Document:

Exhibit 10.2

 

Execution copy

GUARANTY

This GUARANTY, dated as of March 12, 2018  (this “Guaranty”), is made by Sports Endurance, Inc., a Nevada corporation (the  “Guarantor”), in favor of _________ (together with its permitted assigns, the “Secured Party”), party to that certain Note Purchase Agreement (the “Purchase Agreement”), dated as of the date hereof, among Yield Endurance, Inc., a New Jersey corporation (the “Company”) and the Secured Party.

W I T N E S S E T H:

WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to sell and issue to the Secured Party, and the Secured Party has agreed to purchase from the Company the original issue discount secured demand promissory note dated as of the date hereof (the “Note”) by and between the Secured Party and the Company, subject to the terms and conditions set forth therein.

WHEREAS, the Purchase Agreement requires that the Guarantor execute and deliver to the Secured Party, (i) a guaranty guaranteeing all of the obligations of the Company under the Purchase Agreement, the Note and the other Transaction Documents (as defined in the Purchase Agreement); and (ii) a Security Agreement, dated as of the date hereof, granting the Secured Party a lien on and security interest in all of its assets and properties (the “Security Agreement”); and

WHEREAS, the Guarantor has determined that the execution, delivery and performance of this Guaranty directly benefits, and is in its best interest.

NOW, THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Secured Party to perform under the Purchase Agreement, the Guarantor hereby agrees with the Secured Party as follows:

SECTION 1.          Definitions.  Reference is hereby made to the Purchase Agreement and the Note for a statement of the terms thereof.  All terms used in this Guaranty and the recitals hereto which are defined in the Purchase Agreement or the Note, and which are not otherwise defined herein shall have the same meanings herein as set forth therein.  In addition, the following terms when used in the Guaranty shall have the meanings set forth below:

“Bankruptcy Code” means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency or similar laws).

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in Chicago, Illinois are authorized or required by law to remain closed.

 “Capital Stock” means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.

“Collateral” means all assets and properties of the Company and the Guarantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind and description, tangible or intangible, including, without limitation, the collateral described in Section 2 of the Security Agreement.

 “Company” shall have the meaning set forth in the recitals hereto.

“Governmental Authority” means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guaranteed Obligations” shall have the meaning set forth in Section 2 of this Guaranty.

“Guarantor” or “Guarantors” shall have the meaning set forth in the recitals hereto.

“Indemnified Party” shall have the meaning set forth in Section 13(a) of this Guaranty.

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

“Note” shall have the meaning set forth in the recitals hereto.

“Obligations” shall have the meaning set forth in Section 3 of the Security Agreement.

“Other Taxes” shall have the meaning set forth in Section 12(a)(iv) of this Guaranty.

“Paid in Full” or “Payment in Full” means the indefeasible payment in full in cash of all of the Guaranteed Obligations.

“Person” means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization, joint venture or other enterprise or entity or Governmental Authority.

“Purchase Agreement” shall have the meaning set forth in the first paragraph hereto.

“Security Agreement” shall have the meaning set forth in the recitals hereto.

“Subsidiary” means any Person in which a Guarantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing, collectively, “Subsidiaries”.

“Taxes” shall have the meaning set forth in Section 12(a) of this Guaranty.

 “Transaction Party” means the Company and the Guarantor, collectively, “Transaction Parties”.

SECTION 2.           Guaranty.

(a)             The Guarantor hereby unconditionally and irrevocably, guarantees to the Secured Party, the punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations, including, without limitation, all interest, make-whole and other amounts that accrue after the commencement of any Insolvency Proceeding of the Company whether or not the payment of such interest, make-whole and/or other amounts are enforceable or are allowable in such Insolvency Proceeding, and all fees, interest, premiums, penalties, causes of actions, costs, commissions, expense reimbursements, indemnifications and all other amounts due or to become due under any of the Transaction Documents (all of the foregoing collectively being the “Guaranteed Obligations”), and agrees to pay any and all costs and expenses (including counsel fees and expenses) incurred by the Secured Party in enforcing any rights under this Guaranty or any other Transaction Document.  Without limiting the generality of the foregoing, each Guarantor’s liability hereunder shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Company to the Secured Party under the Purchase Agreement and the Note but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Transaction Party.

(b)             The Guarantor, and by its acceptance of this Guaranty, the Secured Party hereby confirms that it is the intention of all such Persons that this Guaranty and the Guaranteed Obligations of the Guarantor hereunder not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal, provincial, state, or other applicable law to the extent applicable to this Guaranty and the Guaranteed Obligations of the Guarantor hereunder.  To effectuate the foregoing intention, the Secured Party and the Guarantor hereby irrevocably agree that the Guaranteed Obligations of the Guarantor under this Guaranty at any time shall be limited to the maximum amount as will result in the Guaranteed Obligations of the Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.

SECTION 3.           Guaranty Absolute; Continuing Guaranty; Assignments.

