NEIGHBORCOMM(TM) SERVICE AGREEMENT
This NeighborComm(TM) Service Agreement ("Agreement") is made this 12th day May,
2000 between FutureOne Inc., a Nevada corporation (hereinafter referred to as
"FutureOne"), Morley Family Investments, LLLP, a Colorado limited liability
limited partnership and ROCOLO VI, a Colorado limited liability company and Ray
O'Sullivan - Ridgeview Devp., LLC, or his assigns (hereinafter collectively
referred to as the "System Provider").
RECITALS
WHEREAS, FutureOne is a full service communications company which provides
communications and infrastructure design and installation services.
WHEREAS, System Provider owns the rights to install communication and cable
services for that certain real estate development, in Colorado Springs,
Colorado, described as Ridgeview at Stetson Hills, consisting of approximately
850 acres of residential single family homes, 115 acres of commercial and 50
acres of multi-family housing. (the "Property"). The parties understand that the
owners of Ridgeview at Stetson Hills have the right to modify the land uses
described above as they may desire.
WHEREAS, FutureOne is creating a unique product (the "NeighborComm System") to
provide bundled communications services, including voice video and data, a
community Intranet and a virtual community portal. The NeighborComm intranet and
community portal will be designed around the Ridgeview development to provide a
single point for residents, local businesses and government agencies to
communicate in a local environment over the Internet and intranet.
I. COMMITMENTS OF FUTUREONE
FutureOne shall provide voice, video and data communications to homes within
various subdivisions within the Property. These bundled services will be based
on regular local dial tone telephone service, long distance telephone service
(including selected voice over IP internet long distance), video on demand and
high speed Internet connections. The parties acknowledge that these services are
intended to be phased into the development as set forth on Exhibit C attached
hereto, subject to the following contingency.
FutureOne also desires to provide cable TV services, but is currently unable to
provide such services. Accordingly, FutureOne is currently exploring obtaining a
franchise agreement from the city of Colorado Springs, possible resale of other
providers services and the possible use of wireless and satellite providers. In
the event that FutureOne becomes able to provide cable TV services, the parties
hereby agree to amend this Agreement to reflect this change and to modify the
cost and timing schedules accordingly.
In addition, FutureOne will supply an intranet within the community that allows
neighbors to communicate directly with other neighbors and FutureOne intends to
expand this Intranet network to include local businesses, schools and government
agencies. FutureOne will also supply its proprietary software to allow the
intranet to provide local bulletin boards, want ads, homeowner association
management, security and other local features.
FutureOne will provide System Provider with sales and advertising material and
provide training sessions for residents and home builders on the Property.
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II. COMMITMENTS OF SYSTEM PROVIDER
System Provider shall be responsible to install the cable and/or conduit from
the backbone to the structures and/or any portion of the backbone as agreed
between System Provider and FutureOne, according to the schedule set forth on
Exhibit A attached hereto. Services to complete the infrastructure installation
required of System Provider will be provided to System Provider by OPEC CORP.,
("OPEC"), a wholly owned subsidiary of FutureOne that is familiar with the
specifications required for this infrastructure. All such services shall be
charged at prices reasonable and customary in the area to be determined by
System Provider and OPEC at the time of installation and shall include a
discount of 10% from prices normally charged to developers for similar services.
System Provider will pay for all such infrastructure installation on a net 30
basis. Notwithstanding anything contained in this paragraph, System Provider
shall retain the exclusive right to obtain competitive bids for all work to be
performed hereunder for the purpose of determining prices that are "reasonable
and customary" and to use such bids as a basis for negotiating prices for any
work to be performed by OPEC.
System Provider hereby grants FutureOne the exclusive right to provide the
NeighborComm System described in this Agreement to residents of the Property and
System Provider agrees not to enter into any additional agreements with other
similar service providers for the services to be supplied by FutureOne under
this Agreement, as long as this Agreement is in effect. System Provider shall
assist FutureOne in encouraging builders, commercial enterprises and homeowners
on the Property to subscribe to the NeighborComm System and shall exclusively
recommend the NeighborComm System to homebuilders and its other customers. The
parties agree to meet and confer in good faith at appropriate times after the
Effective Date herein with the goal of reaching mutual agreement on the
particular methods, processes and forms of actual assistance in encouraging
builders, commercial enterprises and homeowners on the Property to subscribe to
the NeighborComm System.
System Provider acknowledges that FutureOne provides the NeighborComm System to
other entities and individuals, including other builders, developers and
property managers and some services may be provided to others through a portion
of the backbone infrastructure installed in the Property.
III. MAINTENANCE OF FACILITIES
FutureOne shall be responsible for performing maintenance and repair services
for all equipment necessary to complete the network and infrastructure for the
NeighborComm System (the "NeighborComm System Equipment"). FutureOne shall make
all repairs, replacements and upgrades to the NeighborComm System Equipment that
are necessary to keep them in good working order and in a condition suitable for
providing the NeighborComm System as contemplated by this Agreement. FutureOne
shall comply with all applicable government regulations and laws regarding the
services provided under this agreement.
FutureOne shall be responsible, at its cost and expense, for performing or
causing to be performed maintenance and repair services for all NeighborComm
System Equipment.
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IV. TRANSFERABILITY
This Agreement shall run with the Property and shall be binding upon and inure
to the benefit of System Provider and any person who acquires right, title or
interest in or to all or any portion of the Property, and FutureOne and its
permitted successors and assigns.
Any benefits or rights conferred by this Agreement to System Provider are
non-transferable without the express written consent and approval of FutureOne,
except that System Provider may transfer this Agreement to any entity that is
owned, controlled or managed by the current owners of System Provider. Any
benefits or rights conferred by this Agreement to FutureOne are non-transferable
without the express written consent and approval of System Provider, except that
FutureOne may transfer this Agreement to any entity that is owned, controlled or
managed by FutureOne. The approval of the transfer of this Agreement by either
party to a third party shall not be unreasonably withheld. The terms of this
Agreement shall also be exclusive and apart from any other contract entered into
between FutureOne and System Provider.
Notwithstanding anything to the contrary in this Section IV, FutureOne may,
without System Provider's approval and in FutureOne's sole discretion, from time
to time, (i) grant to any person or entity a security interest in the FutureOne
NeighborComm Facilities (as defined below), and (ii) assign or pledge
FutureOne's interest in this Agreement to any person or entity to finance
FutureOne's obligations under this Agreement or the operation of the business of
FutureOne or its subsidiaries.
