SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter Ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-24362
NUTRICEUTICALS.COM CORPORATION
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(Exact name of small business issuer as specified in its charter)
STATE OF NEVADA 34-1755390
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6950 BRYAN DAIRY ROAD, LARGO, FLORIDA 33777
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (727) 544-8866
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
The number of shares outstanding of the Issuer's common stock at $.001 par value
as of November 12, 1999 was 2,696,707.
<PAGE>
NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 MARCH 31, 1999
------------------ --------------
(UNAUDITED) (AUDITED)
A S S E T S
<S> <C> <C>
Current assets:
Cash and cash equivalents ..................................... $ 4,633 $ 56,986
Accounts receivable, net ...................................... 10,850 9,278
Due from related party ........................................ 3,940 5,171
Inventory ..................................................... 23,292 16,303
Prepaids and other current assets ............................. 199,158 --
--------- ---------
Total current assets ............................................... 241,872 87,738
--------- ---------
Computer software, net ............................................. 41,296 47,500
Deposits ........................................................... 200 380
Intangible assets, net ............................................. 39,556 --
--------- ---------
TOTAL ASSETS ....................................................... $ 322,925 $ 135,618
========= =========
L I A B I L I T I E S A N D S H A R E H O L D E R S ' E Q U I T Y
Current liabilities:
Accounts payable .............................................. $ 142,905 $ 80,186
Accrued expenses .............................................. 130,275 17,505
Note payable .................................................. 21,326
Related party obligations ..................................... 200,000 --
--------- ---------
Total current liabilities .......................................... 494,506 97,691
--------- ---------
Shareholders' equity:
Common stock, at par value .................................... 2,697 2,677
Additional paid-in capital .................................... 179,705 139,725
Accumulated deficit ........................................... (104,475) --
Net loss ...................................................... (249,508) (104,475)
--------- ---------
Net shareholders' equity ........................................... (171,581) 37,927
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ......................... $ 322,925 $ 135,618
========= =========
</TABLE>
See notes to condensed consolidated financial statements
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<PAGE>
NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY
Condensed Consolidated Statements of Operations
For the Three Months and Six Months Ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999
------------------ ------------------
<S> <C> <C>
Net revenues ................................................. $ 16,799 $ 50,697
Cost of revenues ............................................. 11,804 26,590
----------- -----------
Gross profit .......................................... 4,995 24,107
Selling, general and administrative expenses ................. 168,810 270,117
----------- -----------
Operating loss before other income and expense ............... (163,815) (246,010)
Other income (expense):
Interest income ....................................... 224 559
Other income and expenses, net ........................ 360 360
Interest expense ...................................... (3,827) (4,416)
----------- -----------
Total other income (expense) ................................. (3,244) (3,498)
----------- -----------
NET LOSS ..................................................... $ (167,059) $ (249,508)
=========== ===========
Basic and diluted loss per share ............................. $ (0.06) $ (0.09)
=========== ===========
Basic and diluted weighted number of common shares outstanding 2,687,794 2,681,496
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
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<PAGE>
NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY
Statements of Changes in Net Deficiency In Liquidation
For the Three Months and Six Months Ended September 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
Increase in net assets in liquidation:
Sales ........................................................ $ -- $ --
Decreases in net assets in liquidation:
Professional fees ............................................ 500 3,875
Office expense ............................................... 40 60
--------- ---------
Decrease in net assets in liquidation ................... (540) (3,935)
Beginning net liabilities in liquidation ........................... (12,058) (8,663)
--------- ---------
Ending net liabilities in liquidation .............................. $ (12,598) $ (12,598)
========= =========
Loss per share:
Loss attributable to common stockholders ..................... $ (540) $ (3,935)
========= =========
Basic and diluted loss per share ............................. $ -- $ (0.02)
========= =========
Basic and diluted weighted number of common shares outstanding 175,514 175,514
========= =========
See notes to condensed consolidated financial statements
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<PAGE>
NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THE SIX MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED)
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss ............................................................... $(249,508)
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation and amortization 6,648
Changes in operating assets and liabilities:
Accounts receivable .......................................... (1,572)
Inventory .................................................... (6,989)
Prepaid expenses and other current assets .................... (197,927)
Accounts payable ............................................. 62,719
Accrued expenses ............................................. 112,770
---------
NET CASH USED IN OPERATING ACTIVITIES ........................................ (273,859)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposits ............................................................... 180
---------
NET CASH PROVIDED BY INVESTING ACTIVITIES .................................... 180
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of note payable ................................. 23,603
Repayments of principal on note payable ................................ (2,277)
Proceeds from related party obligations ................................ 200,000
---------
NET CASH PROVIDED BY FINANCING ACTIVITIES .................................... 221,326
---------
NET INCREASE (DECREASE) IN CASH .............................................. (52,353)
CASH AT BEGINNING OF PERIOD .................................................. 56,986
---------
CASH AT END OF PERIOD ........................................................ $ 4,633
=========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest ............................... $ 189
=========
</TABLE>
In August 1999, the Company issued 20,000 shares of its common stock to a
non-affiliated third party for purchase of its World Wide Web Internet site
domain name.
See notes to condensed consolidated financial statements
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<PAGE>
Nutriceuticals.com Corporation and Subsidiary
Notes to Condensed Consolidated Financial Statements
(Unaudited)
September 30, 1999
NOTE A-BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instruction to Form 10-QSB and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month and six
month periods ended September 30, 1999 and 1998 are not necessarily indicative
of the results that may be expected for the year ending March 31, 2000. For
further information, refer to the consolidated financial statements and
footnotes included in the Company's Form 10-KSB for the year ended March 31,
1999.
NOTE B-PRINCIPLES OF CONSOLIDATION
The accompanying condensed consolidated financial statements include
the accounts of Nutriceuticals.com Corporation and its subsidiary,
Healthseek.com Corp. (collectively the "Company"). All intercompany balances and
transactions have been eliminated.
NOTE C-STOCKHOLDERS' EQUITY
In October 1999, the Company effected a one-for-two reverse stock
split of the Common Stock of the Company. The accompanying unaudited condensed
consolidated financial statements have been retroactively restated, as of
September 30, 1999, to reflect the one-for-two reverse stock split.
