STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of the 30th
day of June 2000 (the "Agreement Date") by and between FutureOne Inc., a Nevada
corporation ("FutureOne"), OPEC CORP, a Colorado corporation ("OPEC"),
(FutureOne and OPEC are collectively the "Seller"), Abcon, Inc., ("Abcon") an
Arizona corporation and Brian Smith ("Smith"), (Abcon and Smith are collectively
the "Buyer"). The Buyer and Seller are referred to collectively herein as the
"Parties."
WHEREAS, FutureOne owns 100% of the issued and outstanding shares of capital
stock of Abcon.
WHEREAS, this Agreement contemplates a transaction in which Smith will purchase
from FutureOne, and FutureOne will sell to Smith, all of the issued and
outstanding shares of capital stock of Abcon (the "Abcon Shares"), in return for
the compensation as defined herein. Buyer and Seller have also defined various
assets and equipment that will be transferred to Buyer by Seller as specified on
Exhibit A and debts and liabilities of Seller that will be assumed by Buyer as
specified on Exhibit B.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:
1. EFFECTIVE DATE OF TRANSFER. The Parties agree that Buyer has taken effective
control and has operated the business of Abcon since February 21, 2000 (the
"Effective Date") under a Letter of Intent of the same date.
2. FORM OF THE TRANSACTION. Subject to the terms and conditions of this
Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell to
Buyer, all of the Abcon Shares for the consideration specified in Section 3
below.
3. PURCHASE PRICE. The purchase price for the Abcon Shares ("Purchase Price")
shall be payable on the Closing Date as follows:
(a) Buyer has assumed certain debts of Seller as specified on Exhibit B in the
total amount of $236,567.60 and shall indemnify the Seller therefrom; and
(b) Buyer has financed certain equipment, which resulted in cash payments of
$230,053.00 to OPEC, the receipt of which is hereby acknowledged; and
(c) The Parties acknowledge Buyer has arranged lease financing for certain
equipment in the amount $229,982.17 ("Equipment Financing Amount"), but this
amount has not yet been released by the third party lender ("Lease Payments").
Buyer shall use its best efforts to ensure all Lease Payments are immediately
made directly to OPEC.
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Until such Lease Payments are made in full to Seller by Buyer to pay the
Equipment Financing Amount, Seller is granted a security interest in the
equipment covered by the leases. Such equipment is designated on Exhibit A. The
Parties agree the Equipment Financing Amount shall be included in the Promissory
Note referenced in Section 3(d) of this Agreement.
(d) Buyer shall deliver a promissory note and security agreement (the
"Promissory Note and Security Agreement") to Seller in the aggregate principal
amount of $263,329.14 in form and substance to the form of Promissory Note and
Security Agreement annexed hereto as Exhibit C.
4. CLOSING. The closing of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of the Seller at 2:00 p.m., Arizona
time, on the first business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Buyer and Seller may mutually determine (the "Closing Date"). Notwithstanding
the Closing Date, the Parties hereby acknowledge that all of the transactions
contemplated by this Agreement shall be deemed to have occurred as of the
Effective Date.
5. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF THE SELLER. Seller represents and warrants
to the Buyer that the statements contained in this Section 5(a) are correct and
complete as of the Agreement Date and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the Agreement Date throughout this Section 5(a)) with respect to
itself.
i) ORGANIZATION OF SELLER. FutureOne is duly organized, validly existing,
and in good standing under the laws of the State of Nevada. OPEC is duly
organized, validly existing and in good standing under the laws of the state of
Colorado. Both FutureOne and OPEC are qualified to do business in Arizona. Abcon
is also qualified to do business in Arizona
ii) DUE AUTHORIZATION. The Seller has full power and authority (including
full corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes a valid and
legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions. The Seller need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
iii) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller is subject or, if the Seller
is a corporation, any provision of its charter or bylaws.
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iv) ABCON SHARES. FutureOne holds of record and owns beneficially the Abcon
Shares, free and clear of any restrictions on transfer (other than restrictions
under the Securities Act of 1933, as amended (the "Securities Act"), and state
securities laws), taxes, security interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands FutureOne is not a party
to any option, warrant, purchase right, or other contract or commitment that
could require FutureOne to sell, transfer, or otherwise dispose of any capital
stock of Abcon (other than this Agreement).
v) DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. Except as expressly
set forth in this Section 5, the Seller makes no representation or warranty,
express or implied, at law or in equity, in respect of Abcon or any of its
assets, liabilities or operations, including, without limitation, with respect
to merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed.