V. NON-DISCLOSURE, NON-COMPETE & NON-SOLICITATION PROVISIONS
System Provider acknowledges that the NeighborComm System including the,
community intranet and bundled communications services contemplated under this
Agreement are concepts that are not exclusive to FutureOne but all specific
information regarding services, procedures, programs, processes, and equipment,
used in providing FutureOne's Neighborcomm System are valuable to FutureOne and
agrees not to disclose, discuss, divulge, disseminate, make available or
distribute any specific information regarding FutureOne's NeighborComm System to
anyone that is not a party to this Agreement, without the express written
permission of FutureOne. System Provider further agrees not to copy, use or
imitate the specific services, procedures, programs, processes, and equipment
used in the NeighborComm System developed and designed by FutureOne in other
projects developed by System Provider or the current owners of System Provider
without the prior written approval of FutureOne.
System Provider and the owners of System Provider agree not to compete with
FutureOne in any way by providing similar services or technology to others or to
make such plans or technology available to any third party without the express
written permission of FutureOne. System Provider and the owners of System
Provider also own other developments, and each of these developments is separate
from any other development. Given the nature of the technology and the possible
proliferation of such technology in the future, the restrictions of his section
are not intended to prevent the current owners of System Provider to discuss and
negotiate with any competitive service provider for services for other than the
Property.
Each of the parties to this Agreement hereto shall not directly or indirectly
hire, solicit for hire, or otherwise contract with any employee(s) of any other
party to this Agreement in any capacity, including subcontractor status, during
the term of this Agreement or for a period of twenty four (24) months thereafter
without the express written approval of the affected party. Should this section
be breached, in addition to all other remedies available under law, a party who
violates this Section agrees to pay to the aggrieved party an amount equal to
the greater of $10,000 or 40% of the total compensation for a standard work year
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(2,080 hours), including any increases agreed to by the parties within six
months of employment for each such employee hired by the violating party or
related employing entity.
An "employee" for purposes of this Section is hereby defined as any employee of
a party, including the employees of any affiliate of a party and any person
employed as a subcontractor of a party or any affiliate of a party that is
providing services to System Provider or FutureOne and its affiliates under this
Agreement.
VI. DESIGN, INSTALLATION AND OWNERSHIP OF THE SYSTEM AND INFRASTRUCTURE
FutureOne shall design and engineer the complete network and infrastructure and
determine the type and brand name of the equipment and the type and brand name
of the cabling to be used to install the NeighborComm System in the Property
provided that the network infrastructure and equipment selected and used by
FutureOne in installing the NeighborComm System shall be compatible with US WEST
communication systems. FutureOne shall supply all equipment necessary to
complete the backbone of the network, including computer switching hardware,
connection boxes and set top boxes, which may be leased or sold to consumers,
and FutureOne shall own all such equipment and infrastructure. FutureOne shall
supply all software and necessary support for the NeighborComm Internet and
intranet service.
System Provider shall within ten (10) days of the signing of this Agreement
provide to FutureOne, $100,000 which shall be used to pay for certain immediate
costs of required infrastructure as indicated on Exhibit A. This infrastructure
shall be purchased as part of the first purchase as indicated on Exhibit B.
System Provider shall only be required to pay for those infrastructure costs and
expenses marked on Exhibit A with an "X". System Provider, at System Provider's
sole option, may elect to pay for additional infrastructure costs not marked
with an "X" on Exhibit A. FutureOne shall purchase from System Provider all
required and optional infrastructure installed and paid for by System Provider
as set forth in this Agreement.
System Provider shall be responsible to install the cable and/or conduit from
the backbone to the structures and/or any portion of the backbone as agreed
between System Provider and FutureOne, according to the schedule set forth on
Exhibit A attached hereto. The parties acknowledge that the specific items and
amounts indicated on Exhibit A are estimates based on the current network design
and that since this is a long term project there may be changes to the items
indicated on Exhibit A, based on changes in technology, network capabilities and
requirements and increases or decreases in item costs. After installation of the
connections from the backbone to the structures, FutureOne shall have the
exclusive right to purchase the infrastructure installed and paid for by System
Provider upon the terms specified below and according to the schedule set forth
on Exhibit B attached hereto.
VII. COMMON STOCK OF FUTUREONE
Upon FutureOne's receipt and acceptance of the Investor Questionnaire attached
hereto as Exhibit D and pursuant to the schedule set forth on Exhibit B attached
hereto FutureOne shall issue shares (the "Shares") of its common stock, par
value $0.001 per share ("Common Stock") to System Provider as detailed in the
First Amendment attached hereto and incorporated herein.
Any issuance of Common Stock shall be made in aggregate amounts equal to System
Provider's actual cost of the infrastructure installed and paid for by System
Provider on the Property and shall be made upon submission by System Provider to
FutureOne of paid invoices reflecting the actual amounts expended for the
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infrastructure. All Such issuances shall be made in tranches (the
"Infrastructure Repayment Tranches") as set forth on the schedule set forth on
Exhibit B attached hereto. The value of the Common Stock for purposes of the
initial issuance and each Infrastructure Repayment Tranch shall be determined by
the average of the closing prices of Common Stock as reported in the
consolidated reporting system (for exchange traded securities and last sale
reported for over-the-counter securities) for the 21 trading days immediately
preceding the established date for issuance of such Infrastructure Repayment
Tranch (the "Stock Valuation Price").
In addition, System Provider will be issued warrants to purchase Common Stock of
FutureOne equal to fifteen percent (15%) of the number of shares of Common Stock
issued in each Infrastructure Repayment Tranch. Such warrants shall vest
immediately upon issuance and shall be exercisable for seven (7) years at a
price equal to the Stock Valuation Price.
All right, title and interest in the infrastructure, computers, equipment and
software, which are part of the NeighborComm System, shall remain with FutureOne
or its affiliates or subsidiaries ("FutureOne NeighborComm Facilities").
VIII. REPRESENTATIONS AND WARRANTIES
(a) Each party to this Agreement hereby represents and warrants to the
other party hereto as follows:
(i) In the case of FutureOne, it is a duly organized corporation
created under the laws of the State of Nevada, and has full power, right and
authority to enter into this Agreement.
(ii) System Provider includes a duly organized limited liability
limited partnership and a limited liability company respectively, created under
the laws of the State of Colorado. System Provider has the requisite power and
all required permits and plat approvals to carry on the present and proposed
activities, and has full power, right and authority to enter into this Agreement
and to perform each and all of their obligations provided for herein.
(iii) System Provider has taken or caused to be taken all requisite
action under its governing instruments to authorize the execution and delivery
of, and the performance of its obligations under, this Agreement.
(iv) Each person who, in its name, executes this Agreement has been
duly authorized to execute this Agreement on its behalf.
(v) Neither its execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, is at the time executed in
conflict with its governing instruments or any other agreements or instruments
to which it is a party or by which it is bound.
(vi) There is no litigation served on it which challenges its
authority to execute, deliver or perform this Agreement, and it has disclosed to
the other party any threatened litigation with respect to such matters of which
it is aware.
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(b) System Provider represents and warrants to FutureOne that there are no
exclusive rights granted to any other providers of voice, video or data services
prior to the Effective Date of this Agreement with respect to the Property.