(a)             The Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Transaction Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Party with respect thereto.  The obligation of Secured Party under this Guaranty are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party is joined in any such action or actions.  The liability of the Guarantor under this Guaranty shall be as a primary obligor (and not merely as a surety) and shall be irrevocable, absolute and unconditional irrespective of, and the Guarantor hereby irrevocably waives, to the extent permitted by law, any defenses it may now or hereafter have in any way relating to, any or all of the following:

(i)            any lack of validity or enforceability of any Transaction Document;

(ii)           any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase in the Guaranteed Obligations resulting from the extension of additional credit to any Transaction Party or extension of the maturity of any Guaranteed Obligations or otherwise;

(iii)          any taking, exchange, release or non-perfection of any Collateral;

(iv)          any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed Obligations;

(v)           any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Transaction Party;

(vi)          any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any other Obligations of any Transaction Party under the Transaction Documents or any other assets of any Transaction Party or any of its Subsidiaries;

(vii)         any failure of Secured Party to disclose to any Transaction Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Transaction Party now or hereafter known to Secured Party (the Guarantor waiving any duty on the part of the Secured Party to disclose such information);

(viii)        taking any action in furtherance of the release of the Guarantor or any other Person that is liable for the Obligations from all or any part of any liability arising under or in connection with any Transaction Document without the prior written consent of the Secured Party; or

(ix)           any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Secured Party that might otherwise constitute a defense available to, or a discharge of, any Transaction Party or any other guarantor or surety.

(b)             This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Secured Party, or any other Person upon the insolvency, bankruptcy or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.

(c)             This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the Maturity Date of the Note (other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns.  This Guaranty shall inure to the benefit of and be enforceable by Secured Party, and its respective successors, and permitted pledgees, transferees and assigns.  Without limiting the generality of the foregoing sentence, the Secured Party may pledge, assign or 

otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to Secured Party (as applicable) herein or otherwise, in each case as provided in the Purchase Agreement or such Transaction Document.

SECTION 4.           Waivers.  To the extent permitted by applicable law, Guarantor hereby waives promptness, diligence, protest, notice of acceptance and any other notice or formality of any kind with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Secured Party exhaust any right or take any action against any Transaction Party or any other Person or any Collateral.  The Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Purchase Agreement and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits.  The Guarantor hereby waives any right to revoke this Guaranty, and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed Obligations, whether existing now or in the future.  Without limiting the foregoing, to the extent permitted by applicable law, the Guarantor hereby unconditionally and irrevocably waives (a) any defense arising by reason of any claim or defense based upon an election of remedies by Secured Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of Guarantor or other rights of Guarantor to proceed against any of the other Transaction Parties, any other guarantor or any other Person or any Collateral, and (b) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor hereunder.  The Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Secured Party to disclose to the Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Transaction Party or any of its Subsidiaries now or hereafter known by the Secured Party.

SECTION 5.           Subrogation.  Guarantor may not exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise from the existence, payment, performance or enforcement of any Guarantor’s obligations under this Guaranty, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of Secured Party against any Transaction Party or any other guarantor or any Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Transaction Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until there has been Payment in Full of the Guaranteed Obligations.  If any amount shall be paid to Guarantor in violation of the immediately preceding sentence at any time prior to Payment in Full of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Secured Party and shall forthwith be paid to the Secured Party to be credited and applied to the Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Transaction Document, or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising.  If (a) Guarantor shall make payment to the Secured Party of all or any part of the Guaranteed Obligations, and (b) there has been Payment in Full of the Guaranteed Obligations, the Secured Party will, at Guarantor’s request and expense, execute and deliver to Guarantor 

appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to Guarantor of an interest in the Guaranteed Obligations resulting from such payment by Guarantor.

SECTION 6.           Representations, Warranties and Covenants.

(a)             The Guarantor hereby represents and warrants as of the date first written above as follows:

(i)            Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all requisite corporate, limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated and to execute, deliver and perform its obligations under this Guaranty and each other Transaction Document to which Guarantor is a party, and to consummate the transactions contemplated hereby and thereby and (C) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary except where the failure to be so qualified (individually or in the aggregate) would not result in a Material Adverse Effect.

(ii)           The execution, delivery and performance by Guarantor of this Guaranty and each other Transaction Document to which Guarantor is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (B) do not and will not contravene its charter, articles, certificate of formation or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding on such Guarantor or its properties do not and will not result in or require the creation of any lien, security interest or encumbrance (other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (C) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its properties.

(iii)          No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is required in connection with the due execution, delivery and performance by Guarantor of this Guaranty or any of the other Transaction Documents to which Guarantor is a party (other than expressly provided for in any of the Transaction Documents).

(iv)          This Guaranty has been duly executed and delivered and is, and each of the other Transaction Documents to which Guarantor is or will be a party, when executed and delivered, will be, a legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, except as may be limited by the Bankruptcy Code or other applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).

(v)           There is no pending or, to the best knowledge of Guarantor, threatened action, suit or proceeding against Guarantor or to which any of the properties of such Guarantor is subject, before any court or other Governmental Authority or any arbitrator that (A) if adversely determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the other Transaction Documents to which Guarantor is a party or any transaction contemplated hereby or thereby.

(vi)          Guarantor (A) has read and understands the terms and conditions of the Purchase Agreement and the other Transaction Documents, and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from the Secured Party, any credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction Parties.

(vii)         There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.