(b) REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to Seller that the statements contained in this Section 5(b) are
correct and complete as of the Agreement Date and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the Agreement Date throughout this Section 5(b)).
i) AUTHORIZATION OF TRANSACTION. Smith and Abcon each have full power and
authority to execute and deliver this Agreement and to perform their respective
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of the Buyer, enforceable in accordance with its terms and
conditions. The Buyer need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.
ii) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(A) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or (B) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which it is
bound or to which any of his assets is subject.
iii) PRIOR AND CURRENT KNOWLEDGE OF BUYER. Smith has controlled and
operated the business operations of Abcon as its President and as a member of
its Board of Directors since Abcons' date of incorporation through the date
hereof and, as a result, has full knowledge of the legal, financial and business
affairs of Abcon. Smith hereby acknowledges and agrees that Smith is purchasing
the Abcon Shares on an "as-is, where-is" basis.
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v) INVESTMENT. Smith represents, warrants and confirms he (A) understands
that the Abcon Shares have not been, and will not be, registered under the
Securities Act or under any state securities laws, and are being offered and
sold in reliance upon federal and state exemptions for transactions not
involving any public offering, (B) is acquiring the Abcon Shares solely for his
or its own account for investment purposes, and not with a view to the
distribution thereof, (C) is a sophisticated investor with knowledge and
experience in business and financial matters, (D) has received certain
information concerning Abcon and has had the opportunity to obtain additional
information as desired in order to evaluate the merits and the risks inherent in
holding the Abcon Shares, (E) is able to bear the economic risk and lack of
liquidity inherent in holding the Abcon Shares, and (F) is an Accredited
Investor (as such term is defined in Rule 501 of Regulation D under the
Securities Act).
vi) EXPERTS. Buyer, in determining to enter into this Agreement and effect
the transactions contemplated hereunder, has relied solely upon the advice of
their legal counsel and accountants or other financial advisors with respect to
the tax and other consequences involved in consummating the transactions
contemplated hereunder.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES. The obligations of the
Parties to consummate the transactions contemplated by this Agreement are
subject to the satisfaction on or prior to Closing of each of the following
conditions, except as the Parties may waive in writing:
(a) REPRESENTATIONS AND WARRANTIES TRUE. Each of the representations and
warranties of the Parties contained in this Agreement shall have been true and
correct, as of the Effective Date, when made and at the time of Closing.
(b) NO LITIGATION. There shall be no action, proceeding, or threatened, pending
or actual litigation to enjoin, restrain, or prohibit the consummation of the
transactions contemplated by this Agreement or which would have the effect, if
successful, of imposing any liability upon Seller.
(c) COMPLIANCE WITH AGREEMENT. The Parties shall have complied with all
agreements and covenants applicable to them and contained in this Agreement.
(d) EMPLOYEES. Abcon and/or OPEC shall terminate all existing employment
agreements that were entered into with any employees of Abcon, while Abcon was a
wholly-owned subsidiary of FutureOne. The Parties acknowledge that the
employment agreement between OPEC and Smith, effective April 19, 1999 (the
"Smith Employment Agreement") was previously canceled, but the Parties
acknowledge that the following provisions of the Smith Employment Agreement
shall remain in full force and effect for the appropriate periods specified in
the Smith Employment Agreement:
Seller does hereby give written permission, and hereby acknowledge that Buyer
may perform drilling and boring services for previous clients of OPEC and Abcon
and the performance of such services shall not be considered a breach under
Section 8 of the Smith Employment Agreement, however the covenant not to compete
with other services currently provided to existing OPEC customers shall remain
in full force and effect.
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Notwithstanding the foregoing, the terms and conditions set forth in Sections 9
through 15 of the Smith Employment Agreement shall survive the Closing and
remain in full force and effect in accordance with Smith's Employment Agreement.
The Parties confirm and acknowledge that no further compensation, bonuses or
other benefits relating to past or future services will remain due and
outstanding to remaining Abcon employees, including, without limitation, Smith,
under any employment agreements or any other employment arrangements with Abcon
or OPEC.
(e) RESIGNATIONS. Except for Smith, all officers and directors of Abcon,
including, without limitation, Donald D. Cannella, Earl J. Cook and Bradley G.
Black, shall resign and be deemed to have resigned as directors and/or officers
of Abcon, as the case may be. (Exhibit D)
(f) TAXES. Buyer shall be responsible to file Abcon's federal and state income
returns for the period ending April 19, 1999, for amending Abcon's December 31,
1998 federal and state income tax returns to correct from Subchapter S status to
C Corp status and filing Abcon's federal and state income tax returns for all
periods subsequent to the Effective Date. Buyer shall be liable for any and all
income taxes, including any penalties and interest, due as indicated on any
returns that Buyer is required to file hereunder. Seller shall be responsible
for including the operations of Abcon in its consolidated federal and state
income tax returns for the periods beginning April 20, 1999 through the
Effective Date. Seller shall be liable for any and all income taxes, including
any penalties and interest, due as indicated on any returns that Seller is
required to file hereunder.
Buyer shall be responsible to file all payroll tax returns and pay any and all
payroll taxes due subsequent to the Effective Date. Seller shall be responsible
to file all payroll tax returns and pay any and all payroll taxes due for the
period beginning April 20, 1999 through the Effective Date.