IX. RELATIONSHIP OF THE PARTIES & RIGHTS TO REVENUE
It is expressly understood and agreed that neither party shall act as an
employee or agent of the other party, and nothing contained in this Agreement
shall be construed to create a joint venture, partnership, association or other
affiliation, or like relationship, between the parties. It is specifically
agreed that the relationship is and shall remain that of independent parties to
a contractual relationship and that System Provider shall have no right to bind
FutureOne in any manner nor shall the FutureOne have the right to bind System
Provider. In no event shall either party be liable for the debts or obligations
of the other.
System Provider agrees that FutureOne shall establish the prices for providing
NeighborComm System services, shall directly bill each customer for such amounts
and that all revenues derived by FutureOne from providing NeighborComm System
services, equipment or other services, including products or services provided
to customers through affiliates of FutureOne, are the exclusive revenue of
FutureOne and System Provider shall have no claim to any such revenues.
X. FUTUREONE NEIGHBORCOMM SYSTEM
System Provider agrees that FutureOne's NeighborComm System and its services and
products are subject to change without notice, but FutureOne shall at all times
provide basic telephone service according to the standards of all applicable
government regulations and laws regarding this service, which are applicable to
FutureOne and further, FutureOne shall comply with all applicable government
regulations and laws regarding the services provided under its NeighborComm
System.
XI. COOPERATION TO PROMOTE THE PROJECT AND NEIGHBORCOMM
System Provider and FutureOne agree that the NeighborComm System and the
services contemplated under this Agreement represent a unique advancement in
communications services and that it is in the best interest of both parties to
promote the availability of the NeighborComm System and the related services to
various forms of news and advertising media, including newspapers, magazines,
radio and television. Therefor, the parties hereby agree to cooperate in the
mutual promotion of the NeighborComm Community concept and its related services
and to jointly make available press releases, access to the Property and
equipment and to release appropriate information to authorized news agencies. To
the extent System Provider uses web sites, advertising and other promotional
material to market its development, System Provider hereby agrees to use the
FutureOne NeighborComm trademarked name and logo in any advertising used by
System Provider to promote Ridgeview at Stetson Hills and System Provider hereby
agrees to allow FutureOne to use its name, Ridgeview at Stetson Hills, and any
of its logos in promoting FutureOne's NeighborComm System. Nothing contained in
this Agreement will be construed as FutureOne granting any rights to System
Provider by license or otherwise, to any of FutureOne's intellectual property.
System Provider's cooperation in promoting the NeighborComm System and related
services shall not impose any financial obligation on System Provider to promote
NeighborComm or any related services.
System Provider further agrees to assist FutureOne in promoting web site design,
e-commerce and e-business services to builders and other commercial entities
that locate on the Property and agrees to exclusively recommend FutureOne's
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services to these entities. The parties agree to meet and confer in good faith
at appropriate times after the Effective Date herein with the goal of reaching
mutual agreement on the particular methods, processes and forms of actual
assistance to assist FutureOne in the promoting as described above.
XII. INDEMNIFICATION & HOLD HARMLESS AGREEMENTS
(i) FutureOne shall indemnify, defend, protect and hold harmless
System Provider and its officers, directors, equity owners, employees, agents,
representatives and affiliates from and against all demands, claims, losses,
liabilities, injuries, damages, settlements, judgments, penalties, fines, suits,
causes of action, costs and expenses (including reasonable fees and
disbursements of attorneys and other professionals and court costs) suffered or
incurred by any one or more of them to the extent arising out of or relating to
design, installation, upgrade, retrofit, maintenance, renovation, repair or
operation by FutureOne of the FutureOne NeighborComm Facilities, FutureOne's
marketing or offering activities or representations respecting owners and
potential owners at the Property, the activities of FutureOne or its affiliates
on or about the Property, FutureOne's breach of any of its representatives or
warranties hereunder, or infringement by FutureOne of patents, copyrights or
intellectual property rights.
(ii) System Provider shall indemnify, defend, protect and hold
harmless FutureOne and its officers, directors, equity owners, employees,
agents, representatives, parents, subsidiaries and affiliates and System
Provider's affiliates, from and against all demands, claims, losses,
liabilities, injuries, damages, settlements, judgments, penalties, fines, suits,
causes of action, costs and expenses (including reasonable fees and
disbursements of attorneys and other professionals and court costs) suffered or
incurred by any one or more of them and arising out of or relating to the
planning, design, development, subdivision, construction, maintenance, repair,
replacement, operation or management of the Property, System Provider's breach
of any of its representations or warranties hereunder, any construction and
installation by System Provider on the Property, the renting, leasing or
purchasing of System Provider residential units at the Property, the condition
of the Property, the maintenance, renovation or repair by System Provider of its
facilities or the presence, release, discharge, spilling or disposal of
hazardous materials on, in, under or about the Property by System Provider, its
agents, employees, and contractors. For purposes hereof, "hazardous materials"
means any substance, chemical, pollutant or waste that is at any time identified
as hazardous, toxic or dangerous under any applicable federal, state or local
law or regulation and specifically includes but is not limited to asbestos and
asbestos containing materials, polychlorinated biphenyl's (PCB's) and petroleum
or other fuels (including crude oil or any fraction or derivative thereof).
XIII. FUTURE RELATIONSHIP OF THE PARTIES
The Parties acknowledge that this Agreement is intended to be the basis for
FutureOne to continue to provide its NeighborComm System to other properties
that may be developed by System Provider and its owners. Therefore, if FutureOne
has met all of its obligations under this Agreement in a manner satisfactory to
System Provider, System Provider and its owners shall grant to FutureOne a right
to offer a proposal to install their NeighborComm System in other developments
to be developed by System Provider or its owners.
XIV TERMINATION
Either party may terminate this Agreement or suspend its performance hereunder
at any time, by giving written notice thereof, upon the occurrence of any of the
following events:
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(a) Any default by the other party under this Agreement. A default under this
Agreement is defined as a failure by a party to perform any of its material
obligations hereunder. A default shall not be deemed to have occurred until the
party that has allegedly failed to perform as required shall have first received
written notice setting forth the nature of the default or performance failure
and shall have failed to remedy the situation within a reasonable time
thereafter, not to exceed thirty (30) days.
(b) The cessation of business activities by the other party, or if the other
party is adjudicated as bankrupt or makes a general assignment for the benefit
of creditors under any insolvency act, or if a permanent receiver or trustee in
bankruptcy is appointed for the property of the party and such adjudication,
assignment or appointment is not vacated within sixty (60) days.
Neither the expiration nor the early termination of this Agreement shall release
either party from the obligation to pay any sum which may then be owing to the
other party or from the obligation to perform any other duty or discharge any
other liability incurred prior to the effective date of such expiration or
termination.
