ex_10-1commloanagrmnt.htm


    Exhibit
10.1

     

     

    COMMERCIAL
LOAN AGREEMENT

     

    LENDER:                                                                                                BORROWER:

    Applejack
Art Partners,
Inc.                                                                                                           a21,
Inc.

    P.O. Box
1527                                                                                                7660
Centurion Parkway

    Manchester
Center,
VT 05255                                                                                                           Jacksonville,
FL 32256

     

    


    This
Commercial Loan Agreement (the “Agreement”) contemplates an advance draw loan
with the principal balance of all such draws not to exceed $500,000.00
(collectively, the “Loan”). The Loan is for business purposes.

    Applejack
Art Partners, Inc. (Lender) agrees to make the Loan to a21, Inc. (“Borrower”),
subject to the following terms and conditions, to which Borrower hereby
agrees:

     

    
      	
               
      

            	
              1.

            	
              The
      Loan shall be advanced in multiple disbursements. As a condition
      precedent to any obligation of Lender to make any disbursement of the
      Loan, there shall not, at the proposed funding date, exist an Event of
      Default (as defined in paragraph
7).

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      Loan shall be evidenced by the Commercial Loan Agreement, a Promissory
      Note (Note), a Security Agreement, and an Intercreditor Agreement in form
      acceptable to Lender (together referred to as the “Loan Documents”). The
      principal amount of the Loan and interest thereon shall be calculated and
      be payable as set forth more particularly in the
  Note.

            


    

     

    
      	
               
      

            	
              3.

            	
              To
      induce Lender to make the Loan, Borrower hereby warrants and represents to
      Lender that as of the date hereof:

            


    

     

    
      	
               
      

            	
              a.

            	
              Borrower
      has the authority, and has completed all proceedings and obtained all
      approvals and consents necessary, to execute, deliver, and perform this
      Agreement and the Note, and the transactions contemplated hereby and
      thereby.

            


    

     

    
      	
               
      

            	
              b.

            	
              Such
      execution, delivery, and performance will not contravene, or constitute a
      default under or result in a lien upon assets of Borrower pursuant to any
      applicable law or regulation, any contract, agreement, judgment, order,
      decree, or other instrument binding upon or affecting Borrower or its
      properties.

            


    

     

    
      	
               
      

            	
              c.

            	
              This
      Agreement, the Note and Security Agreement constitute the legal, valid,
      and binding obligations of Borrower enforceable in accordance with their
      respective terms except as such enforcement may be limited by
      bankruptcy, insolvency and other similar laws affecting creditors’ rights
      generally.

            


    

     

    
      	
               
      

            	
              d.

            	
              Except
      as previously disclosed to Lender in writing, there is no action, suit, or
      proceeding pending or threatened against Borrower or its properties that
      might adversely affect Borrower in any material
  respect.

            


    

     

    
      	
               
      

            	
              e.

            	
              Borrower
      has furnished Lender with financial information as requested by Lender
      that accurately and fairly presents the financial position of Borrower in
      all material respects.

            


    

     

    
      	
               
      

            	
              f.

            	
              Borrower
      has marketable title to its properties reflected in such disclosed
      financial information, subject to no mortgage, lien, or security interest
      other than those heretofore disclosed in writing to Lender and other
      Permitted Encumbrances (as hereinafter defined), and to the best of
      Borrower’s knowledge, no event has occurred since the date of such
      financial statements that could materially adversely affect the Borrower’s
      ability to perform

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    its
obligations under this Agreement.  For purposes of this Agreement,
“Permitted Encumbrances” shall mean following encumbrances:  (i) liens
for taxes or assessments or other governmental charges or levies, either not yet
due and payable; (ii) pledges or deposits securing obligations under worker’s
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (iii) pledges or deposits securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to which any
Credit Party is a party as lessee made in the ordinary course of business; (iv)
deposits securing public or statutory obligations of Borrower; (v) inchoate and
unperfected workers’, mechanics’, or similar liens arising in the ordinary
course of business; (vi) carriers’, warehouseman’s’, suppliers’ or other similar
possessory liens arising in the ordinary course of business and securing
indebtedness not yet due and payable; (vii) deposits of money securing, or in
lieu of, surety, appeal or customs bonds in proceedings to which Borrower is a
party; (viii) zoning restrictions, easements, licenses, or other restrictions on
the use of real property or other minor irregularities in title (including
leasehold title) thereto; (ix) liens upon any fixed assets that secures the
purchase money indebtedness related thereto; (x) liens in favor of Lender and
(xi) liens disclosed in filings made by the Borrower in its filings with the
Securities and Exchange Commission.

     

    
      	
               
      

            	
              g.