(g) CORPORATE RECORDS. As of the Closing Date, Seller shall deliver all original
corporate records of Abcon to Buyer. Seller shall have the right to retain
copies of all corporate records of Abcon delivered to Buyer.
7. FURTHER AGREEMENTS. The Parties hereby agree to the following:
(a) ACCOUNTS. Buyer obtained new bank accounts for Abcon as of the Effective
Date and the Parties hereby acknowledge that all bank accounts of Abcon existing
as of the date of this Agreement shall be closed on or prior to Closing.
(b) INSURANCE. As of the Effective Date, the Parties hereby acknowledge Abcon
shall be removed from Seller's liability insurance policy and Section 125 Plan.
(c) CERTAIN ASSETS AND LIABILITIES. All of the assets (Exhibit A) and
liabilities (Exhibit B), shall be retained or transferred to Abcon, as the case
may be, and where applicable, shall be removed from the books of OPEC and
transferred and conveyed by Bill of Sale or by other requisite and appropriate
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documents of title transfer with free and clear title, except as to liens that
Buyer has caused to be placed against such assets, so Abcon can finance or
refinance those assets included on the books of Abcon as of the Effective Date.
Buyer hereby accepts title to the assets set forth on Exhibit A attached hereto
and agrees to assume all liabilities as indicated on Exhibit B attached hereto.
It is the intention of the Parties that no other assets or liabilities in
existence as of the Effective Date shall be transferred to Buyer, except as to
liens and debts that Buyer has caused to be placed against such assets and
agreed to assume, the income taxes specified in Section 6f, any other
liabilities of Abcon that existed prior to April 19, 1999 and the Parties agree
to settle other obligations outstanding between the parties as indicated on
Exhibit E and agree that the balance due OPEC as calculated thereon shall be
added to and is included in the amount of the Note specified in Section 3d of
this Agreement
(d) BENEFITS. As of the Effective Date, the employees of Abcon shall no longer
be eligible to participate in Seller's 401(k) Plan or any other employee benefit
plan of Seller.
(e) FINANCIAL RECORDS OF ABCON. Seller may retain all original financial records
of Abcon, including, without limitation, paid invoices, payroll records, billing
records, canceled checks and bank statements, for the period that Abcon was
owned by FutureOne and may retain copies of all financial records for periods
prior to Abcon being owned by FutureOne. Seller shall make such financial
records or copies thereof available to Buyer as requested.
(f) FUTURE COOPERATION. The Parties agree to cooperate in assisting each other
by providing information that may be required from or in the possession of the
other Party that is necessary to carry on such Party's business, including,
without limitation, fulfilling governmental agency requests, meeting audit
requirements or answering customer or vendor questions.
8. INDEMNIFICATION.
(a) Buyer hereby agrees to indemnify, hold harmless and defend Seller and
Seller's officers, directors, employees and agents for, from and against any and
all demands, claims or damages that may arise from (i) any and all acts, actions
or omissions, whether intentional or otherwise, of Buyer or Abcon that may have
occurred prior to Seller's acquisition of Abcon on April 19, 1999 or after the
Effective Date; and (ii) Buyer's breach of his representations, warranties and
covenants contained herein; and (iii) the debts and liabilities of Seller
assumed by Buyer as specified on Exhibit B.
(b) Seller hereby agrees to indemnify, hold harmless and defend Buyer and
Buyer's officers, directors, employees and agents for, from and against any and
all demands, claims or damages that may arise from (i) any and all acts, actions
or omissions, whether intentional or otherwise, of Seller that may have occurred
between April 19, 1999 and Effective Date, except any act involving Brian Smith
who was in control of the corporation and acting as President thereof; and (ii)
Seller's breach of its representations, warranties and covenants contained
herein.
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9. GENERAL.
(a) 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 Abcon:
Abcon, Inc.
21108 S. 196th St.
Queen Creek, AZ 85242
Attn: Brian Smith, President
Copies to:
Brian Smith
21108 South 196th Street
Queen Creek, Arizona 85242
In the case of FutureOne:
FutureOne, Inc.
4250 East Camelback Road, Suite K-124
Phoenix, AZ 85018-2751
Attention: President
In the case of OPEC:
OPEC CORP
5930 Paonia Ct.
Colorado Springs, CO 80915
Attn: President
or to such other address as may have been furnished in writing by such Party to
the other Party 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.
(b) INTERPRETATIONS. To the extent permitted by the context in which used; (a)
words in the singular number shall include the plural, words in the masculine
gender shall include the feminine and neuter, and vice versa; and (b) references
to "persons" or "parties" in this Agreement shall be deemed to refer to natural
persons, corporations, and all other entities. This instrument shall be
construed in accordance with the fair meaning of its language, and shall not be
construed for or against the party drafting it, solely because of such fact.
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(c) 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.
(d) SECTION HEADINGS. 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.
(e) ENTIRE AGREEMENT. This Agreement and the exhibits and schedules attached
hereto set forth the entire understanding of the Parties with respect to the
transactions contemplated hereby, and any previous agreements or understandings
between the Parties regarding the subject matter hereof are superseded by this
Agreement.