(b)             Guarantor covenants and agrees that until Payment in Full of the Guaranteed Obligations, it will comply with each of the covenants (except to the extent applicable only to a public company) which are set forth in Section 4 of the Purchase Agreement as if Guarantor were a party thereto.

SECTION 7.           Right of Set-off.  Upon the occurrence and during the continuance of any Event of Default, the Secured Party may, and is hereby authorized to, at any time and from time to time, without notice to the Guarantor (any such notice being expressly waived by the Guarantor) and to the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Secured Party to or for the credit or the account of the Guarantor against any and all obligations of the Guarantor now or hereafter existing under this Guaranty or any other Transaction Document, irrespective of whether or not the Secured Party shall have made any demand under this Guaranty or any other Transaction Document and although such obligations may be contingent or unmatured.  The Secured Party agrees to notify the Guarantor promptly after any such set-off and application made by the Secured Party, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of the Secured Party under this Section 7 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Secured Party may have under this Guaranty or any other Transaction Document in law or otherwise.

SECTION 8.           Limitation on Guaranteed Obligations.

(a)             Notwithstanding any provision herein contained to the contrary, the Guarantor’s liability hereunder shall be limited to an amount not to exceed as of any date of determination the greater of:

(i)              the amount of all Guaranteed Obligations, plus interest thereon at the applicable Interest Rate as specified in the Note; and

(ii)            the amount which could be claimed by the Secured Party from the Guarantor under this Guaranty without rendering such claim voidable or avoidable under the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, Guarantor’s right of contribution and indemnification.

(b)             The Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guaranty hereunder or affecting the rights and remedies of the Secured Party hereunder or under applicable law.

(c)             No payment made by the Company, Guarantor, any other guarantor or any other Person or received or collected by the Secured Party from the Company, the Guarantor, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability of such Guarantor hereunder until after all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have been Paid in Full.

SECTION 9.           Notices, Etc. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Guaranty must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with an nationally recognized overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. All notices and other communications provided for hereunder shall be sent, if to Guarantor, to the Company’s address and/or facsimile number, or if to the Secured Party, to it at its respective address and/or facsimile number, each as set forth in Section 6(c) of the Purchase Agreement.

SECTION 10.         Governing Law; Jurisdiction.  All questions concerning the construction, validity, enforcement and interpretation of this Guaranty shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of Illinois.  Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Cook County, Illinois, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim, obligation or defense that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under Section 6(c) of the Purchase Agreement 

and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  Nothing contained herein shall be deemed or operate to preclude the Secured Party from bringing suit or taking other legal action against Guarantor in any other jurisdiction to collect on Guarantor’s obligations or to enforce a judgment or other court ruling in favor of the Secured Party.

SECTION 11.         WAIVER OF JURY TRIAL, ETC.  GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS GUARANTY, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

SECTION 12.         Taxes.

(a)             All payments made by Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the respective Transaction Document and shall be made without set-off, counterclaim, withholding, deduction or other defense.  Without limiting the foregoing, all such payments shall be made free and clear of and without deduction or withholding for any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding taxes imposed on the net income of the Secured Party by the jurisdiction in which the Secured Party is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities, collectively or individually, “Taxes”).  If Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:

(i)            the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including Taxes on amounts payable to the Secured Party pursuant to this sentence) the Secured Party receives an amount equal to the sum it would have received had no such deduction or withholding been made,

(ii)           Guarantor shall make such deduction or withholding,

(iii)          Guarantor shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law, and

(iv)          as promptly as possible thereafter, Guarantor shall send the Secured Party an official receipt (or, if an official receipt is not available, such other documentation as shall be satisfactory to the Secured Party, as the case may be) showing payment.  In addition, Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Guaranty or any other Transaction Document (collectively, “Other Taxes”).

(b)             Guarantor hereby indemnifies and agrees to hold each Indemnified Party harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other 

Taxes imposed by any jurisdiction on amounts payable under this Section 12) paid by any Indemnified Party  as a result of any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise with respect to, this Guaranty or any other Transaction Document, and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be paid within thirty (30) days from the date on which the Secured Party makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.

SECTION 13.         Indemnification.

(a)             Without limitation of any other obligations of Guarantor or remedies of the Secured Party under this Guaranty or applicable law, except to the extent resulting from such Indemnified Party’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction no longer subject to appeal, Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold harmless the Secured Party and each of its affiliates, officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection with or as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of any Transaction Party enforceable against such Transaction Party in accordance with their terms.

(b)             Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect, in contract, tort or otherwise) or any fiduciary duty or obligation to Guarantor or any of its respective affiliates, officers, directors, employees, agents and advisors, and Guarantor hereby agrees not to assert any claim against any Indemnified Party on any theory of liability, for special, indirect, consequential, incidental  or punitive damages arising out of or otherwise relating to the facilities, the actual or proposed use of the proceeds of the advances, the Transaction Documents or any of the transactions contemplated by the Transaction Documents.

SECTION 14.         Miscellaneous.

(a)             Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to the Secured Party, at such address specified by the Secured Party from time to time by notice to the Guarantor.

