Exhibit 10.68
LOAN AGREEMENT
This Agreement, is made this 16th day of January, 2001, by and among: ▇▇▇▇▇
FARGO BANK WEST, N.A., TRUSTEE OF THE ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ROLLOVER ▇▇▇, (formerly,
Norwest Bank Colorado, National Association, Trustee of the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Rollover ▇▇▇) (▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
& ▇▇▇▇ ▇. ▇▇▇▇▇▇ (COLLECTIVELY "▇▇▇▇▇▇"), (▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇
COLLECTIVELY ARE "LENDER"); OPEC CORP., a Colorado corporation, ("OPEC") and
FUTUREONE, INC., a Nevada corporation ("FUTO"), (collectively, "Borrower"); and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Guarantor").
WHEREAS, Borrower has applied to ▇▇▇▇▇▇ and Ventimiglia for a new revolving
credit line loan in the amount of THREE HUNDRED THOUSAND and 00/100ths DOLLARS
(U.S. $300,000.00) in order to meet its cash flow business obligations, ("New
Loan") and,
WHEREAS, Borrower has applied to Lender to modify and extend a loan made by
OPEC dated August 27, 1999 in the principal amount of $1,000,000.00 ("Second
Amendment"); and,
WHEREAS, Guarantor has a substantial economic interest in the success of
Borrower and desires that the Borrower and the Lender enter into the New Loan,
Second Amendment, and
WHEREAS, ▇▇▇▇▇▇ and Ventigmilia desire to make the aforesaid New Loan and
Lender desires to modify the existing loan subject to the following terms and
conditions,
NOW, THEREFORE, for and in consideration of the following mutual agreements
and other good and valuable considerations, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1. NEW LOAN. ▇▇▇▇▇▇ and Ventigmilia agree to lend Borrower THREE HUNDRED
THOUSAND and no/100ths DOLLARS (U.S. $300,000.00) on the following terms:
INTEREST RATE: 15% per annum.
TERM: Due December 31, 2002.
PAYMENTS: All accrued but unpaid interest on the 1st day of February, 2001, and
on the first day of each month thereafter. The entire outstanding principal
balance, together with all accrued and unpaid interest and all other sums due
hereunder, shall be due in full on December 31, 2002, IN A BALLOON PAYMENT.
Borrower understands this Note is payable in full on December 31, 2002, and that
this Note is a balloon payment loan. The Lender is under no obligation to
refinance the loan at that time. Borrower will therefore be required to make
payment out of other assets it may own, or it will have to find a Lender willing
to lend it money at prevailing market rates, which may be considerably higher
than the interest rate of this loan. If Borrower refinances this loan at
maturity, it may have to pay some or all closing costs normally associated with
a new loan, even if it obtains refinancing from the same Lender. Notwithstanding
anything to the contrary stated herein, Lender shall have the right, in its sole
and absolute discretion, to call this Note, in whole or in part, at any time
after February 28, 2001. If Lender exercises its call privilege, the entire
outstanding principal balance called, together with all accrued and unpaid
interest and all other sums due hereunder, shall be due in full immediately. If
Borrower fails to repay the principal and interest as required under this
paragraph, then the Lender may invoke any of the remedies permitted by the Note
and UCC Security Agreement.
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PREPAYMENT RESTRICTIONS: This note may be prepaid at any time in whole or in
part upon fifteen (15) days' written notice to Lender.
REVOLVING LOAN: During the term of the Loan and so long as Borrower is not in
default, Borrower shall have the right to pay down the Loan in whole or in part,
and shall have the right to make up to six (6) draws of principal each calendar
year during the term of the Loan so long as the total unpaid principal balance,
at no time, exceeds Three Hundred Thousand Dollars ($300,000.00).
2. SECOND AMENDMENT TO AUGUST 27, 1999 LOAN. Lender and Borrower agree that
the terms of the August 27, 1999 Loan shall be modified as follows:
AMENDED AND EXTENDED PAYMENT SCHEDULE: All accrued but unpaid interest is due on
the 1st day of February 2001, and on the first day of each month thereafter. The
entire outstanding principal balance, together with all accrued and unpaid
interest and all other sums due hereunder, shall be due in full on December 31,
2002 in a balloon payment. Maker understands this Note is payable in full on
December 31, 2002 and that this Note is a balloon payment loan. The Lender is
under no obligation to refinance the loan at that time. Maker will therefore be
required to make payment out of other assets it may own, or it will have to find
a Lender willing to lend it money at prevailing market rates, which may be
considerably higher than the interest rate of this loan. If Maker refinances
this loan at maturity, it may have to pay some or all closing costs normally
associated with a new loan, even if it obtains refinancing from the same Lender.