(f) NON-ASSIGNABILITY. The obligations of this Agreement are personal to each
Party, and neither the rights nor obligations under this Agreement may be
assigned or transferred by any Party in any manner whatsoever, nor are such
rights or obligations subject to involuntary alienation, assignment or transfer.
(g) GOVERNING LAW. This Agreement shall be construed in accordance with and
governed by the laws of the State of Arizona without regard to its conflicts of
law principles.
(h) 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.
(i) WAIVER OF TERMS. Any of the terms and conditions of this Agreement, to the
extent permitted by law, may be waived in writing at any time by any Party. Such
action shall be evidenced by written notice signed by Buyer or an authorized
representative of Seller taking such action.
(j) COOPERATION. Subject to the terms and conditions herein provided, each of
the Parties hereto shall use its best lawful efforts to take, or cause to be
taken, such action, to execute and deliver, or cause to be delivered, such
additional documents and instruments and to do or cause to be done all things
necessary, proper or advisable, under the provisions of this Agreement and under
applicable law to consummate and make effective the transactions contemplated by
this Agreement.
(k) DISPUTE RESOLUTION. 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 the
American Arbitration Association then in effect. The arbitration proceedings
shall take place in Phoenix, Arizona and the arbitrator(s) shall apply the law
of the State of Arizona to all issues in dispute. Judgment on such award may be
entered in any court of competent jurisdiction. The prevailing party shall be
entitled to recover its reasonable costs and attorneys fees.
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(l) ENFORCEMENT. The failure of either Party to enforce any provision of this
Agreement shall not be construed as a waiver or limitation of that Party's right
to subsequently enforce and compel strict compliance with every provision of
this Agreement.
(m) PROFESSIONAL ADVICE, FEES AND COSTS. Each Party has relied on its own
professional legal, accounting and tax advisors in determining the legal,
accounting and income tax effects of the transactions contemplated by this
Agreement on such Party. Except as otherwise provided herein, each Party hereto
shall pay its own expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated by this Agreement.
(n) AMENDMENT OF AGREEMENT. Notwithstanding anything to the contrary in this
Agreement, to the extent permitted by law, this Agreement may be amended,
supplemented or interpreted at any time by written instrument duly executed by
all Parties hereto.
(o) INCORPORATION OF EXHIBITS. The Exhibits attached hereto are incorporated
herein by reference and made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have caused this Stock Purchase Agreement
to be entered into as of the Agreement Date first above written.
SELLER: BUYER:
FUTUREONE, INC., a Nevada corporation ABCON, INC., an Arizona corporation
By: /s/ Earl J. Cook By: /s/ Brian Smith
-------------------------------- --------------------------------
Name: Earl J. Cook Name: Brian Smith
Title: President Title: President
OPEC CORP, a Colorado corporation BRIAN SMITH, an individual
By: /s/ Daniel J. Romano By: /s/ Brian Smith
-------------------------------- --------------------------------
Name: Daniel J. Romano Name: Brian Smith
Title: Vice President
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MARITAL COMMUNITY JOINDER
The undersigned, as the spouse of Smith, hereby joins in the signing of this
Stock Purchase Agreement for the purpose of (a) binding the interest if any, of
the marital community of Buyer in the Collateral and (b) consenting to the
binding of the marital community and any community asset, including Smith's
wages, to the payment of the obligations as indicated in this Agreement, in
accordance with the laws of the State of Arizona.
/s/ Sherri Smith
----------------------------------------
Sherri Smith
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EXHIBIT A
ASSETS TO BE TRANSFERRED
Lap Top Computer & CD Rom 3 $1,500
Lindco-Atlas Portable Compressor 3 9,000
1996 Int'l 2K Water Truck 32,526
1990 Ford f800, 4K Water Truck 32,527
16 x 20 Navigator w/locator, drill stem &
Mixing System 60,000
24 x 40 Navigator w/ mixing system, Butler
Trailer & Misc Equipment 100,000
Pro Vac 3 8,000
Kieffer Trailer 3 4,500
F-8000 Truck w/ F8000 Add on Box 3 7,740
Ford F-450 2 28,803
Ford F-450 2 31,076
1992 Peterbuilt Truck 30,000
Trail King Trailer 25,000
Interstate Trailers (3) 2 19,500
2000 Ford F-650 1 35,789
1983 Vacuum Tank Trailer 15,500
Ford F-350 2 31,990
Hamerhead Mole 3 3,000
Rod Box 3 3,000
Ringomatic 750 C Vac 10,000
Vermeer DT 750 Mixing System 2 19,824
Vermeer DT 750 Mixing System 2 9,823
DSI 1600 Mud Recycler 70,000
Vacmaster Spoilvac w/99 Maxey Trailer 2 18,000
1995 International Truck 1 35,000
Miscellaneous Equipment and Supplies, as
purchased from Vemeer on Note being assumed by
Buyer 3 57,162
Miscellaneous Tools 2 15,000
---------
3 $ 714,260
=========
(1) Indicates items to be paid by Spinnaker #2
(2) Indicates items to be paid by Spinnaker #3
(3) Indicates assets to be used to secure OPEC Note.