(b)             No amendment or waiver of any provision of this Guaranty and no consent to any departure by Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by Guarantor, and the Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(c)             No failure on the part of the Secured Party to exercise, and no delay in exercising, any right or remedy hereunder or under any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or under any Transaction Document preclude any other or further exercise thereof or the exercise of any other right or remedy.  The rights and remedies of the Secured Party provided herein and in the other 

Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.  The rights and remedies of the Secured Party under any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Secured Party to exercise any of its rights or remedies under any other Transaction Document against such party or against any other Person.

(d)             Any provision of this Guaranty that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

(e)             This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations (other than inchoate indemnity obligations) and shall not terminate for any reason prior to the Maturity Date of the Note (other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon the Guarantor and its respective successors and assigns.  This Guaranty shall inure, together with all rights and remedies of the Secured Party hereunder, to the benefit of and be enforceable by the Secured Party, and its successors, and permitted pledgees, transferees and assigns.  Without limiting the generality of the foregoing sentence, the Secured Party may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of the Purchase Agreement or any other Transaction Document to any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to the Secured Party herein or otherwise, in each case as provided in the Purchase Agreement or such Transaction Document.  None of the rights or obligations of the Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of the Secured Party.

(f)              This Guaranty and the other Transaction Documents reflect the entire understanding of the transaction contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.

(g)             Section headings herein are included for convenience of reference only and shall not constitute a part of this Guaranty for any other purpose.

SECTION 15.         Currency Indemnity.

If, for the purpose of obtaining or enforcing judgment against the Guarantor in any court in any jurisdiction, it becomes necessary to convert into any other currency (such other currency being hereinafter in this Section 15 referred to as the “Judgment Currency”) an amount due under this Guaranty in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be made at the rate of exchange prevailing on the Business Day immediately preceding (a) the date of actual payment of the amount due, in the case of any proceeding in the courts of the jurisdiction that will give effect to such conversion being made on such date, or (b) the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable date as of which such conversion is made pursuant to this Section 15 being hereinafter in this Section 15 referred to as the “Judgment Conversion Date”).

If, in the case of any proceeding in the court of any jurisdiction referred to in the preceding paragraph, there is a change in the rate of exchange prevailing between the Judgment Conversion Date and the date of actual receipt of the amount due in immediately available funds, the Guarantor shall pay such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually received in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the rate of exchange prevailing on the Judgment Conversion Date.  Any amount due from the Guarantor under this Section 15 shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts due under or in respect of this Guaranty.

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.

	 	
GUARANTOR:

	 	
SPORT ENDURANCE, INC.

 

 

 

By:                                                                              

Name: David Lelong

Title: President and CEOExhibit 10.3

 

	
CONFIDENTIAL

	
Execution copy

CONFIDENTIAL BTC LENDING PROGRAM PARTICIPATION AGREEMENT

This CONFIDENTIAL BTC LENDING PROGRAM PARTICIPATION AGREEMENT (this “Agreement”) is entered into on March 12, 2018 (the “Effective Date”), by and between Yield Endurance, Inc., a New Jersey corporation with an office at 101 Hudson Street, 21st Floor, Jersey City, New Jersey 07302 (the “Company”), and Madison Partners, LLC, a Delaware limited liability company having a primary place of business at 200 S. Wacker Dr. Suite 3211, Chicago, IL, 60606 (“Madison”).

RECITALS

WHEREAS, Madison owns certain business methods, licenses and techniques associated with Bitcoin assets (“BTC”) for loan to third parties and wishes to grant to the Company the non-exclusive right to utilize its methods and techniques to identify, qualify and loan BTC to third parties; and

WHEREAS, the Company owns BTC and wishes to engage in the business of BTC lending through Madison for such purposes.

NOW IT IS THEREFORE RESOLVED, that in consideration for the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as set forth herein.

AGREEMENT

1. Definitions

“Affiliate” means, with respect to any Person (as defined herein), any other Person that directly, or through one or more intermediaries, controls or is controlled by or is under common control with such Person.  For purposes of this Agreement, “control” shall mean, as to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise (and the terms “controlled by” and “under common control with” shall have correlative meanings).

“Bitcoin” means the type of virtual currency based on an open source cryptographic protocol existing on the Bitcoin Network.

“Bitcoin Address” means an identifier of 26-34 alphanumeric characters that represents a possible destination for a transfer of Bitcoin.

“Business Day” means a day when banks are open for business in the State of Illinois excluding weekends.

“Company’s Initial Return” means ten (10%) percent of the Participation Income (as defined herein) in any calendar month or partial month (either a “Calendar Month”).

“Company Participation Percentage” for any particular Calendar Month means fifty (50%) percent of the Participation Income in excess of ten (10%) percent during any Calendar Month, in each case.

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“Deductible Expenses,” for any particular Calendar Month, means all out-of-pocket costs incurred by Madison  or its Affiliates where such costs are directly incurred from BTC lending on behalf of the Company, including, payments to miners  and taxing authorities for taxes other than income taxes.

“Lender” means ____________.

“Madison Participation Percentage” for any particular Calendar Month means fifty (50%) percent of the Participation Income in excess of ten (10%) percent during any Calendar Month, in each case.