Notwithstanding anything to the contrary stated herein, Lender shall have the
right, in its sole and absolute discretion, to call this Note, in whole or in
part, at any time after February 28, 2001. If Lender exercises its call
privilege, the entire outstanding principal balance called, together with all
accrued and unpaid interest and all other sums due hereunder, shall be due in
full immediately. If Maker fails to repay the principal and interest as required
under this paragraph, then the Lender may invoke any of the remedies permitted
by the Note and Security Agreement.
DELETION OF CONVERSION PRIVILEGE: The Conversion Privilege set forth in the Note
and the Modified Conversion Privilege set forth in the First Amendment are both
deleted in their entirety.
3. FACTORING. OPEC has identified another Lender that is willing to
purchase or factor certain of OPEC's accounts receivables, which are encumbered
by the Security Agreement ("Factoring Lender"). The Lender shall, in its sole
and absolute discretion, consider consenting to periodically releasing
identified portions of OPEC's accounts receivable from the Security Agreement
upon terms and conditions which may be acceptable to Lender. Prior to
considering any release of collateral for the purposes of factoring, Borrower
shall provide current financial data in form and substance satisfactory to
Lender. All such current financial data shall be current, true and correct when
supplied and shall not be misleading in any respect whatsoever. Other than
factoring which may be approved by Lender, from time to time, Borrower shall not
borrow any funds without first obtaining the express written consent of Lender,
which consent may be withheld in the sole and absolute discretion of Lender.
4. ADDITIONAL TERMS: Additional terms are set forth in the Note and Second
Amendment to Collateralized Convertible Commercial Promissory Note and Security
Agreement, copies of which are attached hereto as Exhibit A, Exhibit B and,
EXHIBIT C respectively, and incorporated herein.
5. LOAN ORIGINATION AND EXTENSION FEE. Borrower agrees to provide the
following to ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ and Lender in consideration for ▇▇▇▇▇▇ and
Venitigmilia's agreeing to make the New Loan and Lender agreeing to the Second
Extension:
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(a) The 360,000 Common Stock Purchase Warrants, which Lender has
previously earned pursuant to the First Amendment, and approved by the
Board of Directors of FUTO effective July 27, 2000, shall be issued
and delivered forthwith at an exercise price of $0.20 per share, in
lieu of the previously-agreed upon exercise price of $1.00 per share.
These warrants shall be valid for a period of five (5) years from the
date of delivery to Lender and shall not be callable. These Warrants
shall be issued 50% to ▇▇▇▇▇▇, 40% to Ventimiglia and 10% to ▇▇▇▇▇▇.
(b) Borrower shall forthwith issue and deliver an additional One Million
Common Stock Purchase Warrants for shares of Common Stock in FUTO, at
an exercise price of $0.20 per share. In all other respects these
Warrants shall contain the same terms and conditions as the 360,000
warrants referred to herein above. These Warrants shall be issued 50%
to ▇▇▇▇▇▇ and 50% to Ventimiglia.
(c) Borrower shall execute and deliver to Lender an additional 600,000
Common Stock Purchase Warrants for shares of Common Stock in the
Corporation, at an exercise price of $0.40 per share. In all other
respects these Warrants shall contain the same terms and conditions as
the 360,000 warrants referred to herein above. These Warrants shall be
issued 50% to ▇▇▇▇▇▇, 40% to Ventimiglia and 10% to ▇▇▇▇▇▇.
(d) If FUTO, at any time, pays to the holders of its Common Stock a
dividend in Common Stock prior to the exercise of any of the warrants
issued hereunder, the number of Warrants shall be proportionately
increased, effective at the close of business on the record date for
determination of the holders of the Common Stock entitled to the
dividend.
(e) If FUTO, at any time, subdivides or combines in a larger or smaller
number of shares, its outstanding shares of Common Stock, then the
number of Warrants issued hereunder shall be proportionately increased
in the case of a subdivision and decreased in the case of a
combination, effective in either case at the close of business on the
date that the subdivision or combination becomes effective.
(f) If FUTO is recapitalized, consolidated with or merged into any other
corporation, or sells or conveys to any other corporation all or
substantially all of its property as an entity, provision shall be
made as part of the terms of the recapitalization, consolidation,
merger, sale or conveyance so that the Lender may receive, in lieu of
the Warrants, otherwise issuable to it pursuant to the terms hereof,
the same kind and amount of securities or assets as may be
distributable upon the recapitalization, consolidation, merger, sale
or conveyance with respect to the Common Stock.