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EXHIBIT B
LIABILITIES ASSUMED
Orix Loan on 16x20 $ 63,273.05
Orix Loan on 24x40 87,645.93
Vermeer Note 85,648.62
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$236,567.60
PAYMENTS MADE THROUGH NEW FINANCING OBTAINED BY BUYER
Spinnaker #1 $ 75,053.00
CIT Corp 155,000.00
-----------
$230,053.00
Total Payments applied to machinery and equipment purchase $439,620.60
PAYMENTS TO BE MADE THROUGH NEW FINANCING OBTAINED BY BUYER
Spinnaker #2 $ 70,789.00
Spinnaker #3 159,193.17
-----------
$229,982.17
-----------
Balance due OPEC $247,639.40
The Parties agree that any amounts received by OPEC from Spinnaker #2 or #3, in
excess of the actual payoff amount of any vehicle, which have been reduced
because of payments made by Abcon on such vehicles shall be credited against the
promissory note from Abcon to OPEC.
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EXHIBIT C
PROMISSORY NOTE AND SECURITY AGREEMENT
PROMISSORY NOTE
$263,329.14 June 30, 2000
Phoenix, Arizona
FOR VALUE RECEIVED, the adequacy and sufficiency of which are hereby expressly
acknowledged, the undersigned Brian Smith and Abcon, Inc, jointly and severally,
(the "MAKERS") promises and agrees to pay to the order of OPEC CORP, a Colorado
corporation and FutureOne, Inc., a Nevada corporation ("HOLDERS"), at such place
as Holders may designate from time to time in writing, the principal amount of
TWO HUNDRED SIXTY THREE THOUSAND, THREE HUNDRED TWENTY NINE & 14/100 DOLLARS
($263,329.14) payable as follows:
SEVENTY THOUSAND SEVEN HUNDRED EIGHTY NINE & 00/100 DOLLARS ($70,789.00) with no
interest, on or before July 20, 2000.
ONE HUNDRED FIFTY NINE THOUSAND, ONE HUNDRED NINETY THREE & 17/100 DOLLARS
($159,193.17) with no interest, on or before July 31, 2000.
The balance of THIRTY THREE THOUSAND, THREE HUNDRED FORTY SIX & 97/100 DOLLARS
($33,346.97)or so much thereof as may be outstanding hereunder from time to
time, with interest to accrue on the unpaid principal balance at a rate of
FIFTEEN PERCENT (15%%) per annum, with principal and accrued interest thereon
payable monthly on the 25th of each month in the amount of FIVE THOUSAND &
00/100 Dollars ($5,000.00) until the entire unpaid principal and accrued
interest thereon is paid in full. At Maker's election, payments may be made by
bank wire transfer at Maker's expense and Holder shall furnish the requisite
information.
To secure payment and performance, this Note is secured by certain business
equipment and all accounts, including accounts receivable and contract rights of
Maker ("Collateral"), all in accordance with the Security Agreement of even date
herewith.
This Note shall evidence a portion of the Purchase Price payable pursuant to
Section 3(d) of that certain Stock Purchase Agreement between the Maker and the
Holder (as amended from time to time, the "Stock Purchase Agreement"). The Maker
shall have the right to prepay this Note in full or in part at any time without
penalty, premium or notice. All payments and prepayments shall be applied first
to any Expenses (as defined below), second to accrued and unpaid interest, and
third to principal. Principal and interest shall be payable in lawful money of
the United States of America.
Maker agrees that upon the occurrence of an Event of Default (as hereinafter
defined) hereunder, (a) the Maker will pay all costs and expenses of collection
of this Note, including reasonable attorney's fees ("Expenses"); (b) at the
option of the Holder, the unpaid principal balance of this Note along with
accrued and unpaid interest shall become due and payable immediately without
notice; and (c) Holder may utilize any available remedies, including without
limitation any remedies available against the Collateral, under Arizona law
and/or under the Uniform Commercial Code, at law or in equity, in such order
and/or combination as Holder may elect in its sole and absolute discretion. For
purposes of this Note, an "Event of Default" shall mean (a) any failure by Maker
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to pay when due any installment or principal or interest under this Note, which
failure is not cured within ten (10) days of written notice thereof by Holder to
the Maker, (b) any general assignment by Maker for the benefit of creditors, (c)
any filing of a voluntary bankruptcy petition by Maker, and (d) any filing of
any involuntary bankruptcy petition against Maker, which filing is not dismissed
within 90 days thereof.
Failure of the Holder to exercise any option hereunder shall not constitute a
waiver of the right to exercise the same in the event of any subsequent default
or breach, or in the event of continuance of any existing default or breach
after demand for performance thereof.