Basic earnings (loss) per common share is computed by dividing income
available to common stockholders by the weighted-average number of common shares
outstanding during the period. Diluted earnings (loss) per share gives effect to
convertible preferred shares which are considered to be dilutive common stock
equivalents.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
OVERVIEW
The Company derives its revenues from online retail sales of natural
products. Revenues are billed and recognized when product is shipped to the
customer, net of discounts, allowances, returns and credits. Cost of goods sold
is comprised of direct product costs. Selling, general and administrative costs
include administrative, sales and marketing and other indirect operating costs.
RESULTS OF OPERATIONS
Three Months and Six Months ended September 30, 1999 and September 30, 1998
In March 1997, the Company adopted a plan of liquidation by which it
sold its major product line and subsequently disposed of all of its operating
assets by March 31, 1998. In March 1999, the Company acquired all of the
outstanding common stock of Nutriceuticals.com Corporation ("Nutriceuticals"), a
Florida corporation, which was organized in September 1998. The Company then
merged with Nutriceuticals and changed its name to Nutriceuticals.com
Corporation. For the three months and six months ended September 30, 1998 and
prior to the acquisition of Nutriceuticals on September 8, 1998, the Company was
accounted for on the liquidation basis of accounting.
The Company had revenues of $16,799 and $50,697 for the three months
and six months ended September 30, 1999. Gross profit was $4,995 and $24,107
respectively, for the three month and six month periods ended September 30,
1999. Gross margin was 29.7% and 47.6% for the three months and six months ended
September 30, 1999. The decline was primarily attributable to an increase in the
mix of sales, which yields a lower gross margin. Selling, general and
administrative expenses were $168,810 and $270,117 respectively, for the three
month and six month periods ended September 30, 1999.
The Company has no income tax provision for the periods presented due
to its net operating losses. These net operating losses may be carried forward
for up to 15 years to offset future taxable income.
Management believes that there was no material effect on operations or
the financial condition of the Company as a result of inflation for the three
months and six months ended September 30, 1999. Management also believes that
its business is not seasonal; however, significant promotional activities can
have a direct impact on sales volume in any given quarter.
Interest expense, net of interest income, was $3,603 and $3,857 for the
three months and six months ended September 30, 1999, and was a result of
increased borrowings for financing of additional working capital needs.
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<PAGE>
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations through loans from within the
Company. The Company had a working capital deficit of $252,634 at September 30,
1999. The Company estimates that it will need the proceeds from its secondary
offering for on-going Web site development, marketing, promotions, and for
general working capital purposes over the next six months, including the
Company's plans to hire additional full-time management personnel and acquire
new office space.
Net cash used in operating activities was ($273,859) for the six months
ended September 30, 1999. The usage of cash is primarily attributable to the net
operating loss as well as an increase in accounts receivable ($1,572), as a
result of increased sales by the Company during such period, and an increase in
inventory ($6,989), an increase in prepaid expenses and other current assets
($197,927), partially offset by an increase in accounts payable $62,719, and an
increase in accrued expenses $112,770.
Net cash provided by investing activities was $180 representing a
decrease in deposits.
Net cash provided by financing activities was $221,326 representing
proceeds from issuance of a note payable $23,603, proceeds from related party
obligations $200,000, partially offset by repayments of principal on a note
payable ($2,277).
In May 1999, 21st Century Healthcare Fund, LLC, an affiliate of a
director of the Company, Jugal K. Taneja, loaned $50,000 to the Company for the
purpose of assisting the Company with its working capital needs. The principal
sum, together with interest on the unpaid principal balance at an annual rate
equal to prime plus one percent, is due and payable on demand at any time
following the earlier to occur of either (i) a public offering of the Company's
common stock pursuant to a registration statement filed with the Securities and
Exchange Commission, or (ii) December 31, 1999.
In July 1999, Stephen M. Watters, the President of the Company, loaned
$70,000 to the Company for the purpose of assisting the Company with its working
capital needs. The principal sum, together with interest on the unpaid principal
balance at an annual rate equal to prime plus one percent, is due and payable on
demand at any time following the earlier to occur of either (i) a public
offering of the Company's common stock pursuant to a registration statement
filed with the Securities and Exchange Commission, or (ii) December 31, 1999.
In August 1999, Carnegie Capital, Ltd., an affiliate of a director of
the Company, Jugal K. Taneja, loaned $20,000 to the Company for the purpose of
assisting the Company with its working capital needs. The principal sum,
together with interest on the unpaid principal balance at an annual rate equal
to prime plus one percent, is due and payable on demand at any time following
the earlier to occur of either (i) a public offering of the Company's common
stock pursuant to a registration statement filed with the Securities and
Exchange Commission, or (ii) December 31, 1999.
In August 1999, a director of the Company, Howard Howell D.D.S., loaned
$50,000 to the Company for the purpose of assisting the Company with its working
capital needs. The principal sum, together with interest on the unpaid principal
balance at an annual rate equal to prime plus one percent, is due and payable on
demand at any time following the earlier to occur of either (i) a public
offering of the Company's common stock pursuant to a registration statement
filed with the Securities and Exchange Commission, or (ii) December 31, 1999.
- 8 -
<PAGE>
On August 16, 1999, the Company issued 20,000 (post October 1999
one-for-two reverse stock split) shares of its common stock to a non-affiliated
third party for all right, title and interest in the World Wide Web Internet
site domain name "Nutriceuticals.com" and any and all assets related to the
operations of a Website under that domain name, for a value of $40,000.
On August 8, 1999, the Company entered into an Agreement and Plan of
Reorganization with Dynamic Health Products, Inc. ("Dynamic"), a Florida
corporation, to acquire its wholly-owned subsidiary, Becan Distributors, Inc.
("Becan"), an Ohio corporation, in exchange for 2,000,000 shares of common stock
(post October 1999 one-for-two reverse stock split) and $2,000,000 cash. An
additional 1,000,000 shares (post October 1999 one-for-two reverse stock
split) will be held in escrow in connection with the acquisition to be issued
pending the attainment, by Becan, of certain financial targets, for the fiscal
years ending March 31, 2000 and 2001. Such acquisition is subject to the
consummation of a secondary offering by the Company.