            	
              All
      tax returns required of Borrower have been filed, there is no proposed
      material tax assessment or liability against Borrower or its property, and
      no extension of time for the assessment of any tax of Borrower is in
      effect or has been requested, except as disclosed in financial statements
      previously furnished to Lender.

            


    

     

    
      	
               
      

            	
              h.

            	
              The
      proceeds of the Loan shall be used by Borrower solely for business
      purposes.

            


    

     

    


     

    
      	
               
      

            	
              4.

            	
              So
      long as any part of the indebtedness contemplated hereby shall remain
      unpaid, Borrower will:

            


    

     

    
      	
               
      

            	
              a.

            	
              Maintain
      accurate books and records in accordance with generally accepted
      accounting principles, and during business hours and upon reasonable
      advance notice permit inspection of same and any properties of Borrower by
      Lender at Lender’s request and permit Lender to make abstracts and copies
      of Borrower’s books and records; provided, however, that so long as no
      Event of Default has occurred such inspections shall be limited to twice
      in any fiscal year

            


    

     

    
      	
               
      

            	
              b.

            	
              Furnish
      to Lender financial statements and information, including an income and
      expense statement, rent roll, balance sheet and cash flow statement in
      accordance with generally accepted accounting principals, to be submitted
      within 120 days after fiscal year
end.

            


    

     

    
      	
               
      

            	
              c.

            	
              Maintain
      in form, with companies and with loss payable reasonably acceptable to
      Lender, adequate insurance(s) of a type and in amounts customarily carried
      by others engaged in a like or similar business and such additional
      insurance as Lender from time to time may reasonably require, and upon
      demand, deliver to Lender the policies concerned or a schedule of all
      insurance in force.

            


    

     

    
      	
               
      

            	
              d.

            	
              Pay
      all liens, taxes, assessments, and other governmental charges; provided,
      however, that nothing herein contained shall require Borrower to pay any
      tax or other lien so long as its validity is contested in good faith and
      adequate provision, acceptable to Lender, has been made
      therefore.

            


    

     

    
      	
               
      

            	
              e.

            	
              Promptly
      notify Lender in writing of the occurrence of an Event of Default or of
      any event that might materially adversely affect Borrower or its ability
      to repay the Loan.

            


    

     

    
      	
               
      

            	
              5.

            	
              Advances
      under this Promissory Note (Note) may be taken for three (3) months, and
      shall be used for business purposes. Advances shall be made at the written
      request of an officer or director of Borrower who is authorized to request
      advances and direct the disposition of such advances,
  until

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    written
notice of the revocation of such authority is received by Lender at Lender’s
principal office set forth above. Advance requests must be made in writing to
Lender, and shall detail the reasons for the requested
advance.  Advance requests must be approved by Lender, which approval
shall not be unreasonably withheld.  Any advance shall be conclusively
presumed to have been made to or for the benefit of the undersigned when made in
accordance with such requests.  Advances may be made at no greater
frequency than one (1) time each week, and shall not be made within five (5)
business days of the previous request.  No individual advance shall
exceed $150,000.  Lender shall make each Loan within two (2) business
days of each advance request by Borrower.  No request for an advance
will be honored if a “default” hereunder shall have occurred and exists, or if
the amount requested, when added to the total of all amounts previously advanced
hereunder, would exceed the sum of Five Hundred Thousand Dollars
($500,000.00).  In the event Lender fails to advance funds
hereunder, Borrower may terminate this agreement, and the obligations and
restrictions hereunder, by giving Lender five (5) days written notice of such
position. Borrower shall thereafter pay the entire outstanding principal balance
and accumulated interest in full on or before November 1, 2008 or, if earlier,
the date the Borrower, after the thirty (30) day period referred to in Paragraph
6(c) below, executes a binding letter of intent with any person, other than the
Lender, to convey, lease, or sell all or substantially all of its assets to any
person or entity, whether in one transaction or a series of related
transactions.

     

    
      	
              6.

            	
              So
      long as any part of the indebtedness contemplated hereby shall remain
      unpaid, Borrower will not, directly or indirectly, without the prior
      written consent of Lender:

            


    

     

    
      	
               
      

            	
              a.

            	
              Create
      or permit to exist against Borrower’s assets, pledged as collateral for
      this loan now or hereinafter acquired as part of the loan collateral, any
      lien other than liens heretofore disclosed to Lender and approved by in
      writing and Permitted Encumbrances.

            


    

     

    
      	
               
      

            	
              b.

            	
              Purchase
      or acquire all or substantially all of the assets of any person or entity
      except in the ordinary course of
business.

            


    

     

    
      	
               
      

            	
              c.