Upon any termination of this Agreement under this provision, each party shall be
fully released from all rights and duties hereunder, without recourse or remedy,
except for all of the provisions included in Section XI above. System Provider
at its sole option, may sell, and FutureOne shall be obligated to purchase, any
infrastructure installed or under construction, at the date of termination, on
the terms and conditions specified in this Agreement. If FutureOne is in default
of this Agreement, System Provider may consider other providers for
communications services to homes within the various subdivisions built by System
Provider.
Except for the foregoing, neither party shall, by reason of the termination of
this Agreement, be liable to the other party for any compensation or damages,
including (without limitation) compensatory damages, termination charges, loss
of profits, or any expenses, investments or commitments made in connection with
this Agreement.
XV. OTHER PROVISIONS
NOTICES. Any notice hereunder to a party shall be deemed to be properly
served in writing and personally delivered or mailed to:
In the case of System Provider:
Mark Morley
101 N. Cascade Ave, Suite 310
Colorado Springs, CO 80903
Phone 719-471-1742
Fax 719-471-4812
With a copy to: Michael C. Cook, P.C.
407 S. Tejon St., #650
Colorado Springs, CO 80903
Phone 719-632-1222
Fax 719-632-0974
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In the case of FutureOne:
FutureOne, Inc.
4250 East Camelback Road, Suite K-124
Phoenix, AZ 85018-2751
Phone 602-852-9725
Fax 602-522-8714
Attn: Vice President - NeighborComm
Or to such other address as may have been furnished in writing by such party to
the other parties to this Agreement, and shall be deemed to have been given as
of the time delivered or, if mailed, as of the time acknowledged as received if
mailed registered or certified mail, postage prepaid, it being the intention
that all notices pursuant hereto shall be effective only upon receipt.
COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which when so executed, shall constitute an original copy hereof, but
all of which together shall constitute one and the same document.
SECTION HEADINGS AND GENDER. The section headings herein have been inserted
for convenience of reference only and shall in no way modify or restrict any of
the terms or provisions hereof. The use of the masculine or any other pronoun
herein when referring to any party has been for convenience only and shall be
deemed to refer to the particular party intended regardless of the actual gender
of such party.
ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of the
parties with respect to the transactions contemplated hereby, and supersedes any
prior agreements, understandings or representations between the parties, written
or oral regarding the subject matter hereof.
EXCLUSIVE GOVERNING LAW. This Agreement shall be construed under the laws
of the State of Colorado without regard to its conflicts of law principle.
SEVERABILITY. In the event any term or provision of this Agreement is
declared to be, invalid, or illegal for any reason, this Agreement shall remain
in full force and effect and the same shall be interpreted as though such
invalid or illegal provision were not a part hereof.
ARBITRATION. The parties hereby covenant and agree that, except as
otherwise set forth in this Agreement, any suit, dispute, claim, demand,
controversy or cause of action of every kind and nature whatsoever, known or
unknown, fixed or contingent, that the parties may now have or at any time in
the future claim to have based in whole or in part, or arising from or that in
any way is related to the negotiations, execution, interpretation or enforcement
of this Agreement (collectively, the "Disputes") shall be completely and finally
settled by submission of any such Disputes to arbitration under the Rules of
Arbitration and Conciliation of the American Arbitration Association then in
effect. If the parties to the Dispute are unable to agree on a single
arbitrator, then such binding arbitration shall be conducted before a panel of
three (3) arbitrators that shall be comprised of one (1) arbitrator designated
by each party to the dispute and a third arbitrator designated by the two (2)
arbitrators selected by the parties to the Dispute. Unless the parties to the
Dispute agree otherwise, the arbitration proceedings shall take place in
Phoenix, Arizona and the arbitrator(s) shall apply the law of the State of
Colorado, USA, to all issues in dispute. The findings of the arbitrator(s) shall
be final and binding on the parties to the Dispute. Judgment on such award may
be entered in any court of appropriate jurisdiction, or applications may be made
to that court for a judicial acceptance of the award and an order of
enforcement, as the party seeking to enforce that award may elect.
Notwithstanding any applicable rules of arbitration, all arbitral awards shall
be in writing and shall set forth in particularity the findings of fact and
conclusions of law of the arbitrator or arbitrators. In all disputes, the
non-prevailing party shall pay the reasonable attorneys' fees and costs of the
prevailing party.
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AMENDMENTS AND WAIVERS. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by System Provider
and FutureOne. No waiver by any party of any default, misrepresentations, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.
ROCOLO VI LLC., FUTUREONE INC.,
a Colorado limited liability company a Nevada corporation
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ ------------------------------
Its: Its
------------------------------- -------------------------------
MORLEY FAMILY INVESTMENTS, LLLP RAY O'SULLIVAN AND/OR ASSIGNS
a Colorado limited liability company Ridgeview Devp. LLC
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ ------------------------------
Its: Title:
------------------------------- -----------------------------
ACCEPTED, ACKNOWLEDGED AND AGREED
as of the ______________ day of __________, 2000.
OPEC CORP., a Colorado corporation
By:
-------------------------------
Name:
------------------------------
Its:
-------------------------------
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Exhibit A
COST OF INFRASTRUCTURE
(ESTIMATED)
THE CURRENT ESTIMATED COST OF THE BACKBONE
INFRASTRUCTURE IS AS FOLLOWS: TO BE PAID FOR BY:
System Future
Provider One
-------- ------
PathStar switch (configured for 1,000 customers)
Installation
Marconi FiberStar (first 1,000) units
Vault 45,000 X
Equipment for vault 20,000 X
Back up power for vault
Computer equipment 15,000 X
Software
Initial cabling and cross box 20,000 X
Virtual community portal development
$100,000
VARIABLE INFRASTRUCTURE COSTS
PathStar (per 32 ports/card)
Pathstar (1 rack per 15 cards)
Marconi FiberStar (per unit)
Cable (per unit) X
Cable to home and box (per unit) X
Note: The above costs are estimated and do not include any costs that may be
necessary to deliver cable TV, video on demand or cost increases that may occur
because of inflation, new technology or changes in system design that may occur
during the build out period.
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System Provider FutureOne
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Exhibit B
SCHEDULE OF INFRASTRUCTURE PURCHASES BY FUTUREONE
FutureOne shall purchase the Infrastructure installed and paid for by System
Provider as follows:
1. The Parties agree that upon signing the Agreement, FutureOne shall
immediately purchase from System Provider $400,000 of infrastructure in
accordance with the terms specified in Section VII of the Agreement.
2. Thereafter purchases shall occur on the earlier of:
a. Six months from the date of the last purchase.
b. The completion of infrastructure to 250 structures.
c. The expenditure of $175,000 or more by System Provider.