In October 1999, the Company established a $100,000 revolving line of
credit with First Community Bank of America, to provide additional working
capital for the Company. In November 1999, the borrowing limit on the line of
credit was increased to $250,000. The note bears interest at 6.5% per annum on
the unpaid outstanding principal of each advance, payable monthly. The note is
secured by a guarantee in the form of a Third Party Pledge Agreement in favor of
First Community Bank of America, from Dynamic Health Products, Inc., of which
Jugal K. Taneja is a majority shareholder. The principal on the note is due and
payable on October 10, 2000.
The Company will need additional capital in the future. In order to
satisfy its cash requirements in the next six months, the Company estimates that
it will need approximately $5 million to fund its operations and its marketing
strategies designed to increase traffic to its Web sites. The Company also
anticipates expending approximately $500,000 for development of its Web site
infrastructures, $1 million for the employment of current and additional
personnel (up to 15 additional persons), and $100,000 for the acquisition of
office and warehouse facilities.
The Company has filed a registration statement with the Securities and
Exchange Commission, however there can be no assurance as to the completion of
the secondary offering. Future equity investments in the Company may have a
dilutive effect on the percentage ownership of the Company's present
shareholders. There can be no assurances that future capital will become
available when needed, or at all. In the event that the Company is not able to
obtain the needed funds in the future, it may not be able to continue operations
or put its business plan into full effect.
YEAR 2000 STATEMENT
The Year 2000 issue encompasses the required recognition of computer
hardware and software systems and computer controlled devices, including
equipment, used in the Company's distribution and manufacturing operations to
properly acknowledge the change from Year 1999 to Year 2000. The failure of any
hardware and software systems or equipment to timely and accurately recognize
such change could result in partial or complete systems failure. In the normal
course of business, the Company relies on products and services from critical
vendors, customers and other third parties whose computer systems must also be
Year 2000 compliant in order for the Company to realize the uninterrupted flow
of its business operations. The Company is actively taking steps to ensure that
its systems and equipment will be Year 2000 compliant, including assessing the
scope of work, prioritizing, certifying compliance, and testing compliance.
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<PAGE>
The Company has identified those systems and equipment in its
operations that are considered to be critical to the Company's day to day
operations. All of the Company's systems and equipment utilized in the its
operations was tested for Year 2000 compliance during February and March 1999,
with approximately 95% of such systems and equipment being certified as Year
2000 compliant as of September 30, 1999. The Company is in the process of
obtaining written assurances from its third-party software providers that the
software used by the Company is Year 2000 compliant. In addition, the Company is
actively seeking assurances of Year 2000 compliance from each of its key
suppliers, customers and other third parties with whom the Company conducts
business. A lack of response or inadequate or inaccurate information from such
third parties could materially affect the Company's assessment for Year 2000
readiness. Until assessments are completed, which is expected to occur during
1999, the Company cannot predict whether the failure of any such third party to
be Year 2000 compliant will have a material adverse effect on the Company's
business.
To date, the costs incurred by the Company to address Year 2000 issues
have been immaterial, and the Company expects that the costs to complete Year
2000 compliance certification, testing and verifications will also be
immaterial. Where appropriate, the Company will develop contingency plans in
areas it determines that Year 2000 readiness is insufficient. However, no
assurances can be given that the Company's Year 2000 efforts are appropriate,
adequate, or complete. In addition, the Company is unable to fully determine the
effect of a failure of its own systems or those of any third party with whom it
conducts business, but any significant failures could have a material adverse
effect on the Company's financial condition, results of operations and cash
flows.
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<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, the Company may become involved in litigation
arising in the ordinary course of its business. The Company is not presently
subject to any material legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. - NOT APPLICABLE.
ITEM 4. - NOT APPLICABLE.
ITEM 5. OTHER INFORMATION.
On August 16, 1999, Jugal K. Taneja resigned as Chief Executive
Officer, terminated his employment agreement with the Company, and entered into
a Consulting Agreement with the Company, effective August 16, 1999 for a term of
thirty-two (32) months, until April 15, 2002.
In October 1999, the Company effected a one-for-two reverse stock
split of the Common Stock of the Company. The accompanying unaudited condensed
consolidated financial statements have been retroactively restated, as of
September 30, 1999, to reflect the one-for-two reverse stock split.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS.
The following exhibits are filed with this report:
2.1 Agreement And Plan of Reorganization, dated September 8, 1999, by and
between Nutriceuticals.com Corporation and Dynamic Health Products,
Inc, the sole stockholder of Becan Distributors, Inc. (1)
10.1 Employment Agreement by and between Nutriceuticals.com Corporation and
Stephen M. Watters, dated as of April 1, 1999. (2)
10.2 Strategic Alliance Agreement by and between IndigoCity.com, Inc. and
Nutriceuticals.com Corporation, dated as of April 13, 1999. (2)
10.3 Consulting Agreement by and between the Nutriceuticals.com Corporation
and Jugal K. Taneja, dated as of August 16, 1999. (3)
10.4 Line of Credit Agreement in favor of First Community Bank of America,
from the Company, dated October 4, 1999.
10.5 Line of Credit Agreement in favor of First Community Bank of America,
from the Company, dated November 10, 1999.
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<PAGE>
27.1 Financial Data Schedule (for SEC use only).
- ------------------
(1) Incorporated by reference to the Company's Registration Statement
on Form SB-2, Amendment No. 1, filed September 13, 1999,
Registration Statement No. 333-81835.
(2) Incorporated by reference to the Company's Registration Statement
on Form SB-2, filed June 29, 1999, Registration Statement No.
333-81835.
(3) Incorporated by reference to the Company's Registration Statement
on Form SB-2, Amendment No.2, filed November 12, 1999,
Registration Statement No. 333-81835.
(b) REPORTS ON FORM 8-K.