“Participation Income” for any particular Calendar Month means Madison’s  gross fees received for such Calendar Month as a result of BTC lending solely attributable to BTC delivered by or on behalf of the Company minus the Deductible Expenses.  All calculations of “Participation Income” shall be made in accordance with U.S. generally accepted accounting principles as in effect from time to time.

“Person” means a person, corporation, partnership, limited liability company, joint venture, trust or other entity or organization.

2. DEPOSIT OF BTC

2.1             The Company (as bailor) shall deliver or cause to be delivered BTC in an initial amount valued at $5 million in United States dollars on the later of the Effective Date or the date of delivery to Madison’s BTC wallet in accordance with instructions provided by Madison (as bailee) to the Company.  At or before the delivery, the Company shall deliver or cause to be delivered to Madison the necessary private keys to the BTC on the blockchain so that Madison can perform its duties under this Agreement.

2.2             Madison shall use its best efforts to use the BTC delivered by or on behalf of the Company to lend such BTC to such third parties (the “Borrowers”) in exchange for fees paid by Borrowers to Madison, pursuant to one or more Master Bitcoin Loan Agreements entered into by and between Madison and third-parties substantially in the form approved by the Company (each a “Master Bitcoin Loan Agreement” and collectively, the “Master Bitcoin Loan Agreements”).  Madison shall deliver or cause to be delivered to the Company, any and all documents received in support of a Master Bitcoin Loan Agreement.  The Company shall have the right in its sole and absolute discretion to veto any loans to be made to the Borrowers by providing notice within one Business Day after receipt of any proposed Master Bitcoin Loan Agreement and supporting documentation.

2.3             The Company agrees and understands that neither Madison nor any of its Affiliates makes any promises or commitments relating to the profitability of Madison’s lending efforts.  Madison may terminate and suspend or discontinue all BTC lending activities in the event that any consent or approval is required to undertake such activities.

2.4.            Participation Payments.

(a)                 Madison will (i) wire transfer to the Company within five days following the end of each Calendar Month such account as specified in writing by an authorized 

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Company representative, an amount equal to:  the applicable Company Initial Return plus the Company Participation Percentage for the most recently completed Calendar Month (“Participation Payments”) which shall be maintained in a segregated account not subjected to the claims of any creditors except those creditors who are (A) Borrowers under the Master Bitcoin Loan Agreements  or, (B) the Company and (ii) allocate to itself an amount equal to the Madison Participation Percentage.  Madison will provide the Company with a calculation of the amount due per this Section 2.4 providing sufficient detail to permit the Company to verify the accuracy of such calculation (the “Calculation Statement”).  Any disputes with respect to the calculation of any payment amounts in this Section 2.4 shall be resolved by means of the process set forth in this Section 2.4.

(b)                 Madison shall keep full, clear and accurate records with respect to the Participation Income and Participation Payments as required in this Section 2.3 and shall furnish any information which the Company or its auditors may reasonably prescribe from time to time to enable the Company to verify the proper Participation Payments due under this Agreement.  Madison shall retain such records with respect to the Participation Payments for at least five (5) years from each such payment.  The Company shall have the right, twice in any calendar year, to make an examination, during normal business hours, of all records and accounts bearing upon the amount of Participation Payments payable to it under this Agreement.  Prompt adjustment shall be made to compensate for any errors or omissions disclosed by such examination.  The Company shall be responsible for all of its costs of any such audit unless the audit reveals an underpayment by Madison of at least $10,000 for the audited period.  In such an event, Madison shall be responsible for the Company’s costs of the audit, including all professional fees incurred.  In the event that following delivery of a monthly report or a report from the Company’s auditors, it is determined that there was an underpayment or an overpayment, the delinquent party shall promptly make a payment of underpayment or overpayment within ten (10) days to the other party.

(c)                 If a dispute arises with respect to the amounts due per this Section 2.4, the parties will negotiate the matter in good faith during a four (4) week period.  If a dispute remains after such good faith negotiations, the parties will as expeditiously as possible (in any event within sixty (60) days) seek mediation to resolve the remaining matters.  If no agreement is reached, the parties may exercise all rights available hereunder at law or in equity.

3. Closing, Delivery and Payment

3.1             Closing.  The Closing of the transactions contemplated by this Agreement shall take place at the offices of Sichenzia Ross Ference Kesner LLP, at 10:00 a.m., Eastern Time, on such date all closing conditions have been satisfied, or at such other place, time or date as may be mutually agreed upon in writing by Madison and the Company (the “Closing Date”).  The Closing shall occur only upon the satisfaction or waiver of the conditions required by (i) Madison as set forth in Section 5.1 hereof (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of those conditions); (ii) the Company as set forth in Section 5.2 hereof (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of those conditions).

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4. Termination, Term

4.1             This Agreement may be terminated at any time prior to the Closing:

(a)                 by mutual written consent of Madison and the Company;

(b)                 by Madison, if the Closing has not occurred by 5:00 p.m., Eastern Time, on the Closing Date; or

(c)                 by Madison, on thirty (30) days prior written notice.

4.2             This Agreement may be terminated at any time following the Closing by the Company on 30 days’ prior written notice only if the party which holds a security interest pursuant to that certain Original Issue Discount Secured Demand Promissory Note made by the Company in favor of the Lender (the “Note”) makes a demand for payment under the Note.