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System Provider FutureOne
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Exhibit C
Targeted Implementation for RIDGEVIEW AT STETSON HILLS
1ST STAGE IMPLEMENTATION:
TARGET: APRIL 15, 2000
TELEPHONE SERVICE
FutureOne will immediately begin providing telephone service on a resale basis.
FutureOne has installed a toll free line (800-268-9244) for customer service,
ordering and support. For customers that already have US WEST, order will be
processed by FutureOne to switch the customer to FutureOne. New customers can
now order direct from FutureOne and each order for new service will then be
dispatched to OPEC for immediate installation. Brad Black and Jeff Barnum are
assigned to customer support.
FutureOne has developed a brochure for the homeowner that explains some of the
features and benefits of NeighborComm. These brochures will be distributed to
existing households in the community and given to builders to distribute and
place in model homes. An incentive of one month's free basic telephone service
is being offered for new customers. FutureOne will work with builders to assist
in training and selling NeighborComm services and free phone service will be
offered to builders for use in their models and construction sites.
OPEC will immediately install a cross-box for providing telephone services to
existing Ridgeview homeowners over the existing US WEST facilities and will
immediately install interduct to the next areas of home development to pull the
necessary cabling to service these homes as they are sold. OPEC will then
install wiring and telephone drop boxes to each home.
2ND STAGE IMPLEMENTATION:
TARGET: OCTOBER 1, 2000
HIGH SPEED INTERNET
FutureOne will install the needed communications equipment to support DSL
Internet service, which can be supplied over the existing cable being installed
by OPEC.
FutureOne will produce advertising materials announcing the availability of
Internet service and distribute to existing homes. These materials then will
compliment those materials currently being distributed to new homeowners
advertising telephone service.
Assistance in installing CPE (customer premise equipment) will be provided.
------------------------------ -------------------------------
System Provider FutureOne
<PAGE>
VIRTUAL COMMUNITY PORTAL
During this period FutureOne will focus on attracting sources of local content,
subscribing local businesses to the VPN (virtual private network) as customers
and securing the involvement of local schools and government.
At end of this period an initial version of the virtual community portal will be
introduced to existing and potential new customers.
At the end of this period, FutureOne will begin providing training on use of the
community portal and basic Internet navigating skills. It is anticipated that
group training sessions will be organized and offered to the community.
LONG DISTANCE AND CELLULAR PHONE SERVICE
At the end of this period, FutureOne plans on offering long distance telephone
service and cellular phone service to new and existing customers to further
enhance a complete telecommunications offering.
COMPLETED NEIGHBORCOMM IMPLEMENTATION:
TARGET: OCTOBER 1, 2000
SWITCHED BASED TELEPHONE SERVICE
During this period the Lucent PathStar switch will be installed by Lucent
Netcare and additional enhanced telephone services such as voice messaging will
be offered.
VIDEO ON DEMAND
Converting to the PathStar switch will allow FutureOne to offer video on demand.
------------------------------ -------------------------------
System Provider FutureOne
<PAGE>
Exhibit D
PERSONAL AND CONFIDENTIAL
THIS SUBSCRIPTION AGREEMENT RELATES TO THE PURCHASE OF SECURITIES OF
FUTUREONE, INC., A NEVADA CORPORATION (THE "COMPANY"), THAT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
APPLICABLE SECURITIES LAWS OF ANY STATE ("STATE LAWS"). THESE SECURITIES MAY
NOT, AT ANY TIME, BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED WITHOUT
REGISTRATION UNDER THE ACT AND STATE LAWS, OR DELIVERY TO THE COMPANY OF AN
OPINION OF LEGAL COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
THE PURCHASE OF THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK AND SHOULD
BE CONSIDERED ONLY BY PERSONS WHO CAN BEAR THE RISK OF LOSING THEIR ENTIRE
INVESTMENT.
SUBSCRIPTION AGREEMENT
FutureOne, Inc.
4250 E. Camelback Road
Suite K-192
Phoenix, AZ 85018
Ladies and Gentlemen:
The undersigned (the "Subscriber") hereby represents, warrants and agrees
with FutureOne, Inc., a Nevada corporation (the "Company"), as follows:
1. SUBSCRIPTION. SUBJECT TO THE TERMS AND CONDITIONS HEREOF, THE SUBSCRIBER
HEREBY IRREVOCABLY SUBSCRIBES FOR AND AGREES TO ACQUIRE __________ SHARES OF THE
COMPANY'S COMMON STOCK, PAR VALUE $.001 PER SHARE (THE "SHARES"), IN
CONSIDERATION FOR CERTAIN NEIGHBORCOMM SYSTEM FACILITIES TO BE ACQUIRED FROM THE
SUBSCRIBER BY THE COMPANY PURSUANT TO A CERTAIN NEIGHBORCOMM SERVICE AGREEMENT
TO BE ENTERED INTO BY THE COMPANY AND THE SUBSCRIBER. THE SUBSCRIBER UNDERSTANDS
THAT THE SALE OF THE SHARES IS BEING MADE WITHOUT REGISTRATION UNDER THE ACT OR
ANY STATE LAW AND IS BEING MADE TO "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501 OF REGULATION D UNDER THE ACT) AND OTHER PERSONS DEEMED BY THE COMPANY TO BE
SUITABLE PURCHASERS UNDER SECTION (B)(2)(II) OF RULE 506 OF REGULATION D UNDER
THE ACT. THE SUBSCRIBER ACKNOWLEDGES THAT THE SHARES WILL BE SUBJECT TO
RESTRICTIONS ON TRANSFER PURSUANT TO APPLICABLE LAW AND THE TERMS SET FORTH IN
THIS SUBSCRIPTION AGREEMENT (THE "SUBSCRIPTION AGREEMENT").