The Maker, sureties, guarantors and endorsers, if any, severally waive demand,
diligence, presentment for payment, protest and notice of demand, protest,
nonpayment and exercise of any option hereunder. The granting without notice of
any extension or extensions of time for payment of any sum or sums due
hereunder, or the taking or release of security shall in no way release or
discharge the liability of Maker or any surety, guarantor or endorser.
No provision of this Note is intended to or shall require or permit Holder,
directly or indirectly, to take, collect or receive in money, goods or in any
other form, any interest in excess of that permitted by applicable law. If any
amount due from or paid by Maker shall be determined by a court of competent
jurisdiction to be interest in excess of such maximum rate, Maker shall not be
obligated to pay such excess and, if paid, such excess shall be applied against
the unpaid principal balance of this Note, or if and to the extent that this
Note has been paid in full, such excess shall be remitted to Maker.
The provisions of this Note shall be binding upon and inure to the benefit of
the heirs, personal representatives, successors and assigns of the parties
hereto.
This Note shall be governed by and construed in accordance with the laws of the
State of Arizona without regard to conflicts of law principles.
IN WITNESS WHEREOF, Maker has executed this Note as of the date first stated
above.
MAKERS" (JOINTLY AND SEVERALLY)
---------------------------------------
Brian Smith
ABCON, INC.
By:
------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
14
<PAGE>
SECURITY AGREEMENT
DEBTOR:
Name: Abcon, Inc.
Address: PO Box 2198, Chandler, AZ 85244-2198
Attn: Brian Smith, President
and
Name: Brian Smith
Address: 21108 South 196th Street
Queen Creek, Arizona 85242
SECURED PARTY:
Name: OPEC CORP, a Colorado corporation
Address: 5930 Paonia Court
Colorado Springs, CO 80915
and
Name: FutureOne, Inc.
Address: 4250 East Camelback Road, Suite K124
Phoenix, AZ 85018
DATE: June 30, 2000.
Debtor, for good and sufficient consideration, the receipt of which is hereby
acknowledged, hereby grants to Secured Party a security interest in the
following property and any and all additions, accessions and substitutions
thereto or thereof (hereinafter referred to as the "Collateral"):
All of Debtor's accounts (including accounts receivable and contract
rights) whether now owned or hereafter acquired, whether now existing or
hereafter arising, together with all records and data relating to Debtor's
accounts including Debtor's rights in and to all computer software required
to utilize, create, maintain, and process such records or data on
electronic media.
All Equipment, if any, as may be noted on any attached Exhibit A to this
Security Agreement
TO SECURE PAYMENT AND PERFORMANCE UNDER THAT CERTAIN PROMISSORY NOTE OF EVEN
DATE HEREWITH, PAYABLE TO THE SECURED PARTY.
1. DEBTOR WARRANTS AND COVENANTS. Debtor expressly warrants and covenants as
follows:
15
<PAGE>
a. That except for the security interest granted hereby Debtor is, or to the
extent that this agreement states that the Collateral is to be acquired after
the date hereof, will be, the owner of the Collateral free from any adverse
lien, security interest or encumbrances; and that Debtor will defend the
Collateral against all claims and demands of all persons at any time claiming
the same or any interest therein.
b. The Collateral issued or bought is primarily for use in business.
c. Promptly to notify Secured Party of any change in the location of the
Collateral.
d. To pay all taxes and assessments of every nature which may be levied or
assessed against the Collateral.
e. Not to permit or allow any adverse lien, security interest or encumbrance
whatsoever upon the Collateral and not to permit the same to be attached or
replevined.
f. That the Collateral is in good condition, and that Debtor will, at Debtor's
own expense, keep the same in good condition. The Secured Party may examine and
inspect the Collateral at any reasonable time upon notice.
g. That the Debtor will not use the Collateral in violation of any applicable
statutes, regulations or ordinances.
h. That the Debtor will keep the Collateral at all times insured against risks
of loss or damage by fire (including so-called extended coverage), theft and
such other casualties as the Secured Party may reasonable require, including
collision in the case of any motor vehicle, all in such amounts, under such
forms of policies, upon such terms, for such periods and written by such
companies or underwriters as the Secured Party may approve, losses in all cases
to be payable to the Secured Party and the Debtor as their interests may appear.
All policies of insurance shall provide for at least ten days' prior written
notice of cancellation to the Secured Party; and the Debtor shall furnish the
Secured Party with certificates of such insurance or other evidence satisfactory
to the Secured Party as to compliance with the provisions of this paragraph.
Secured Party may act as an attorney for the Debtor in making, adjusting and
settling claims under or canceling such insurance and endorsing the Debtor's
name on any drafts drawn by insurers of the Collateral.