During the six months ended September 30, 1999, the Company filed no
reports on Form 8-K.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
NUTRICEUTICALS.COM CORPORATION
Date: November 12, 1999 By: /s/ STEPHEN M. WATTERS
--------------------------
Stephen M. Watters
President, Chief Executive Officer,
Chief Financial Officer,
and Director
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
10.4 Line of Credit Agreement in favor of First Community Bank of America,
from the Company, dated October 4, 1999.
10.5 Line of Credit Agreement in favor of First Community Bank of America,
from the Company, dated November 10, 1999.
27 Financial Data Schedule
- 13 -
LINE OF CREDIT AGREEMENT
Nutriceuticals.Com Corp FIRST COMMUNITY BANK OF AMERICA
6950 Bryan Dairy Rd. P.O. Box 20559
Largo, Florida St. Petersburg, Florida
33777 33742
Loan #: 23627
Date: October 4, 1999
Credit Line Amount: $100,000.00
You have extended to me a line of credit in the amount of One Hundred
Thousand and 00/000 ($100,000.00).
You will make loans to me from time to time until 5:00 p.m. on October
5, 2000. Although the line of credit expires on that date, I will remain
obligated to perform all my duties under this agreement as long as I owe you any
money advanced according to the terms of this agreement, as evidenced by any
note or notes I have signed to repay these amounts.
This line of credit is an agreement between you and me. It is not
intended that any third party receive any benefit from this agreement, whether
by direct payment, reliance for future payment or in any other manner. This
agreement is not a letter of credit.
1. AMOUNT: This line of credit is:
[XX} OBLIGATORY: You may not refuse to make a loan to me under this
line of credit unless one of the following occurs;
a: I have borrowed the maximum amount available to me;
b: This line of credit has expired;
c: I have defaulted on the note (or notes) which show my indebtedness
under this line of credit;
d. I have violated any term of this line of credit or any note or
other agreement entered into in connection with this line of
credit;
e. N/A
[ ] DISCRETIONARY: You may refuse to make a loan to me under this line of credit
once the aggregate outstanding advances equal or exceed $.
Subject to the obligatory or discretionary limitations above, this line of
credit is:
[XX] OPEN-END (Business or Agricultural only): I may borrow up to the
maximum amount of principal more than one time.
[ ] CLOSED-END I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of
credit agreement as set out in the promissory note I signed on October 4, 1999,
or any other note(s) I sign at a later time which represent advances under this
agreement. The note(s) set(s) out the terms relating to maturity, interest rate,
repayment and advances. If indicated on the promissory note, the advances will
be made as follows:
I hereby authorize Lender to pay advances against any loan with Lender
which I am a signer, maker, co-maker or guarantor; or deposit any advances
into my deposit account with Lender on which I am a signer, these advances
can be authorized by me or my designated representative in writing or
verbally, either in person or by phone. The minimum draw amount will be
$1,000.00 or the balance of the Line.
3. RELATED DOCUMENTS: I have signed the following documents in connection with
this line of credit and note(s) entered into in accordance with this line of
credit:
Security Agreement dated October 4, 1999;
Assignment of Savings Deposit dated October 4, 1999.
4. REMEDIES: If I am in default on the notes you may:
a. take any action as provided in the related documents:
b. without notice to me, terminate this line of credit:
By selecting any of these remedies you do not give up your right to later use
any other remedy. By deciding not to use any remedy should I default, you do
NOT waive your right to later consider the event a default, if it happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I will pay
your reasonable attorney's fees, where permitted by law. I will also pay your
court costs and cost of collection, where permitted by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe you money
for advances made in accordance with the line of credit, I will do the
following:
a. maintain books and records of my operations relating to the need for
this line of credit;
b. permit you or any of your representatives to inspect and/or copy these
records;
c. provide to you any documentation requested by you which support the
reason for making any advance under this line of credit;
d. permit you to make any advance payable to the seller (or seller and me)
of any items being purchased with that advance;
e. provide periodic financial statements as you may reasonably request from
time to time;
f. N/A
7. NOTICES: All notices and other correspondence with me should be sent to my
address stated above. The notice or correspondence shall be effective when
deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written
agreement signed by you and me. The laws of the State of Florida will govern
this agreement. Any term of this agreement which is contrary to applicable law
will not be effective, unless the law permits you and me to agree to such a
variation.
First Community Bank of America SIGNATURES: I AGREE TO THE TERMS OF
THIS LINE OF CREDIT. I HAVE RECEIVED
A COPY ON TODAY'S DATE.
Nutriceuticals.Com Corporation
/s/ SCOTT C. BOYLE /s/ STEPHEN M. WATTERS
- ---------------------------------- --------------------------------------
Scott C. Boyle, President Stephen M. Watters, President
/s/ JUGAL K. TANEJA
--------------------------------------
Jugal K. Taneja, Secretary
<PAGE>
NUTRICEUTICALS.COM CORPORATION
6950 BRYAN DAIRY RD.
LARGO, FL 33777
BORROWER'S NAME AND ADDRESS
"I" includes each Borrower above, joint and severally.
FIRST COMMUNITY BANK OF AMERICA
6100 4TH STREET NORTH
ST. PETERSBURG, FL 33703
LENDER'S NAME AND ADDRESS
"You" means the lender, its successors and assigns.
Loan Number 23627
-----------------------
Date OCTOBER 4, 1999
-----------------------------
Maturity Date OCTOBER 5, 2000
--------------------
Loan Amount $100,000.00
----------------------
Renewal Of
-----------------------
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of ONE HUNDRED THOUSAND AND NO/100***************
Dollars $100,000.00
[ ] SINGLE ADVANCE: I will receive all of this principal sum on _______________.
No additional advances are contemplated under this note.
[X] MULTIPLE ADVANCE: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On OCTOBER 4, 1999 _______________
I will receive the amount of $___________________ and future principal
advances are contemplated.
CONDITIONS: The conditions for future advances are AS PER THE TERMS OF THE
LINE OF CREDIT AGREEMENT OF EVEN DATE.
____________________________________________________________________________
[X] OPEN END CREDIT: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to all
other conditions and expires on OCTOBER 10, 2000.