15
<PAGE>
2. ACCEPTANCE OF SUBSCRIPTION AND ISSUANCE OF SHARES. IT IS UNDERSTOOD AND
AGREED THAT, UPON EXECUTION AND DELIVERY BY THE COMPANY OF THIS SUBSCRIPTION
AGREEMENT, THE COMPANY HAS, IN RELIANCE UPON THE REPRESENTATIONS AND WARRANTIES
OF THE SUBSCRIBER AND AGAINST PAYMENT FOR THE SHARES, ACCEPTED THIS
SUBSCRIPTION. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THERE
SHALL BE NO OBLIGATION TO ISSUE ANY SHARES IF SUCH ISSUANCE WOULD CONSTITUTE A
VIOLATION OF THE ACT OR STATE LAWS.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SUBSCRIBER. THE SUBSCRIBER
HEREBY REPRESENTS, WARRANTS AND COVENANTS TO THE COMPANY AND EACH OFFICER,
DIRECTOR, AND AGENT OF THE COMPANY:
(a) That the Subscriber is authorized to acquire the Shares and otherwise
to comply with its obligations required under this Agreement; the
person signing this Agreement on behalf of an entity is duly
authorized by such entity to do so; this Agreement is the valid and
binding agreement of the Subscriber and enforceable against the
Subscriber in accordance with its terms;
(b) That the Subscriber is organized and qualified under the laws of the
state indicated below;
(c) That in formulating a decision to acquire the Shares, the Subscriber
has been given the opportunity to ask questions, and to obtain any
information necessary to permit the Subscriber to verify the accuracy
of the information and has been furnished all such information so
requested; the Subscriber has not relied or acted on the basis of any
representations or other information purported to be given on behalf
of the Company;
(d) That the Subscriber has been encouraged to rely upon the advice of the
Subscriber's legal counsel and accountants or other financial advisers
with respect to the tax and other considerations relating to the
acquisition of Shares and has been offered, during the course of
discussions concerning the acquisition of Shares, the opportunity to
ask such questions and inspect such documents concerning the Company
and its business and affairs as the Subscriber has requested so as to
understand more fully the nature of the investment and to verify the
accuracy of the information supplied;
(e) That the Subscriber understands that the acquisition of the Shares
involves various risks; investment in the Shares should be regarded as
speculative and involving a high degree of risk; the Subscriber is
fully aware of the nature of its investment in the Shares and the lack
of liquidity of its investment in the Shares;
(f) That the Subscriber (i) can bear the economic risk of the acquisition
of the Shares including the total loss of the Subscriber's investment
and (ii) has such knowledge and experience in business and financial
matters as to be capable of evaluating the merits and risks of an
investment in the Shares;
16
<PAGE>
(g) That the Shares being acquired will be acquired for the Subscriber's
own account without a view to public distribution or resale and that
the Subscriber has no contract, undertaking, agreement or arrangement
to sell or otherwise transfer or dispose of any Shares or any portion
thereof to any other person.
(h) That the Subscriber is an "accredited investor" as defined in Rule 501
of Regulation D promulgated under the Act.
Beneficial Ownership Representation - This item is only to be completed by
Subscribers that are corporations, partnerships, trusts or other entities. THE
NUMBER OF BENEFICIAL OWNERS OF INTERESTS IN THE SUBSCRIBER IS
_________________ Indicate Number of Beneficial Owners
Accredited Investor Representation - This item is only to be completed
by Subscribers that are corporations, partnerships, trusts or other
entities. THE SUBSCRIBER IS EITHER:
(1) a bank as defined in Section 3(a)(2) of the Act, or a
savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Act whether acting in its
individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange
Act of 1934; an insurance Company as defined in Section
2(13) of the Act; an investment company registered under the
Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of the Investment
Company Act of 1940; a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act
of 1958;
(2) a private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) an organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific
purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
(4) a trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a person that has
such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits
and risk of the prospective investment; or
(5) an entity in which all of the equity owners are accredited
investors.
_________________Answer "Yes" or "No"
17
<PAGE>
(i) That the Shares have not been registered under the Act or the
securities laws of any state and are subject to restrictions on
transfer as described herein;
(j) That the Subscriber will not sell, assign, pledge, give, transfer or
otherwise dispose of any Shares or any portion thereof unless such
Shares are registered under the Act and any applicable state
securities laws or, if required by the Company, the Subscriber obtains
an opinion of counsel that it is satisfactory to the Company that such
Shares may be sold, transferred or otherwise disposed in reliance on
an exemption from such registration requirements;
(k) That (i) the Company has no obligation or intention to register any
Shares for resale or transfer under the Act or any state securities
laws or to take any action (including the filing of reports or the
publication of information as required by Rule 144 under the Act) that
would make available an exemption from the registration requirements
of any such laws for the resale or transfer of the Shares and (ii) the
Subscriber therefore may be precluded from selling or otherwise
transferring or disposing of any of the Shares or any portion thereof
for an indefinite period of time or at any particular time;
(l) That no federal or state agency including the Securities and Exchange
Commission, the Arizona Corporation Commission, the Nevada Secretary
of State or the securities commission or authorities of any other
state has approved or disapproved the Shares, passed upon or endorsed
the merits of the offering, or made any finding or determination as to
the fairness of the Shares for investment; and
(m) That the Shares are being offered and sold in reliance on specific
exemptions from the registration requirements of federal and State
Laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and
understandings set forth herein in order to determine the suitability
of the Subscriber to acquire Shares.
CONDITION TO OBLIGATIONS. The subscription made hereby may be accepted or
rejected by the Company at any time after the execution hereof by the Subscriber
for any reason or no reason. Unless rejected by the Company, no Subscriber shall
have the right to demand a return of his, her or its Subscription under any
circumstances.
WAIVER, AMENDMENT; BINDING EFFECT. Neither this Agreement nor any provisions
hereof shall be modified, changed, discharged or terminated except by an
instrument in writing, signed by the party against whom any waiver, change,
discharge or termination is sought. The provisions of this Agreement shall be
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
ASSIGNABILITY. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable by the
Company or the Subscriber without the prior written consent of the other.
18
<PAGE>
APPLICABLE LAW; JURISDICTION AND VENUE. This Agreement shall be governed by and
construed in accordance with the laws of Arizona, without regard to the conflict
of laws provisions thereof. Any action or proceeding to interpret or enforce
this Subscription Agreement shall be held in Maricopa County, Arizona and the
Subscriber, by its signature below, irrevocably consents to the jurisdiction of
any court with appropriate subject matter jurisdiction located in Maricopa
County, Arizona.
COUNTERPARTS. This Agreement may be executed in any number of counterparts and
by facsimile, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
NOTICES. All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by registered or certified mail, return receipt requested, postage prepaid:
If to the Company, to it at the following address:
FutureOne, Inc.
4250 E. Camelback Road
Suite K-192
Phoenix, AZ 85018
If to the Subscriber, to it at the address set forth on the signature page
hereto; or at such other address as either party shall have specified by notice
in writing to the other.
SURVIVAL.
All representations, warranties and covenants contained in this agreement shall
survive (i) the acceptance of the subscription by the company and (iii) the
death or disability of the subscriber.
NOTIFICATION OF CHANGES. The Subscriber hereby covenants and agrees to notify
the Company upon the occurrence of any event prior to the acceptance of the
Subscription which would cause any representation, warranty, or covenant of the
Subscriber contained in this Agreement to be false or incorrect.
LEGEND.
Each certificate representing Shares sold pursuant to this Agreement will be
imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
FOREIGN SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED OR OFFERED FOR
SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH SECURITIES IS
THEN IN EFFECT, OR IN THE OPINION OF COUNSEL SUCH REGISTRATION UNDER THE
SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS IS NOT REQUIRED.
19
<PAGE>
This Subscription Agreement is executed this _____________ day of ________,
2000, at ________________ (city), _________________ (state).
BY: (CHECK ONE)
_____ CORPORATION (Please include a copy and the filing date of the articles
of incorporation, bylaws and certified corporate resolution
authorizing signature.)