(g) In lieu of issuing any fraction of a share or script upon the exercise
of any Warrant, FUTO shall pay to Lender, for any fraction of a share
otherwise issuable upon exercise of a Warrant, cash equal to the same
fraction of the then current per share market price of the Common
Stock as determined by the closing price of such Common Stock on the
day immediately preceding such payment.
(h) The Loan Origination and Extension Fees set forth herein shall be
deemed to have been earned, in full, on the date the New Note and
Second Extension are executed and delivered from Borrower to Lender.
6. LOAN DISBURSEMENT. The parties agree that the loan shall be disbursed as
requested by Borrower subject to the Revolving Loan provisions.
7. UCC SEARCH. Lender shall conduct a UCC search on Borrower which search
shall contain no matters unacceptable to Lender.
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8. CLOSING COSTS. Borrower shall pay all costs and expenses incidental to
this loan transaction, including but not limited to, UCC search fees, filing
fees, wire transfer fees, closing fees, and Lender's attorney's fees which
attorney's fees shall not exceed $5,000.00.
9. GUARANTY. The New Loan and Second Amendment shall be personally
guaranteed by Guarantor.
10. SECURITY. Upon Closing, the Borrower shall execute and deliver to
Lender a UCC security agreement and financing statement securing the New Loan
and Second Extension to be executed in conjunction herewith and securing all of
Borrower's assets. The New Note, Second Amendment, UCC Security Agreement and
Guaranty shall be in a form satisfactory to Lender. It is a condition precedent
to Lender's obligations pursuant to this Second Amendment that the loan from
Original Maker to U.S. Bank, National Association, is paid in full and that U.S.
Bank, National Association, release all of its security interest over property
owned by Maker.
11. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants as
follows:
a. ORGANIZATION, STANDING, OF OPEC. OPEC is, and at Closing will be a
Corporation, duly organized validly existing and in good standing under the
laws of the State of Colorado, with all requisite corporate power and
authority to own and operate its properties and to carry on its business as
now conducted; OPEC has, and at Closing will have all requisite corporate
power and authority to enter into this Loan Agreement and to carry out the
terms hereof.
b. ORGANIZATION, STANDING, OF FUTUREONE, INC. FutureOne, Inc. ("FUTO")
is, and at Closing will be a corporation duly organized and validly
existing and in good standing under the laws of the State of Nevada, with
all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted; FUTO has and at
Closing will have all requisite corporate power and authority to enter into
this Agreement and to carry out the terms hereof and thereof. OPEC is a
wholly owned subsidiary of FUTO.
c. FINANCIAL STATEMENTS. Borrower has furnished Lender with the
following financial statements: (a) audited statement of income for the one
year ten month period ended July 28, 1998 and one period ending September
30, 1999 and September 30, 2000; and audited balance sheets as of July 28,
1998 and; (b) unaudited income statements for the nine month period ended
June 30, 1999 and for the three month period ending December 31, 2000 and
unaudited balance sheets as of August 26, 1999 and December 31, 2000. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis and fairly
present the financial position of the Borrower as of the dates thereof and
the results of operations included therein for such periods.
d. NO MATERIAL ADVERSE CHANGE IN FINANCIAL CONDITION OR AFFAIRS. From
September 30, 2000 to Closing, there has been no material adverse change in
the assets, liabilities, financial condition or affairs of Borrower from
that set forth or reflected in the financial statements as of September 30,
2000 referred to hereinabove.
e. NO DEFAULT ON OTHER DEBT. Neither Borrower nor FUTO is in default
in respect to the payment of any indebtedness or the observance of any
covenant or condition, which would enable the creditor to accelerate the
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maturity of its indebtedness, set forth in any instrument or agreement
relating thereto.
f. NO STOCKHOLDER OR GOVERNMENTAL CONSENT REQUIRED. No consent,
approval, or authorization by the holder of any shares of Borrower or by
any governmental authority is presently required in connection with the
execution and delivery of this Agreement or the consummation of any other
transaction contemplated hereby.
g. DISCLOSURE. Neither any statement furnished to you in writing by or
on behalf of Borrower in connection with the transactions contemplated
hereby contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein
not misleading.
h. AUTHORIZATION, EXECUTION AND DELIVERY OF NOTE, SECOND AMENDMENT AND
SECURITY AGREEMENT. The Note, Second Amendment and Security Agreement have
been duly and validly authorized, and when executed and delivered in
accordance with the provisions of this Agreement will be the Borrower's
valid obligations, legally binding upon it in accordance with their terms,
and entitled to the benefits of this Agreement in accordance with the terms
thereof, except as enforcement thereof may be limited by bankruptcy,
insolvency, or other laws affecting the enforcement of creditors' rights.
