or an opinion of legal
counsel, in form and substance satisfactory to legal counsel to
AmeriNet is provided to AmeriNet's General Counsel to the effect that
such registration is not required as a result of applicable exemptions
therefrom;
(b) The parties acknowledges that the Collateral will qualify under the
"pledge" provisions of Commission Rule 144 as to tacking of Yankees'
holding period therefor, which began on or about December 8, 1998, and
Xcel has acknowledged that the Securities being issued by AmeriNet in
lieu of interest will require a holding period of one year from the
date that the proceeds are provided by Xcel;
(c) AmeriNet's transfer has been instructed not to transfer any of the
foregoing securities unless the General Counsel for AmeriNet advises
it that such transfer is in compliance with all applicable laws;
(d) The collateral involves a bona fide pledge, with the expectation by
Xcel that all payments required under the Xcel Loan will be made, and
that the collateral will thereafter remain the property of Yankees;
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(e) Xcel is acquiring the AmeriNet common stock issued in lieu of interest
for its own account, for investment purposes only, and not with a view
to further sale or distribution; and
(f) Xcel or its advisors have previously examined AmeriNet's books and
records and questioned its officers and directors as to such matters
involving AmeriNet as they deemed appropriate.
(g) No advertising or general solicitation of any kind was used in the
Xcel transaction, it being limited to one Offeree.
(h) Xcel has tendering the net sum of $75,000, in cleared United States
Dollars, to the order of AmeriNet, for the benefit of American
Internet, prior to the execution of the Xcel Loan, and such funds were
retained in an account controlled by AmeriNet until it was advised by
Xcel that such proceeds could be released;
(i) Payment of principal, interest and other sums due or to become due
with respect to the Xcel Loan are to be made at the office of
principal executive offices of Xcel, in Hazlet, New Jersey, or such
other place as Xcel and Yankees shall agree upon and designate to
American Internet in writing, in lawful money of the United States of
America in immediately available funds.
(j) American Internet or AmeriNet, shall pay or cause to be paid, in
addition to all other amounts payable hereunder actual expenditures,
including reasonable attorney's fees, for proceedings to collect the
Xcel Loan or to enforce, preserve and protect the collateral (as such
term is defined herein) and the rights and interest of Xcel therein.
(k) American Internet, AmeriNet and Yankees hereby agree to execute and
deliver to Xcel, or cause to be executed and delivered to Xcel, such
further instruments and documents as may be reasonably requested by
Xcel to carry out fully the intent and accomplish the purposes of the
Xcel Loan and the transactions referred to herein and therein, and to
protect and maintain the first priority security interest of Xcel in
and to the collateral.
Ninth: Miscellaneous provisions:
(a) Notices.
All notices, requests and demands to or upon any party hereto 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.
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(1) Notices to Xcel shall be made at the address set forth in the initial
paragraph of the Xcel Loan, in each case with copies to Yankees and
AmeriNet;
(2) Notices to American Internet shall be provided to the following
address, in each case with copies to AmeriNet and Yankees: American
Internet Technical Center, Inc.; ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇, President; Telephone (954)
▇▇▇-▇▇▇▇; Fax (▇▇▇) ▇▇▇-▇▇▇▇; e- mail ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇;
(3) Notices to Yankees shall be provided to the following addresses,
confirmed on the date sent by fax and e-mal: The Yankee Companies,
Inc.; ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇; ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, President; Telephone (▇▇▇) ▇▇▇-▇▇▇▇,
Fax (▇▇▇) ▇▇▇-▇▇▇▇; and, e-mail ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇; with a copy to
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Chief Administrative Officer; Telephone (▇▇▇) ▇▇▇-▇▇▇▇;
Fax (▇▇▇) ▇▇▇-▇▇▇▇; and e-mail ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇; and
(4) Notices to AmeriNet shall be provided to the following addresses,
confirmed on the date sent by fax and e-mal, and with copies to
Yankees: AmeriNet ▇▇▇▇▇.▇▇▇, Inc.; ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇;
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
President; Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (561) ▇▇▇- ▇▇▇▇; and, e-mail
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇; with a copy to G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esquire;
General Counsel; AmeriNet ▇▇▇▇▇.▇▇▇, Inc.; ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇;
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; Telephone (▇▇▇) ▇▇▇-▇▇▇▇, Fax (352) 694-
9178; and, e-mail, ▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇. ------------------
(b) Amendments.