_____ PARTNERSHIP (Please include a copy of the Partnership Agreement
authorizing signature.)
_____ TRUST (Please include name of trust, name of trustee, and date trust
was formed and copy of the Trust Agreement or other authorization of
signature authority.)
----------------------------------------------------------
Please print the EXACT name the
purchaser desires to appear in the records of the Company.
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
Address of Purchaser
----------------------------------------------------------
Social Security or Taxpayer Identification Number of Purchaser
EXECUTION:
Please execute this Subscription Agreement by completing the appropriate section
below.
1. If the Subscriber is a CORPORATION, complete the following:
The undersigned hereby represents, warrants and covenants that the
undersigned has been duly authorized by all requisite action on the part of
the corporation listed below (the "Corporation") to acquire the Shares,
that the Corporation has all requisite authority to acquire such Shares,
and that the Corporation was not formed for the purposes of acquiring such
Shares.
The officer signing below represents and warrants that each of the above
representations, or agreements or understandings set forth herein has been
made by the Corporation and that he or she has authority under the Articles
of Incorporation, bylaws, and resolutions of the Board of Directors of such
Corporation to execute and deliver this Subscription Agreement on behalf of
the Corporation. Such officer has enclosed a true copy of the Articles of
Incorporation, the bylaws and, as necessary, the resolutions of the Board
of Directors authorizing a purchase of the investment herein, in each case
as amended to date.
20
<PAGE>
----------------------------------------------------
Name of Corporation (Please type or print)
State of Organization:
------------------------------
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
2. If the Subscriber is a PARTNERSHIP, complete the following:
The undersigned hereby represents, warrants and covenants that the
undersigned is a general partner of the Partnership named below (the
"Partnership"), has been duly authorized by the Partnership to acquire the
Shares, the Partnership has all requisite authority to acquire such Shares,
and that the Partnership was not formed for the purposes of acquiring such
Shares.
The undersigned represents and warrants that each of the above
representations or agreements or understandings set forth herein has been
made by the Partnership and he or she is authorized by such Partnership to
execute and deliver this Subscription Agreement. Such General Partner has
enclosed a true copy of the Partnership Agreement of said Partnership, as
amended to date, together with a current and complete list of all Partners
thereof.
Name of Partnership (Please type or print)
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
3. If the Subscriber is a TRUST, complete the following:
The undersigned, hereby represents, warrants and covenants that he or she
is duly authorized by the terms of the trust instrument ("Trust
Instrument") governing the trust ("Trust") set forth below to acquire the
Shares and that the undersigned, as trustee, has all requisite authority to
acquire such Shares for the Trust.
The undersigned, as trustee, executing this Subscription Agreement on
behalf of the Trust represents and warrants that each of the above
representations or agreements or understandings set forth herein has been
made by the Trust and he or she is authorized by such Trust to execute and
deliver this Subscription Agreement. Such trustee encloses a true copy of
the Trust Instrument of said Trust, as amended to date.
21
<PAGE>
----------------------------------------------------
Name of Trust (Please type or print)
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
ACCEPTED by FutureOne, Inc. this _______ day of ___________, 2000.
FUTUREONE, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
22
<PAGE>
FIRST AMENDMENT TO NEIGHBORCOMM(TM) SERVICE AGREEMENT
This First Amendment to NeighborComm Service Agreement ("First Amendment") is
entered into this 12th day of May, 2000 ("Effective Date") by and between
FutureOne Inc., a Nevada corporation ("FutureOne") and Morley Family
Investments, LLLP, a Colorado limited liability limited partnership, ROCOLO VI,
a Colorado limited liability company and Ridgeview Devp., LLC, an individual, or
his assigns (hereinafter collectively referred to as "System Provider").
Whereas System Provider is an original customer of FutureOne and is willing to
enter into this Agreement with FutureOne and to commit to installation of
infrastructure on the Property, FutureOne and System Provider.
Therefore, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree to amend the
NeighborComm Service Agreement ("Agreement") as follows:
1. Section VII (Common Stock of FutureOne) of the Agreement is amended and
modified as follows:
Upon FutureOne's receipt and acceptance of the Investor Questionnaire attached
to the Agreement as Exhibit D and pursuant to the schedule set forth on Exhibit
B attached to the Agreement:
FutureOne shall issue shares of its common stock, par value $0.001 per share to
System Provider in an initial aggregate amount equal to $400,000, which sum
shall represent the anticipated cost of infrastructure installed and to be
installed and paid for by System Provider during the first year of the
Agreement. In the event that the infrastructure installed and paid for by System
Provider is less than $400,000 during the first year of this Agreement, System
Provider shall at the end of such one year period, escrow an amount equal to the
difference between $400,000 and the actual amount of the infrastructure
installed and paid for by System Provider during the first year of this
Agreement (including the cost of any infrastructure installed and paid for by
System Provider prior to this Agreement). Any such amounts escrowed shall be
used exclusively for payment of the infrastructure to be installed pursuant to
the schedule set forth on Exhibit B attached hereto. All Shares issued under the
initial $400,000 issue, except those shares that equal the value of the
infrastructure already installed as of the date of the Agreement, shall be held
by FutureOne, with full power to cancel a pro-rata amount of such shares if
System Provider fails to pay for the required amount of infrastructure or to
escrow sufficient funds to complete the installation of $400,000 of
infrastructure and the Shares shall be delivered pro-rata to System Provider
only upon the actual transfer of infrastructure or escrow funds to FutureOne
having a total value of up to $400,000. FutureOne shall issue to System Provider
additional Shares of its Common Stock in consideration for infrastructure
installed and paid for by System Provider in excess of the $400,000 first year
commitment.
Any additional shares to be issued by FutureOne to System Provider upon
expenditures of $100,000 or greater shall be determined as follows:
The value of the Common Stock shall be determined by the average of the closing
prices of Common Stock as reported in the consolidated reporting system (for
exchange traded securities and last sale reported for over-the-counter
securities) for the 21 trading days immediately preceding the established date
for issuance of such Infrastructure Repayment Tranches as specified in Section
VII of the Agreement.
<PAGE>
2. Section XIV (Termination) of the Agreement is amended and modified as
follows:
Notwithstanding anything contained in the Agreement to the contrary, Service
Provider shall have the right, at its option, to terminate this Agreement if
FutureOne has not raised $3,000,000 in equity, debt or other financing within 90
calendar days after the Effective Date of the Agreement. During such 90day
period after the Effective Date, Service Provider shall not be required to make
any expenditures for infrastructure costs as required in the Agreement. In the
event that Service Provider elects to terminate this Agreement under this
Section herein (i) FutureOne shall cancel a pro-rata amount of the initial
Shares issued to Service Provider in excess of the actual cost of infrastructure
installed and paid for by Service Provider prior to the Effective Date and (ii)
except for the indemnification and hold harmless provisions as set forth in
Section XII and the non-disclosure/confidentiality provisions set forth in
Section V of the Agreement, each party shall be relieved of any further
liability or obligation to the other under the Agreement.