[ ] CLOSED END CREDIT: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
OCTOBER 4, 1999 at the rate of 6.500% per year until OCTOBER 10, 20000
[ ] VARIABLE RATE: This rate may then change as stated below.
[ ] INDEX RATE: The future rate will be ____________________ the following
index rate:_________________________________________________________________
____________________________________________________________________________
[ ] NO INDEX: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[ ] FREQUENCY AND TIMING: The rate on this note may change as often as
_________________________
A change in the interest rate will take effect _________________________
[ ] LIMITATIONS: During the term of this loan, the applicable annual
interest rate will not be more than _____% or less than _______%. The rate
may not change more than ____________% each _______________________.
EFFECT OF VARIABLE RATE: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change.
[ ] The amount of the final payment will change.
[ ]_________________________________________________________________________
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[ ] on the same fixed or variable rate basis in effect before maturity (as
indicated above).
[X] at a rate equal to 18.00%
[X] LATE CHARGE: If a payment is made more than 10 days after it is due, I agree
to pay a late charge of 5.000% OF THE LATE PAYMENT
[X] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [ ] are [X] are not included in the principal amount above:
DOC STAMPS - $350.00 LOAN FEE- $125.00
PAYMENTS: I agree to pay this note as follows:
[ ] INTEREST: I agree to pay accrued interest ON THE 5TH DAY OF EACH MONTH
BEGINNING NOVEMBER 5, 1999
____________________________________________________________________________
[ ] PRINCIPAL: I agree to pay the principal OCTOBER 5, 2000
____________________________________________________________________________
[ ] INSTALLMENTS: I agree to pay this note in ____ payments. The first payment
will be in the amount of $________________ and will be due ________________.
A payment of $______________ will be due ____________________ thereafter.
The final payment of this entire unpaid balance of principal and interest
will be due_____________________________________________.
ADDITIONAL TERMS:
SECURITY: This note is separately secured by (describe separate document by type
and date); SECURITY AGREEMENT OF EVEN DATE.
(This action is for your internal use. Failure to list a separate security
document does not mean the agreement will not secure this note.)
Signature for Lender
____________________________________
____________________________________
PURPOSE: The purpose of this loan is
BUSINESS: WORKING CAPITAL
____________________________________
SIGNATURES: I AGREE TO THE TERMS OF
THIS NOTE (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's date.
NUTRICEUTICALS.COM CORPORATION
- -------------------------------------
BY: /s/ STEPHEN M. WATTERS, PRESIDENT
- -------------------------------------
STEPHEN M. WATTERS, PRESIDENT
BY: /s/ JUGAL K. TANEJA, SECRETARY
- -------------------------------------
JUGAL K. TANEJA, SECRETARY
<PAGE>
DEFINITIONS: As used on page 1, "[X]" means the terms that apply to this loan.
"I", "me" or "my" means each Borrower who signs this note and each other person
or legal entity (including guarantors, endorsers, and sureties) who agrees to
pay this note (together referred to as "us", "You" or "your" means the Lender
and its successors and assigns.
APPLICABLE LAW: The law of the state of Florida will govern this note. Any
term of this note which is contrary to applicable law will not be effective,
unless the law permits you and me to agree to such a variation. If any provision
of this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to time,
until paid in full. If I receive the principal in more than one advance, each
advance will start to earn interest only when I receive the advance. The
interest rate in effect on this note at any given time will apply to the entire
principal advanced at that time. Notwithstanding anything to the contrary, I do
not agree to pay and you do not intend to charge any rate of interest that is
higher than the maximum rate of interest you could charge under applicable law
for the extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest than
allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the rate
on this note will be the same rate you charge on any other loans or class of
loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purpose of interest calculation, the accrual method will determine
the number of days in a "year". If no accrual method is stated, then you may use
any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advances and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession for
collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of which
you are entitled to demand payment under the terms of this note at the time you
set off. This total includes any balance the due date for which you properly
accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor occurs
because you set off this debt against any of my accounts. I agree to hold you
harmless from any such claims arising as a result of your exercise of your right
of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required: (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I ow him through court proceedings; (5) I die, am declared
incompetant, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without
first notifying you before making such a change; (10) I fail to plant, cultivate
and harvest crops in due season; (11) any loan proceeds are used for a purpose
that will contribute to excessive erosion of highly erodible land or to the
conversion of wetlands to produce an agricultural commodity, as further
explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the "Set-off" paragraph herein.
(3) You may demand security, additional security, or additional parties to be
obligated to pay this note as a condition for not using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the an event as a default
if it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin, or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any reasonable
fee you incur with such attorney plus court costs (except where prohibited by
law). I agree that reasonable attorneys' fees shall be construed to mean 10% of
the principal sum named in this note, or such larger fee that the court may
determine to be reasonable and just. To the extent permitted by the United
States Bankruptcy Code, I also agree to pay the reasonable attorney's fees and
costs you incur to collect this debt as awarded by any court exercising
jurisdiction under the Bankruptcy Code.
WAIVER: I give up my right to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
I waive any defenses I have based on suretyship or impairment of collateral.
TO THE EXTENT PERMITTED BY LAW, I ALSO WAIVE MY RIGHT TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION ARISING FROM THIS NOTE AND ANY OTHER AGREEMENT
EXECUTED IN CONJUNCTION WITH THIS CREDIT TRANSACTION.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may sue me alone, or anyone else who is obligated
on this note, or any number of us together, to collect this note. You may do so
without any notice that it has not been paid (notice of dishonor). You may
without notice release any party to this agreement without releasing any other
party. If you give up any of your rights, with or without notice, it will not
affect my duty to pay this note. Any extension of new credit to any of us, or
renewal of this note by all or less than all of us will not release me from my
duty to pay it. (Of course, you are entitled to only one payment in
full). I agree that you may at your option extend this note or the debt
represented by this note, or any portion of the note or debt, from time to time
without limit or notice and for any term without affecting my liability for
payment of the note, I will not assign my obligation under this agreement
without your prior written approval.