12. LENDER'S REPRESENTATIONS AND WARRANTIES. See Rider A, paragraph 9
attached hereto and incorporated herein.
13. FIDUCIARY. See Rider A, paragraph 10 attached hereto and incorporated
herein.
14. CONDITIONS. Lender's obligation to make the loan to Borrower at Closing
is subject to the fulfillment to its satisfaction, before or at Closing of the
following conditions:
a. REPRESENTATIONS AND WARRANTIES CORRECT. Borrower's representations
and warranties contained herein or otherwise made in writing by or on
behalf of the Borrower in connection with the transactions contemplated
hereby shall have been correct when made and shall be correct at and as of
Closing, except as affected by the transactions contemplated hereby.
b. RESERVATION OF COMMON STOCK. FUTO shall have duly authorized and
reserved for issuance the shares of Common Stock issuable upon the exercise
of the Warrants.
c. PERFORMANCE. Borrower shall have performed and complied with all
agreements and conditions contained herein required to be performed or
complied with by it prior to or at Closing.
d. PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be
satisfactory in form and substance to Lender and Lender shall have received
all of such documents requested by it.
15. INSPECTION. The holder of the New Note and Second Amendment will be
permitted by Borrower to visit and inspect, at Borrower's expense, any of
Borrower's properties, including its books (and to make extracts or copies
therefrom), and to discuss its affairs, finances, and accounts with its
officers, all at such reasonable times and as often as is reasonably requested,
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provided, however, that all material furnished pursuant hereto to the extent not
otherwise made public by Borrower is furnished to Lender solely for the purposes
hereof and with the understanding that Lender will not disclose such information
to any third party, except for regulatory authorities and other proper
disclosures.
16. CLOSING. Closing of the shall take place at the offices of the Lender's
attorneys, ALPERN, MYERS, STUART, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, A Legal Services LLC,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ "▇", ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 2:00 p.m. on
Tuesday, January 16, 2001.
17. AUTHORIZATION. The board of directors of Borrower shall authorize this
loan to be made.
18. FACSIMILES. Facsimile signatures may be considered as originals for the
purpose of Closing, but shall be replaced by original signatures forthwith after
Closing.
19. This Agreement shall be binding upon and inure to the benefit of heirs,
successors, trustees, and assigns of the parties. It shall be governed by and
construed in accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first written above.
LENDER:
▇▇▇▇▇ Fargo Bank West, N.A., Trustee of the
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Rollover ▇▇▇ (formerly
Norwest Bank Colorado, National Association,
Trustee of the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Rollover ▇▇▇)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- --------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
BORROWER:
OPEC Corp., a Colorado corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Secretary
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FutureOne, Inc., a Nevada corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
ATTEST:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Assistant Secretary
GUARANTOR:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
STATE OF COLORADO )
) ss.
County of El Paso )
Subscribed and sworn to before me this day of January, 2001, by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, as Trustee for ▇▇▇▇▇ Fargo Bank West, N.A., Trustee of the ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Rollover ▇▇▇. (formerly, Norwest Bank Colorado, National Association,
Trustee of the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Rollover ▇▇▇).
WITNESS my hand and official seal.
My commission expires:
------------------------
(SEAL)
Notary Public
STATE OF COLORADO )
) ss.
County of El Paso )
Subscribed and sworn to before me this ____ day of January, 2001, by ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇.
WITNESS my hand and official seal.
My commission expires:
------------------------
(SEAL)
Notary Public
STATE OF COLORADO )
) ss.
County of El Paso )
Subscribed and sworn to before me this day of January, 2001, by ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇.
WITNESS my hand and official seal.
My commission expires:
------------------------
(SEAL)
Notary Public
STATE OF COLORADO )
) ss.
County of El Paso )
Subscribed and sworn to before me this day of January, 2001, by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, as President and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as Secretary of OPEC Corp., a
Colorado corporation.
WITNESS my hand and official seal.
My commission expires:
------------------------
(SEAL)
Notary Public
STATE OF COLORADO )
) ss.
County of El Paso )
Subscribed and sworn to before me this day of January, 2001, by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, as President and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as Assistant Secretary of FutureOne,
Inc., a Nevada corporation.
WITNESS my hand and official seal.
My commission expires:
------------------------
(SEAL)
Notary Public
STATE OF COLORADO )
) ss.
County of El Paso )
Subscribed and sworn to before me this day of January, 2001, by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, as Guarantor.
WITNESS my hand and official seal.
My commission expires:
------------------------
(SEAL)
Notary Public