This Agreement may not 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.
(c) Headings.
The headings of the Sections and Paragraphs are for convenience only, are
not part of this Agreement and shall not be deemed to effect the meaning or
construction of any of the provisions hereof.
(d) Successors or Assigns.
(1) This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors and assigns.
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(2) The obligations of AmeriNet to Yankees shall be binding upon
and inure to the benefit of Yankees and its respective
successors and assigns.
(e) Construction.
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Delaware.
(f) Severability.
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.
(g) 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 may require.
(h) Jurisdiction.
(1) American Internet and AmeriNet hereby irrevocably consent and
agree that any legal action, suit or proceeding arising out of
or in any way related to this Agreement or the transactions
contemplated hereby, shall be instituted or brought in a
forum, either legal or arbitral, in Broward County, Florida,
and by execution and delivery of this Agreement, they hereby
irrevocably accept and submit to, for themselves and in
respect of their property, generally and unconditionally, the
non-exclusive jurisdiction of any such tribunal, and to all
proceedings in such tribunal.
(2) American Internet and AmeriNet irrevocably consent to service
of any summons and/or legal process by registered or certified
United States air mail, postage prepaid, to Maker at the
address set forth in any filing with the Florida Department of
State or the Commission, such method of service to constitute,
in every respect, sufficient and effective service of process
in any such legal action or proceeding.
(3) 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 or tribunals of any other jurisdiction.
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(4) American Internet and AmeriNet further agree that final
judgment against them 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 American Internet's or AmeriNet's liability.
(i) License.
7-A This form of Agreement is the property of Yankees.
7-B The use hereof by the parties executing this Agreement in
their several capacities is authorized hereby solely for
purposes of this transaction and, the use of this form of
agreement or of any derivation thereof without Yankees'
prior written permission is prohibited.
7-C This Agreement shall not be construed more or less
stringently against any signatory thereto or any other
person based on its authorship.
7-D Each signatory to this Agreement hereby acknowledges that
Yankees:
(a) Is not a law firm or otherwise legally regulated or
licensed entity;
(b) Has not provided anyone with advice concerning execution
of this Agreement;
(c) Has suggested that every person or legal entity
executing this Agreement have it independently
reviewed by their own advisors and legal counsel
prior to its execution.
(k) Exhibits
The following exhibits are annexed to this Agreement, incorporated by
reference and made a part thereof:
Exhibit Description
1-A The Xcel Note
1-B) The Pledge Agreement
2 The Warrant
3(a) The Use of Proceeds
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IN WITNESS WHEREOF, the Parties have executed this Agreement, effective as
of the 30th day of September, 1999.
Signed, Sealed & Delivered
In Our Presence:
American Internet Technical Center, Inc.
------------------------
________________________ By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇, President
{CORPORATE SEAL}
Attest:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary
AmeriNet ▇▇▇▇▇.▇▇▇, Inc.
------------------------
________________________ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Jordan
President
{CORPORATE SEAL}
Attest: /s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
________________________
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esquire
Secretary
The Yankee Companies, Inc.
------------------------
________________________ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
President
{CORPORATE SEAL}
Attest: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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Exhibits 1-A, 1-B and 2
The Xcel Note, the Yankees Pledge and the Warrant Agreement
Included in separate instrument provided to each signatory, the receipt of
which is acknowledged, through initialing of this page.
Exhibit 3(a)
Use of Proceeds
1. Development of Tutor-to-Go Interactive Internet Program: $15,000
2. Equipment for T-1 Line $ 3,000
3. Salaries & Wages $ 4,000
4. Marketing, Advertising & Promotions $10,000
5. Auditors $ 8,000
6. Atlanta Trade Show $ 5,000
7. Leasehold improvements $ 5,000
8. Accounts Payable $ 7,000
9. AmeriNet stock in lieu of interest partial credit $18,000
Total $75,000
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