CREDIT INFORMATION; I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to report
to others your credit experience with me (such as a credit reporting agency). I
agree to provide you, upon request, any financial statement or information you
may deem necessary. I warrant that the financial statements and information I
provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in writing
of any change in my address. I will give any notice to you by mailing it first
class to your address stated on page 1 of this agreement, or to any other
address that you have designated.
<TABLE>
<CAPTION>
DATE OF PRINCIPAL BORROWER'S PRINCIPAL PRINCIPAL INTEREST INTEREST INTEREST
TRANSACTION ADVANCE INITIALS PAYMENTS BALANCE RATE PAYMENTS PAID
(NOT REQUIRED) THROUGH
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ / $ $ $ % $ / /
- ---------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
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/ / $ $ $ % $ / /
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/ / $ $ $ % $ / /
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/ / $ $ $ % $ / /
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/ / $ $ $ % $ / /
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SECURITY AGREEMENT
(COLLATERAL PLEDGE AGREEMENT)
<TABLE>
<S> <C> <C> <C>
DATE OCTOBER 4, 1999
- ---------------------------------------------------------------------------------------------------
DEBTOR | NUTRICEUTICALS.COM CORPORATION | SECURED PARTY | FIRST COMMUNITY BANK OF AMERICA
- ---------------------------------------------------------------------------------------------------
BUSINESS | | |
OR | | ADDRESS |
RESIDENCE | | |
ADDRESS |6950 BRYAN DAIRY RD. | |6100 4TH STREET NORTH
- ---------------------------------------------------------------------------------------------------
CITY | | CITY |
STATE & | | STATE & |
ZIP CODE |LARGO, FL 33777 | ZIP CODE | ST PETERSBURG, FL 33703
- ---------------------------------------------------------------------------------------------------
</TABLE>
1. SECURITY INTEREST AND COLLATERAL. To secure (check one):
[ ] the payment and performance of each and every debt, liability and
obligation of every type and description which Debtor may now or at any time
hereafter owe to Secured Party (whether such debt, liability or obligation
now exists or is hereafter created or incurred, and whether it is or may be
direct or indirect, due or to become due, absolute or contingent, primary
or secondary, liquidated or unliquidated, or joint, several or joint and
several; all such debts, liabilities and obligations being herein
collectively referred to as the "Obligations").
[X] the debt, liability or obligation of the Debtor to secured party
evidenced by the following NOTE OF EVEN DATE I/A/O $100,000.00, and any
extensions, renewals or replacements thereof (herein referred to as the
"Obligations").
Debtor hereby grants Secured Party a security interest (herein called the
"Security Interest") in (check one):
[ ] all property of any kind now or at any time hereafter owned by Debtor, or
in which Debtor may now or hereafter have an interest, which may now be or may
at any time hereafter come into the possession or control of Secured Party or
into the possession or control of Secured Party's agents or correspondents,
whether such possession or control is given for collateral purposes or for
safekeeping, together with all rights in connection with such property (herein
called the "Collateral").
[X] the property owned by Debtor and held by Secured Party that is described
as follows: FIRST COMMUNITY BANK OF AMERICA CERTIFICATE OF DEPOSIT #30023878
______________________________________________________________________________
together with all rights in connection with such property (herein called the
"Collateral").
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents, warrants and
covenants that:
(a) Debtor will duly endorse, in blank, each and every instrument
constituting Collateral by signing on said instrument or by signing a separate
document of assignment or transfer, if required by Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all liens,
encumbrances, security interests and restrictions, except the Security Interest
and any restrictive legend appearing on any instrument constituting Collateral.
(c) Debtor will keep the Collateral free and clear of all liens, encumbrances
and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental charges
levied or assessed upon or against any Collateral.
(e) At any time, upon request by Secured Party, Debtor will deliver to
Secured Party all notices, financial statements, reports or other communications
received by Debtor as an owner or holder of the Collateral.
(f) Debtor will upon receipt deliver to Secured Party in pledge as additional
Collateral all securities distributed on account of the Collateral such as
stock dividends and securities resulting from stock splits, reorganizations and
recapitalizations.
THIS AGREEMENT CONTAINS ADDITIONAL PROVISIONS SET FORTH ON PAGE 2 HEREOF,
ALL OF WHICH ARE MADE A PART HEREOF.
NUTRICEUTICALS.COM CORPORATION
--------------------------------
DEBTOR'S NAME
BY: /s/ STEPHEN M. WATTERS
-----------------------------
STEPHEN M. WATTERS
TITLE: PRESIDENT
--------------------------
BY: /s/ JUGAL K. TANEJA
-----------------------------
JUGAL K. TANEJA
TITLE: SECRETARY
--------------------------
<PAGE>
ADDITIONAL PROVISIONS
3. RIGHTS OF SECURED PARTY. Debtor agrees that Secured Party may at any time,
whether before or after the occurrence of an Event of Default and without notice
or demand of any kind, (i) notify the obligor on or issuer of any Collateral to
make payment to Secured Party of any amounts due or distributable thereon, (ii)
in Debtor's name or Secured Party's name enforce collection of any Collateral by
suit or otherwise, or surrender, release or exchange all or any part of it or
compromise, extend or renew for any period any obligation evidenced by the
Collateral, (iii) receive all proceeds of the Collateral, and (iv) hold any
increase or profits received from the Collateral as additional security for the
Obligations, except that any money received from the Collateral shall, at
Secured Party's option, be applied in reduction of the Obligations, in such
order of application as Secured Party may determine, or be remitted to Debtor.
4. EVENTS OF DEFAULT. Each of the following occurrences shall constitute an
event of default under this Agreement (herein called "Event of Default"); (i)
Debtor shall fail to pay any or all of the Obligations when due or (if payable
on demand) on demand, or shall fail to observe or perform any covenant or
agreement herein binding on it; (ii) any representation or warranty by Debtor
set forth in this Agreement or made to Secured Party in any financial statements
or reports submitted to Secured Party by or on behalf of Debtor shall prove
materially false or misleading; (iii) a garnishment summons or a writ of
attachment shall be issued against or served upon the Secured Party for the
attachment of any property of the Debtor or any indebtedness owing to Debtor;
(iv) Debtor or any guarantor of any Obligation shall (A) be or become insolvent
(however defined); (B) voluntarily file, or have filed against it involuntarily,
a petition under the United States Bankruptcy Code; or (C) if a corporation,
partnership or organization, be dissolved or liquidated or, if a partnership,
suffer the death of a partner or, if an individual, die; or (D) go out of
business; (v) Secured Party shall in good faith believe that the value then
realizable by collection or disposition of the Collateral, after deduction of
expenses of collection and disposition, is less than the aggregate unpaid
balance of all Obligations then outstanding; (vi) Secured Party shall in good
faith believe that the prospect of due and punctual payment of any or all of the
Obligations is impaired.
5. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of an Event of Default
and at any time thereafter, Secured Party may exercise any one or more of the
following rights or remedies; (i) declare all unmatured Obligations to be
immediately due and payable, and the same shall thereupon be immediately due and
payable, without presentment or other notice or demand; (ii) exercise all voting
and other rights as a holder of the Collateral; (iii) exercise and enforce any
or all rights and remedies available upon default to a secured party under the
Uniform Commercial Code, including the right to offer and sell the Collateral
privately to purchasers who will agree to take the Collateral for investment and
not with a view to distribution and who will agree to the imposition of
restrictive legends on the certificates representing the Collateral, and the
right to arrange for a sale which would otherwise qualify as exempt from
registration under the Securities Act of 1933; and if notice to Debtor of any
intended disposition of the Collateral or any other intended action is required
by law in a particular instance, such notice shall be deemed commercially
reasonable if given at least 10 calendar days prior to the date of intended
disposition or other action; (iv) exercise or enforce any or all rights or
remedies available to Secured Party by law or agreement against the Collateral,
against Debtor or against any other person or property. Upon the occurrence of
the Event of Default described in Section 4(iv)(B), all Obligations shall be
immediately due and payable without demand or notice thereof.
6. MISCELLANEOUS. Any disposition of the Collateral in the manner provided in
Section 5 shall be deemed commercially reasonable. This Agreement can be waived,
modified, amended, terminated or discharged, and the Security Interest can be
released, only explicitly in a writing signed by Secured Party. A waiver signed
by Secured Party shall be effective only in the specific instance and for the
specific purpose given. Mere delay or failure to act shall not preclude the
exercise or enforcement of any of Secured Party's rights or remedies. All rights
and remedies of Secured Party shall be cumulative and may be exercised
singularly or concurrently, at Secured Party's option, and the exercise or
enforcement of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other. All notices to be given to Debtor
shall be deemed sufficiently given if delivered or mailed by registered or
certified mail, postage prepaid, to Debtor at its address set forth above or at
the most recent address shown on the Secured Party's records. Secured Party's
duty of care with respect to Collateral in its possession (as imposed by law)
shall be deemed fulfilled if Secured Party exercises reasonable care in
physically safekeeping such Collateral or, in the case of Collateral in the
custody or possession of a bailee or other third person, exercises reasonable
care in the selection of the bailee or other third person, and Secured Party
need not otherwise preserve, protect, insure or care for any Collateral. Secured
Party shall not be obligated to preserve any rights Debtor may have against
prior parties, to exercise at all or in any particular manner any voting rights
to which may be available with respect to any Collateral, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application. Debtor will
reimburse Secured Party for all expenses (including reasonable attorney's fees
and legal expenses) incurred by Secured Party in the protection, defense or
enforcement of the Security Interest, including expenses incurred in any
litigation or bankruptcy or insolvency proceedings. This Agreement shall be
binding upon and inure to the benefit of Debtor and Secured Party and their
respective heirs, representatives, successors and assigns and shall take effect
when signed by Debtor and delivered to Secured Party, and Debtor waives notice
of Secured Party's acceptance hereof. This Agreement shall be governed by laws
of the state in which it is executed and, unless the context otherwise requires,
all terms used herein which are defined in Articles 1 and 9 of the Uniform
Commercial Code, as in effect in said state, shall have the meanings therein
stated. If any provision or application of this Agreement is held unlawful or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or application of this Agreement is held unlawful or
unenforceable in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given effect, and this
Agreement shall be construed as if the unlawful or unenforceable provision or
application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations. If this Agreement is signed by more than one person
as Debtor, the term "Debtor" shall refer to each of them separately and to both
or all of them jointly, all such persons shall be bound both severally and
jointly with the other(s); and the Obligations shall include all debts,
liabilities and obligations owed to Secured Party by a Debtor solely or by both
or several or all Debtors jointly or jointly and severally, and all property
described in Section 1 shall be included as part of the Collateral, whether it
is owned jointly by both or all Debtors or is owned in whole or in part by one
(or more) of them.
LINE OF CREDIT AGREEMENT
Nutriceuticals.Com Corp FIRST COMMUNITY BANK OF AMERICA
6950 Bryan Dairy Rd. P.O. Box 20559
Largo, Florida St. Petersburg, Florida
33777 33742
Loan #: 23627
Date: November 10, 1999
Credit Line Amount: $250,000.00
You have extended to me a line of credit in the amount of Two Hundred
Fifty Thousand and 00/000 ($250,000.00).
You will make loans to me from time to time until 5:00 p.m. on October
10, 2000. Although the line of credit expires on that date, I will remain
obligated to perform all my duties under this agreement as long as I owe you any
money advanced according to the terms of this agreement, as evidenced by any
note or notes I have signed to repay these amounts.
This line of credit is an agreement between you and me. It is not
intended that any third party receive any benefit from this agreement, whether
by direct payment, reliance for future payment or in any other manner. This
agreement is not a letter of credit.
1. AMOUNT: This line of credit is:
[XX} OBLIGATORY: You may not refuse to make a loan to me under this
line of credit unless one of the following occurs;
a: I have borrowed the maximum amount available to me;
b: This line of credit has expired;
c: I have defaulted on the note (or notes) which show my indebtedness
under this line of credit;
d. I have violated any term of this line of credit or any note or
other agreement entered into in connection with this line of
credit;
e. N/A
[ ] DISCRETIONARY: You may refuse to make a loan to me under this line of credit
once the aggregate outstanding advances equal or exceed $.