4.3             Procedure Upon Termination.

(a)                 Madison shall immediately suspend the extension of loans of BTC under this Agreement by or on behalf of the Company and cause to be redelivered to the Company all BTC initially delivered by the Company pursuant to Section 2.1 of this Agreement; provided however, to the extent that the term of a Master Bitcoin Loan Agreement with a third party has not yet expired, Madison shall immediately on expiration of such Master Bitcoin Loan Agreement redeliver such BTC to the Company.  In the event, the BTC has been loaned in an Open deal as defined in the Master Bitcoin Agreement, Madison shall exercise the Callable Option and immediately redeliver such BTC to the Company. Madison agrees that the Company shall be a third party beneficiary under each of the Master Bitcoin Loan Agreements.

(b)                 Upon termination pursuant to this Article 4, Madison shall pay the Company’s Initial Return and Company Participation Percentage as provided herein.

4.4             This Agreement shall remain in effect for so long as:

(a) the Company’s Note is outstanding to Lender (the “Term”);

(b) as the Parties may mutually agree.

5. Closing Conditions

5.1             Conditions to Madison’s Obligation to Close.  Madison’s obligation to consummate the transactions contemplated hereby is subject to the satisfaction or waiver on or prior to the Closing Date of the following conditions:

(a)                 The Company shall have performed in all material respects all of the covenants and agreements required to be performed by it under this Agreement at or prior to the Closing.

(b)                 The Company shall have entered into one or more arrangements to borrow five million ($5,000,000) in BTC and the closing of the transactions contemplated in that 

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certain Note Purchase Agreement dated as of the date hereof, by and between the Company and the Lender (the “Note Purchase Agreement”).

6. Covenants

6.1             Further Assurances.  Madison covenants and agrees that after the Closing Date, it will upon request, and without further consideration, execute and deliver to the Company any other documents and materials, and take any further actions (including using commercially reasonable efforts to ensure the cooperation of Madison), that are reasonably necessary for the Company to monitor the business of Madison as contemplated herein.

6.2             Conduct of Business.  From the Effective Date through the later of the Closing Date or the termination of this Agreement in accordance with the terms herein, except as otherwise contemplated by this Agreement or required by law, without the Company’s consent, Madison shall not, and shall cause its Affiliates not to:

(a)                 lend, grant or permit any encumbrance under or with respect to any BTC delivered by the Company pursuant to Section 2.1 of this Agreement, except those loans, grants or encumbrances which may occur solely by virtue of Madison’s duties under Section 2.2 hereof;

(b)                 waive, release, assign, settle or compromise any loan or any cause of action to the extent that such waiver, release, assignment, settlement or compromise imposes any obligation, whether contingent or realized, that will bind the Company after the Closing Date;

(c)                 fail to make any filing, pay any fee, or take any other action necessary to maintain the ownership, validity and enforceability of any loan, grant or encumbrance of any BTC that is a loan to a Borrower under any the Master Bitcoin Loan Agreements, including using reasonable best efforts to preserve any and all claims under any intellectual property including any patent subject to reexamination (if any);

(d)                 engage in a loan of the BTC unless the Borrower under the Master Bitcoin Loan Agreement has first deposited into a segregated account solely used for fees and collateral relating to the BTC owned by the Company a sum in United States dollars equal to 100% of the value in dollars of the BTC which is being lent to a Borrower by Madison;

(e)                 initiate any action under or with respect to any of the loans, grants or encumbrances; or

(f)                  enter into any binding agreement or commitment to take any of the foregoing actions.

6.3             Public Announcements.  Except as otherwise required by law or by any applicable Trading Market (as defined in the Note Purchase Agreement), no party shall issue any press release or make other public statements with respect to the transactions contemplated by this Agreement or identifying the other party by name without the prior written consent of 

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such party.  Further, if either party is required by law or by any applicable Trading Market to issue a press release or other public statement, such party will provide the other party to the extent practicable an advance copy of the press release or public statement and allow such other party to review and propose comments to the press release or public statement.

6.4             Tax Matters.  All sales, use, transfer, business and occupation, documentary, stamp, registration, excise, value added and similar taxes and fees (including any penalties and interest) incurred in connection with the payments required hereunder and any related transaction documents shall be borne and paid by Madison when due.  Madison shall, at its own expense, timely prepare and file any tax return or other document required with respect to such taxes or fees (and the Company shall cooperate with respect thereto as necessary).