            	
              Notwithstanding
      the time period referred to in the opening sentence of this Paragraph 6,
      until the earlier to occur of (i) thirty (30) days after the date hereof,
      or (ii) the date the Lender fails to advance funds hereunder for any
      reason or no reason, engage in discussions and/or negotiations with any
      party other than Lender to convey, lease, or sell all or substantially all
      of its assets to any person or entity, whether in one transaction or a
      series of related transactions –;

            


    

     

    
      	
               
      

            	
              d.

            	
              Sell,
      assign, transfer, or dispose of any of its accounts receivable or any
      substantial portion of its other
assets;

            


    

     

    
      	
               
      

            	
              e.

            	
              Make
      loans to others;

            


    

     

    
      	
               
      

            	
              f.

            	
              Become
      liable in any manner for the debts or obligations of others, except in the
      ordinary course of business as currently
  conducted.

            


    

     

    
      	
              7.

            	
              Upon
      the occurrence of any of the following (an Event of
    Default):

            


    

     

    
      	
               
      

            	
              a.

            	
              Failure
      by Borrower to make any payment of principal or interest on the Note
      within ten (10) days of due date;

            


    

     

    
      	
               
      

            	
              b.

            	
              Failure
      by Borrower to observe or perform any other term or provision of this
      Agreement, the Note, or the Security Agreement, within ten (10) days of
      written notice by Lender;

            


    

     

    
      	
               
      

            	
              c.

            	
              Any
      material default under any other material agreement between the Borrower
      and the Lender, or any material default in any of the obligations of the
      Borrower to others for borrowed money which, in the opinion of the Lender
      acting in good faith, impairs its security or increases the likelihood
      that Borrower will be unable to repay the
Loan.

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


     

    


     

    
      	
               
      

            	
              d.

            	
              Any
      material representation made or information furnished to Lender by or on
      behalf of Borrower shall be inaccurate or incomplete in any material
      respect;

            


    

     

    
      	
               
      

            	
              e.

            	
              Borrower
      shall admit in writing its inability to pay its debts as they become due
      (however evidenced) or there shall be commenced any bankruptcy,
      insolvency, arrangement, reorganization, or other debtor-relief
      proceedings by or against, or the death, dissolution, termination of
      existence or insolvency of,
Borrower;

            


    

     

    
      	
               
      

            	
              f.

            	
              The
      happening of any event under any agreement involving the borrowing of
      money by, or advance of credit to, Borrower, which gives to the holder of
      such obligation the right to accelerate its maturity, whether or not such
      right is exercised;

            


    

     

    
      	
               
      

            	
              g.

            	
              Entry
      of any judgment against Borrower in excess of $50,000, unless satisfaction
      or appeal of such judgment, or provision for satisfaction acceptable to
      Lender, is effected within thirty (30) days from the date of
      entry;

            


    

     

    
      	
               
      

            	
              h.

            	
              The
      occurrence of any “reportable event” under the Employee Retirement Income
      Security Act of 1974 (ERISA) which Lender in good faith determines
      constitutes grounds for the imposition of liability against Borrower under
      part IV, subtitle D of ERISA;

            


    

     

    
      	
               
      

            	
              THEN,
      Lender may, at its election and without demand or notice of any kind,
      which are hereby waived, declare the unpaid balance of the Note, and
      accrued interest thereon, immediately due and payable, refuse to make
      additional advances hereunder, proceed to collect same, and exercise any
      and all other rights, powers and remedies given it by this Agreement, the
      Note and Security Agreement or otherwise at law or in
    equity.

            


    

     

    
      	
              8.

            	
              The
      representations and warranties of Borrower contained herein shall survive
      the making of the Loan and shall remain effective until all indebtedness
      contemplated hereby shall have been paid by Borrower in
    full.

            


    

     

    
      	
              9.

            	
              This
      Agreement shall be governed by and construed in accordance with the laws
      of Vermont. Any forbearance, failure, or delay by Lender in exercising any
      right, power, or remedy shall not preclude the further exercise thereof,
      and all of Lender’s rights, powers, and remedies shall continue in full
      force and effect until specifically waived in writing by
      Lender.

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED TO
PROTECT YOU (BORROWER) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT,
ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING,
WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT. BY SIGNING THIS AGREEMENT,
THE PARTIES AFFIRM THAT NO UNWRITTEN ORAL AGREEMENT EXISTS BETWEEN
THEM.

    


    Dated
this ___ day of July, 2008.

    a21, Inc.

    


    By:____________________________________

         Its Duly
Authorized Agent

    


    Applejack Art Partners,
Inc.

    


    By:
___________________________

    


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Name: ____________________