2. PERFECTION OF SECURITY INTEREST. DEBTOR HEREBY APPOINTS SECURED PARTY AS ITS
IRREVOCABLE ATTORNEY-IN-FACT FOR THE PURPOSE OF EXECUTING ANY DOCUMENTS
NECESSARY TO PERFECT OR TO CONTINUE THE SECURITY INTEREST GRANTED IN THIS
AGREEMENT. DEBTOR WILL REIMBURSE SECURED PARTY FOR ALL EXPENSES FOR THE
PERFECTION AND THE CONTINUATION OF THE PERFECTION OF SECURED PARTY'S SECURITY
INTEREST IN THE COLLATERAL.
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<PAGE>
3. NO VIOLATION. The execution and delivery of this Agreement will not violate
any law or agreement governing Debtor or to which Debtor is a party, and will
not cause Debtor to be in default of any agreement to which it is a party.
4. ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
accounts, chattel paper, or general intangibles, the Collateral is enforceable
in accordance with its terms, is genuine, and complies with applicable laws
concerning form, content and manner of preparation and execution, and all
persons appearing to be obligated on the Collateral have authority and capacity
to contract and are in fact obligated as they appear to be on the Collateral. At
the time any account becomes subject to a security interest in favor of Secured
Party, the account shall be a good and valid account representing an undisputed,
bona fide indebtedness incurred by the account debtor, for merchandise held
subject to delivery instructions and theretofore shipped or delivered pursuant
to a contract of sale, or for services theretofore performed by Debtor with or
for the account debtor; there shall be no setoffs or counterclaims against any
such account; and no agreement under which any deductions or discounts may be
claimed shall have been made with the account debtor except those disclosed to
Secured Party in writing.
5. TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Debtor's business, or as otherwise agreed
between the Parties, Debtor shall not sell, offer to sell, or otherwise transfer
or dispose of the Collateral. While Debtor is not in default under this
Agreement, Debtor may sell inventory, but only in the ordinary course of its
business and only to buyers who qualify as a buyer in the ordinary course of
business. A sale in the ordinary course of Debtor's business does not include a
transfer in partial or total satisfaction of a debt or any bulk sale. Debtor
shall not pledge, mortgage, encumber or otherwise permit the Collateral to be
subject to any lien, security interest or encumbrance, other than the security
interest provided for in this Agreement, without the prior written consent of
Secured Party. This includes security interests even if junior in right to the
security interests granted under this Agreement. Unless waived by Secured Party,
all proceeds from any disposition of the Collateral (for whatever reason) shall
be held in trust for Secured Party and shall not be commingled with any other
funds; provided, however, this requirement shall not constitute consent by
Secured Party to any sale or other disposition. Upon receipt, Debtor shall
immediately deliver any such proceeds to Secured Party.
6. COLLATERAL SCHEDULES AND LOCATIONS. As often as Secured Party shall require,
and insofar as the Collateral consists of accounts and general intangibles,
Debtor shall deliver to Secured Party schedules of such Collateral, including
such information as Secured Party may require, including without limitation
names and address of account debtors and agings of accounts and general
intangibles. Insofar as the Collateral consists of inventory and equipment,
Debtor shall deliver to Secured Party, as often as Lender shall require, such
lists, descriptions, and designations of such Collateral as Secured Party may
require to identify the nature, extent, and location of such Collateral. Such
information shall be submitted for Debtor and each of its subsidiaries or
related companies.
17
<PAGE>
7. DEBTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default, Debtor
may have possession of the tangible personal property and beneficial use of all
the Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Promissory Note, provided that Debtor's right to possession and
beneficial use shall not apply to any Collateral when possession of the
Collateral by Secured Party is required by law to perfect Secured Party's
security interest in such Collateral. Until otherwise notified by Secured Party,
Debtor may collect any of the Collateral consisting of accounts. If Secured
Party at any time has possession of any Collateral, whether before or after an
Event of Default, Secured Party shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral if Secured Party takes
such action for that purpose as Debtor shall request or as Secured Party, in
Secured Party's sole discretion, shall deem appropriate under the circumstances,
but failure to honor any request by Debtor shall not of itself be deemed to be a
failure to exercise reasonable care. Secured Party shall not be required to take
any steps necessary to preserve any rights in the Collateral against prior
parties, nor to protect, preserve or maintain any security interest given to
secure the indebtedness.
8. EXPENDITURES BY SECURED PARTY. If not discharged or paid when due, Secured
Party may (but shall not be obligated to) discharge or pay any amounts required
to be discharged or paid by Debtor under this Agreement, including without
imitation all taxes, liens, security interests, encumbrances, and other claims,
at any time levied or placed on the Collateral. Secured Party also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Secured
Party for such purposes will then bear interest at the rate charged under the
Promissory Note from the date incurred or paid by Secured Party to the date or
repayment by Debtor. All such expenses shall become a part of the indebtedness
and, at Secured Party's option, will (a) be payable on demand, (b) be added to
the balance of the Note and be apportioned among and by payable with any
installment payments to become due during either (i) the term of any applicable
insurance policy or (ii) the remaining term of the Note, or (c) be treated as a
balloon payment which will be due and payable at the Note's maturity. This
Agreement also will secure payment of these amounts. Such right shall be in
addition to all other rights and remedies to which Secured Party may be entitled
upon the occurrence of an Event of Default.