7. Representations and Warranties

7.1             Madison hereby represents and warrants to the Company that as of the Closing Date and throughout the Term:

(a)                 Organization and Qualification.  Madison is and shall continue to be an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Madison is not and will not be in violation nor default of any of the provisions of its certificate or articles of incorporation, bylaws or other organizational or charter documents.  Madison is and shall remain duly qualified to conduct its business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of Madison, or (iii) a material adverse effect on Madison’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and, no proceeding has been or will have been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(b)                Authorization; Enforcement.  Madison has and will continue to have the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement by Madison and the consummation by it of the transactions contemplated hereby and thereby have been and will continue to be duly authorized by all necessary action on the part of Madison and no further action is or will be required by Madison, the Board of Directors or Madison’s stockholders in connection herewith or therewith.  This Agreement and each other transaction document to which it is a party has been (or upon delivery will have been) duly executed by Madison and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of Madison enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, liquidation moratorium and other laws 

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of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(c)                 No Conflicts.  The execution, delivery and performance by Madison of this Agreement and the other transaction documents to which it is a party, the receipt of BTC from the Company and the lending of BTC to Borrowers hereunder and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not: (i) conflict with or violate any provision of Madison’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of Madison, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Madison debt or otherwise) or other understanding to which Madison is a party or by which any property or asset of Madison is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Madison is subject (including federal and state securities laws and regulations), or by which any property or asset of Madison is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(d)                 Filings, Consents and Approvals. Madison is and will not be required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other provincial or foreign or domestic federal, state, local or other governmental authority or other person or entity in connection with the execution, delivery and performance by Madison of the transaction documents.

(e)                 Litigation. To the knowledge of Madison, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of Madison, threatened against or affecting Madison, any Affiliates or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) that would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect, nor to the knowledge of Madison  is there any reasonable basis for any such Action that would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  To the knowledge of Madison, there is not pending or contemplated, any investigation by the United States Securities and Exchange Commission involving Madison or, to the knowledge of Madison, any current or former director or officer of Madison, nor any current or former officer, director, control person, principal shareholder, or creditor with respect to the relationship of any of the foregoing to Madison or any of its Affiliates.

(f)                  Compliance.  To Madison’s knowledge, neither Madison: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by Madison under), nor has Madison received notice of a claim that it is in default under or that it is in violation of, 

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any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to lending, money laundering, blockchain related matters including cryptocurrency laws or initial coin offerings, taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not reasonably be expected to result in a Material Adverse Effect.  Madison has all required licenses and permits necessary to carry out its current and proposed business, except where the failure to have such licenses or permits would not result in a Material Adverse Effect.  Madison further acknowledges and agrees that it shall not take any action that would subject Madison or the Company to comply with any applicable New York BitLicense or any other applicable New York State regulatory license or permits.

(g)                 Reserved.

(h)                 Licenses.  Madison has all licenses and permits necessary to carry out its obligations and duties with respect to the Company and Borrowers under this Agreement, except where the failure to have a license or permit will not have a Material Adverse Effect upon Madison or the Company.

(i)                  No Other Representations or Warranties.  Except as expressly provided in this Section 7.1, Madison makes no other representations and/or warranties of any kind, either express or implied, statutory, by usage of trade, custom of dealing, or otherwise, and Madison specifically disclaims any implied representations and/or warranties of merchantability, satisfactory quality or fitness for a particular purpose.

7.2             The Company hereby represents and warrants to Madison that as of the Closing Date and throughout the Term:

(a)                 Organization and Qualification.  The Company is and shall continue to be an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  The Company is not and will not be in violation nor default of any of the provisions of its certificate or articles of incorporation, bylaws or other organizational or charter documents.  The Company is and shall remain duly qualified to conduct its business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Company Material Adverse Effect”) 

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and, no proceeding has been or will have been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(b)                Authorization; Enforcement.  The Company has and will continue to have the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been and will continue to be duly authorized by all necessary action on the part of the Company and no further action is or will be required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith.  This Agreement and each other transaction document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, liquidation moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(c)                 No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other transaction documents to which it is a party, the receipt of BTC from the Lender and the consummation by it of the transactions contemplated hereby and thereby to which it is a party do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Company Material Adverse Effect.

(d)                 Filings, Consents and Approvals.  The Company is and will not be required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other provincial or foreign or domestic federal, state, local or other governmental authority or other person or entity in connection with the execution, delivery and performance by the Company of the transaction documents.

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(e)                 Litigation.  To the knowledge of The Company, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Affiliates or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, a “Company Action”) that would, if there were an unfavorable decision, have or reasonably be expected to result in a Company Material Adverse Effect, nor to the knowledge of the Company is there any reasonable basis for any such Company Action that would, if there were an unfavorable decision, have or reasonably be expected to result in a Company Material Adverse Effect.  To the knowledge of the Company, there is not pending or contemplated, any investigation by the United States Securities and Exchange Commission involving the Company or, to the knowledge of the Company, any current or former director or officer of the Company, nor any current or former officer, director, control person, principal shareholder, or creditor with respect to the relationship of any of the foregoing to the Company or any of its Affiliates.

(f)                  Compliance.  To the Company’s knowledge, neither the Company: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to lending, money laundering, blockchain related matters including cryptocurrency laws or initial coin offerings, taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not reasonably be expected to result in a Company Material Adverse Effect.  The Company has all required licenses and permits necessary to carry out its current and proposed business, except where the failure to have such licenses or permits would not result in a Company Material Adverse Effect.

(g) No Other Representations or Warranties.  Except as expressly provided in this Section 7.2, the Company makes no other representations and/or warranties of any kind, either express or implied, statutory, by usage of trade, custom of dealing, or otherwise.

7.3             Survival.  The representations, warranties, covenants and agreements of the parties contained in this Agreement shall survive the Closing and continue in full force and effect until the later of (i) the second anniversary of the Closing Date, or (ii) so long as the Note is outstanding to the Lender.  All covenants or agreements of the parties that are to be performed in whole or in part after the Closing Date shall survive for the period provided in such covenants or agreements, if any, or until fully performed.