FUTUREONE, INC. MORLEY FAMILY INVESTMENTS, LLLP
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- -------------------------------
RIDGEVIEW DEVP., LLC
ROCOLO VI, LLC RAY O'SULLIVAN OR HIS ASSIGNS
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
<PAGE>
LETTER OF UNDERSTANDING
April 28, 2000
Mssrs. Mark and Jim Morley
101 N. Cascade Ave.
Suite 310
Colorado Springs, CO 80903
Dear Mark & Jim:
This letter will confirm our understanding relative to providing ROCOLO IV, LLC,
Ridgeview Devp., LLC, and Morley Family Investments, LLLP (collectively
"ROCOLO/MFI") with incentive compensation to assist FutureOne in entering into a
contract for the installation of a NeighborComm(TM) system and the promotion of
NeighborComm to builders and residents in the Ridgeview development at Stetson
Hills in Colorado Springs, Colorado.
1) Upon ("System Provider") signing the NeighborComm Service Agreement
("Contract") with FutureOne, Inc. ("FutureOne"):
a. FutureOne will immediately issue ROCOLO/MFI 100,000 shares of
FutureOne, restricted common stock at $1/share. The stock will be
subject to piggyback registration rights, subject to underwriter
discretion.
b. ROCOLO/MFI will hold such stock to be issued above so that in the
event that the NeighborComm Service agreement is canceled by the
Service Provider, under the Addendum to the Agreement that provides
for a possible termination of the Agreement within the next 90 days,
that ROCOLO/MFI shall return such shares to FutureOne and if such
shares are not returned to FutureOne hereby grants FutureOne the
authority to cancel such shares on the records of the corporation.
2) Upon FutureOne completing purchases of infrastructure during the initial
twelve (12) month period of the Contract, as specified under the Contract,
FutureOne will pay ROCOLO/MFI an additional bonus in warrants. The warrant
will be a cashless exercise warrant and extend for a period of seven years.
The warrant will contain piggyback registration rights, subject to
underwriter discretion. based on the following:
a. A warrant to purchase shares equal to 15% of the number of shares
issued to purchase infrastructure during the first twelve (12) months
of the Contract.
<PAGE>
Mssrs. Mark and Jim Morley
Page -2-
Example: During the first twelve (12) months of the Contract,
FutureOne purchases $400,000 of infrastructure at $2/share and issues
200,000 shares to complete the purchase. ROCOLO/MFI would be issued a
warrant to purchase 30,000 shares.
b. A warrant to purchase additional shares of FutureOne stock, based on
any increased value of FutureOne stock, used to make any
infrastructure purchase during the first twelve (12) months of the
Contract, using a base price of FutureOne stock equal to $1.65/share.
Example: The Market Price (as paid for infrastructure under the model
contract) minus $1, divided by the Market Price divided into the
number of shares needed to purchase the infrastructure at $1.65/share,
less the number of shares actually used to purchase the infrastructure
under the model.
Average market price is $5 and FutureOne purchases an additional
$200,000 of infrastructure.
FutureOne would pay 40,000 shares to purchase the infrastructure under
the Contract.
If FutureOne had purchased infrastructure for $1.65/share they would
have paid 121,212 shares with a value of $200,000, so FutureOne would
now save 81,212 shares with a current value of $406,060.
Therefor the ROCOLO/MFI bonus warrants, paid under this provision,
would be for 81,212 shares/ ($5-$1)/$5 = 101,515 warrants at $1
Therefor when ROCOLO/MFI exercises their warrants, they would pay
$101,515 and sell for $507,575 thereby netting an additional $406,060
and since these would be cashless exercise warrants, they could pay
nothing and simply receive 81,212 shares free and clear.
If the foregoing correctly sets forth our agreement, with respect to the matters
contained herein please indicate by signing three (3) of this Agreement and
returning one of such signed copies to the undersigned, whereupon this Agreement
shall constitute a binding agreement between FutureOne and ROCOLO/MFI with
respect to the matters set forth herein.
<PAGE>
Mssrs. Mark and Jim Morley
Page -3-
Very truly yours,
Earl J. Cook
President/CEO
FutureOne, Inc.
ROCOLO VI LLC., FUTUREONE INC.,
a Colorado limited liability company a Nevada corporation
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- -------------------------------
MORLEY FAMILY INVESTMENTS, LLLP RIDGEVIEW DEVP., LLC
a Colorado limited liability company RAY O'SULLIVAN AND/OR ASSIGNS
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- -------------------------------
<PAGE>
LETTER OF UNDERSTANDING
May 1, 2000
Mssrs. Mark and Jim Morley
101 N. Cascade Ave.
Suite 310
Colorado Springs, CO 80903
Dear Mark & Jim:
This letter will confirm our understanding relative to providing registration
rights for One Hundred Thousand shares of FutureOne, Inc. restricted stock to be
issued to System Provider under the NeighborComm Service Agreement of even date
and as an addition to the First Amendment thereto of even date.
1. Section XIV (Termination) of the Agreement is amended and modified as
follows:
Notwithstanding anything contained in the Agreement to the contrary, Service
Provider shall have the right, at its option, to terminate this Agreement if
FutureOne has not registered up to One Hundred Thousand shares of stock held by
System Provider in an S-1 registration statement to be filed by FutureOne within
120 calendar days after the Effective Date of the Agreement. During such 120 day
period after the Effective Date, Service Provider shall not be required to make
any expenditures for infrastructure costs as required in the Agreement. In the
event that Service Provider elects to terminate this Agreement under this
Section herein (i) FutureOne shall cancel a pro-rata amount of the initial
Shares issued to Service Provider in excess of the actual cost of infrastructure
installed and paid for by Service Provider prior to the Effective Date and (ii)
except for the indemnification and hold harmless provisions as set forth in
Section XII and the non-disclosure/confidentiality provisions set forth in
Section V of the Agreement, each party shall be relieved of any further
liability or obligation to the other under the Agreement.
If the foregoing correctly sets forth our agreement, with respect to the matters
contained herein please indicate by signing four (4) of this Agreement and
returning one of such signed copies to the undersigned, whereupon this Agreement
shall constitute a binding agreement between FutureOne and Service Provider with
respect to the matters set forth herein
Very truly yours,
Earl J. Cook
President/CEO
FutureOne, Inc.
<PAGE>
FUTUREONE, INC. MORLEY FAMILY INVESTMENTS, LLLP
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ -------------------------------
Title: Title:
----------------------------- -------------------------------
RIDGEVIEW DEVP. LLC
ROCOLO VI, LLC RAY O'SULLIVAN OR HIS ASSIGNS
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