9. APPOINT RECEIVER. To the extent permitted by applicable law, Secured Party
shall have the following rights and remedies regarding the appointment of a
receiver: (a) Secured Party may have a receiver appointed as a matter of right,
(b) the receiver may be an employee of Secured Party and may serve without bond,
and (c) all fees of the receiver and his or her attorney shall become part of
the Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid. The receiver
may be appointed by a court of competent jurisdiction upon ex parte application
and without notice, notice being expressly waived.
10. POWER OF ATTORNEY. Debtor hereby appoints Secured Party as its true and
lawful attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, sue and recover all
sums of money or other property which may now or hereafter become due, owing or
payable form the Collateral; (b) to execute, sign and endorse any and all
18
<PAGE>
claims, instruments, receipts, checks, drafts or warrants issued in payment for
the Collateral; (c) to settle or compromise any and all claims arising under the
Collateral, and, in the place and stead of Debtor, to execute and deliver its
release and settlement for the claim; and (d) to file any claim or claims or to
take any action or institute or take part in any proceedings, either in its own
name or in the name of Debtor, or otherwise, which in the discretion of Secured
Party may seem to be necessary or advisable. This power is given as security for
the Indebtedness, and the authority hereby conferred is and shall be irrevocable
and shall remain in full force and effect until renounced by Secured Party.
UNTIL DEFAULT DEBTOR MAY HAVE POSSESSION OF THE COLLATERAL AND USE IT IN ANY
LAWFUL MANNER, AND UPON DEFAULT, SECURED PARTY SHALL HAVE THE IMMEDIATE RIGHT TO
THE POSSESSION OF THE COLLATERAL.
11. EVENTS OF DEFAULT. Debtor under this Agreement upon the happening of any of
the following events or conditions:
(a) default in the payment or performance of any obligation, covenant or
liability contained or referred to in this Security Agreement herein, the Note
or in any document evidencing the same;
(b) the making or furnishing of any warranty, a representation or statement to
Secured Party by or on behalf of Debtor which proves to have been false in any
material respect when made or furnished;
(c) loss, theft, damage, destruction, sale or encumbrance to or of any of the
Collateral, or the making of any levy seizure or attachment thereof or thereon;
(d) death, dissolution, termination of existence, insolvency, business failure,
appointment of a receiver of any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceedings under any
bankruptcy or insolvency laws of, by or against Debtor or any guarantor or
surety for Debtor.
Upon such default and at any time thereafter, or if it deems itself insecure,
Secured Party may declare all Obligations secured hereby immediately due and
payable and shall have the remedies of a secured party under Article 9 of the
Arizona Uniform Commercial Code. Secured Party may require Debtor to assemble
the Collateral and deliver or make it available to Secured Party at a place to
be designated by Secured Party which is reasonable convenient to both parties.
Expenses of retaking, holding, preparing for sale, selling or the like shall
include Secured Party's reasonable attorney's fees and legal expenses.
No waiver by Secured Party of any default shall operate as a waiver of any other
default or of the same default on a future occasion. The taking of this security
agreement shall not waive or impair any other security said Secured Party may
have or hereafter acquire for the payment of the above indebtedness, nor shall
the taking of any such additional security waive or impair this security
agreement; but said Secured Party may resort to any security it may have in the
order it may deem proper, and notwithstanding any collateral security, Secured
Party shall retain its rights of set-off against Debtor.
19
<PAGE>
All rights of Secured Party hereunder shall inure to the benefit of its
successors and assigns; and all promises and duties of Debtor shall bind his
heirs, executors or administrators or his or its successors or assigns. If there
be more than one Debtor, their liabilities hereunder shall be joint and several.
Dated this 30th day of June, 2000.
DEBTOR: DEBTOR
By: Abcon, Inc. By: Brian Smith
Name: Name:
------------------------------ ------------------------------
Title:
------------------------------
20
<PAGE>
EXHIBIT D
RESIGNATIONS
I hereby resign as an Officer and/or Director of Abcon, Inc. effective as of the
Closing Date of the Stock Purchase Agreement of which this exhibit is made a
part hereof.
--------------------------------------
Earl J. Cook
--------------------------------------
Donald D. Cannella
--------------------------------------
Bradley G. Black
21
<PAGE>
EXHIBIT E
OTHER SETTLEMENT ITEMS
OPEC Loan to Abcon $39,000.00
Loan payments made by OPEC on behalf of Abcon:
Truck #33 (3 Months) $ 2,570.70
Truck #45 (3 Months) 2,224.08
Truck #47 (4 Months) 3,959.88
Truck #50 (3 Months) 2,571.99
----------
11,326.65
FICA on 12-31-99 stock paid by OPEC 2,669.49
----------
52,996.14
Less: Invoices from Abcon to OPEC 37,306.40
----------
Net due OPEC to be added to purchase Note $15,689.74
==========
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