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8. Miscellaneous

8.1             Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois.  EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF, AND VENUE IN, ANY FEDERAL OR STATE COURT OF COMPETENT JURISDICTION LOCATED IN COOK COUNTY, STATE OF ILLINOIS, SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREIN, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION FOR THE INTERPRETATION OR ENFORCEMENT HEREOF, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPLICABLE OR THAT THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY SAID COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION SHALL BE HEARD AND DETERMINED IN SAID COURTS.  THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE.

8.2             LIMITATION ON CONSEQUENTIAL DAMAGES.  EXCEPT IN THE CASE OF FRAUD, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR LOSS OF PROFITS, OR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON POTENTIAL DAMAGES WERE AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER THIS AGREEMENT.

8.3             RESERVED.

8.4             Confidentiality. Except as otherwise provided in Section 6.3, from and after the Closing, the parties shall not (and shall cause their respective agents and/or Affiliates not to) use or disclose any information concerning this Agreement or the transactions contemplated herein to any third party except (i) with the prior written consent of the other party; (ii) to any governmental body having jurisdiction to require disclosure or to any arbitral body, to the extent required by same; (iii) as otherwise may be required by law or legal process, including to legal and financial advisors in their capacity of advising a party in such matters; (iv) during the course of litigation, so long as the disclosure of such terms and conditions are restricted in the same manner as is the confidential information of other litigating parties; or (v) in confidence to its legal counsel, accountants, banks and financing sources and their advisors in the normal course of business or in connection with strategic or financial transactions; provided that, in (ii) through (v) above, (a) each party shall use all legitimate and legal means available to minimize the disclosure to third parties, including seeking a confidential treatment request or protective order whenever appropriate or available; and (b) except for permitted disclosures to legal and financial advisors and accountants, a party shall provide the other party with at least ten (10) Business Days’ prior written notice of such disclosure.

8.5             Entire Agreement.  The terms and conditions of this Agreement, including its exhibits, constitutes the entire agreement between the parties with respect to the subject matter 

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hereof, and merges and supersedes all prior and contemporaneous oral agreements, understandings, negotiations and discussions.  Neither of the parties shall be bound by any conditions, definitions, warranties, understandings, or representations with respect to the subject matter hereof other than as expressly provided herein or in any of the transactions documents in connection herewith.  The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  No amendments or modifications shall be effective unless in writing signed by authorized representatives of both parties.  These terms and conditions will prevail notwithstanding any different, conflicting or additional terms and conditions, which may appear on any, acknowledgment or other writing not expressly incorporated into this Agreement.  This Agreement may be executed in two (2) or more counterparts, all of which, taken together, shall be regarded as one and the same instrument.

8.6             Notices.  All notices required or permitted to be given hereunder shall be in writing, shall make reference to this Agreement, and shall be delivered by hand, or dispatched by prepaid air courier or by email, addressed as follows:

	
If to Madison

Madison Partners, LLC

 

	
If to the Company

Yield Endurance, Inc.

101 Hudson Street, 21st Floor

Jersey City, New Jersey 07302

Email: david@sportendurancehq.com

Attention: Mr. David Lelong

 

Such notices shall be deemed served when received by addressee or, if delivery is not accomplished by reason of some fault of the addressee, when tendered for delivery.  Either party may give written notice of a change of address and, after notice of such change has been received, any notice or request shall thereafter be given to such party at such changed address.

8.7             Relationship of Parties.  The parties hereto are independent contractors.  Neither party has any express or implied right or authority to assume or create any obligations on behalf of the other or to bind the other to any contract, agreement or undertaking with any third party.  Nothing in this Agreement shall be construed to create a partnership, joint venture, employment or agency relationship between Madison and the Company.

8.8             Severability.  The terms and conditions stated herein are declared to be severable.  If any paragraph, provision, or clause in this Agreement shall be found or be held to be invalid or unenforceable in any jurisdiction in which this Agreement is being performed, the remainder of this Agreement shall be valid and enforceable and the parties shall use good faith to negotiate a substitute, valid and enforceable provision which most nearly effects the parties’ intent in entering into this Agreement.

8.9             Waiver.  Failure by either party to enforce any term of this Agreement shall not be deemed a waiver of future enforcement of that or any other term in this Agreement.

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8.10           Assignment of Agreement.  The terms and conditions of this Agreement shall inure to the benefit of any successors, assigns and other legal representatives of the Company, and shall be binding upon Madison, its successor, assigns and other legal representatives.

8.11         WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

[Signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Confidential BTC Lending Program Participation Agreement as of the Effective Date.

	
YIELD ENDURANCE, INC.

	MADISON PARTNERS, LLC
	
 

	
 

	
 

	 	
 

	 
	
Signature

	
Signature

	
 

	
 

	
David Lelong

	 	
 

	 
	
Printed Name

	
Printed Name

	
 

	
 

	
Chief Executive Officer

	 	
 

	 
	
Title

	
Title

	
 

	
 

	3/12/18	 	 	 
	Date	
Date

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