Subject to the obligatory or discretionary limitations above, this line of
credit is:
[XX] OPEN-END (Business or Agricultural only): I may borrow up to the
maximum amount of principal more than one time.
[ ] CLOSED-END I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of
credit agreement as set out in the promissory note I signed on October 4, 1999,
or any other note(s) I sign at a later time which represent advances under this
agreement. The note(s) set(s) out the terms relating to maturity, interest rate,
repayment and advances. If indicated on the promissory note, the advances will
be made as follows:
I hereby authorize Lender to pay advances against any loan with Lender
which I am a signer, maker, co-maker or guarantor; or deposit any advances
into my deposit account with Lender on which I am a signer, these advances
can be authorized by me or my designated representative in writing or
verbally, either in person or by phone. The minimum draw amount will be
$1,000.00 or the balance of the Line.
3. RELATED DOCUMENTS: I have signed the following documents in connection with
this line of credit and note(s) entered into in accordance with this line of
credit:
Security Agreement dated October 18, 1999;
Assignment of Savings Deposit dated November 10, 1999.
4. REMEDIES: If I am in default on the notes you may:
a. take any action as provided in the related documents:
b. without notice to me, terminate this line of credit:
By selecting any of these remedies you do not give up your right to later use
any other remedy. By deciding not to use any remedy should I default, you do
NOT waive your right to later consider the event a default, if it happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement I will pay
your reasonable attorney's fees, where permitted by law. I will also pay your
court costs and cost of collection, where permitted by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe you money
for advances made in accordance with the line of credit, I will do the
following:
a. maintain books and records of my operations relating to the need for
this line of credit;
b. permit you or any of your representatives to inspect and/or copy these
records;
c. provide to you any documentation requested by you which support the
reason for making any advance under this line of credit;
d. permit you to make any advance payable to the seller (or seller and me)
of any items being purchased with that advance;
e. provide periodic financial statements as you may reasonably request from
time to time;
f. N/A
7. NOTICES: All notices and other correspondence with me should be sent to my
address stated above. The notice or correspondence shall be effective when
deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written
agreement signed by you and me. The laws of the State of Florida will govern
this agreement. Any term of this agreement which is contrary to applicable law
will not be effective, unless the law permits you and me to agree to such a
variation.
First Community Bank of America SIGNATURES: I AGREE TO THE TERMS OF
THIS LINE OF CREDIT. I HAVE RECEIVED
A COPY ON TODAY'S DATE.
Nutriceuticals.Com Corporation
/s/ SCOTT C. BOYLE /s/ STEPHEN M. WATTERS
- ---------------------------------- --------------------------------------
Scott C. Boyle, President Stephen M. Watters, President
/s/ JUGAL K. TANEJA
--------------------------------------
Jugal K. Taneja, Secretary
<PAGE>
FUTURE ADVANCE NOTE
NUTRICEUTICALS.COM CORPORATION
6950 BRYAN DAIRY RD.
LARGO, FL 33777
BORROWER'S NAME AND ADDRESS
"I" includes each Borrower above, joint and severally.
FIRST COMMUNITY BANK OF AMERICA
6100 4TH STREET NORTH
ST. PETERSBURG, FL 33703
LENDER'S NAME AND ADDRESS
"You" means the lender, its successors and assigns.
Loan Number 23627B
-----------------------
Date NOVEMBER 10, 1999
-----------------------------
Maturity Date NOV. 17, 1999
--------------------
Loan Amount $50,000.00
----------------------
Renewal Of
-----------------------
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of FIFTY THOUSAND AND NO/100***************
Dollars $50,000.00
[X] SINGLE ADVANCE: I will receive all of this principal sum on NOVEMBER 10,
1999. No additional advances are contemplated under this note.
[ ] MULTIPLE ADVANCE: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On __________________________
I will receive the amount of $___________________ and future principal
advances are contemplated.
CONDITIONS: The conditions for future advances are AS PER THE TERMS OF THE
LINE OF CREDIT AGREEMENT OF EVEN DATE.
____________________________________________________________________________
[ ] OPEN END CREDIT: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to all
other conditions and expires on _________________________________.
[ ] CLOSED END CREDIT: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
NOVEMBER 10, 1999 at the rate of 6.500% per year until NOVEMBER 17, 1999
[ ] VARIABLE RATE: This rate may then change as stated below.
[ ] INDEX RATE: The future rate will be ____________________ the following
index rate:_________________________________________________________________
____________________________________________________________________________
[ ] NO INDEX: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[ ] FREQUENCY AND TIMING: The rate on this note may change as often as
_________________________
A change in the interest rate will take effect _________________________
[ ] LIMITATIONS: During the term of this loan, the applicable annual
interest rate will not be more than _____% or less than _______%. The rate
may not change more than ____________% each _______________________.
EFFECT OF VARIABLE RATE: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change.
[ ] The amount of the final payment will change.
[ ]_________________________________________________________________________
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[ ] on the same fixed or variable rate basis in effect before maturity (as
indicated above).
[X] at a rate equal to 18.0%
[ ] LATE CHARGE: If a payment is made more than 10 days after it is due, I agree
to pay a late charge of 5.000% OF THE LATE PAYMENT
[X] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [ ] are [X] are not included in the principal amount above:
DOC STAMPS - $175.00 LOAN FEE- $125.00
PAYMENTS: I agree to pay this note as follows:
[X] INTEREST: I agree to pay accrued interest AT MATURITY
____________________________________________________________________________
[ ] PRINCIPAL: I agree to pay the principal NOVEMBER 17, 1999
____________________________________________________________________________
[ ] INSTALLMENTS: I agree to pay this note in ____ payments. The first payment
will be in the amount of $________________ and will be due ________________.
A payment of $______________ will be due ____________________ thereafter.
The final payment of this entire unpaid balance of principal and interest
will be due_____________________________________________.
ADDITIONAL TERMS:
SECURITY: This note is separately secured by (describe separate document by type
and date); SECURITY AGREEMENT OF EVEN DATE.
(This action is for your internal use. Failure to list a separate security
document does not mean the agreement will not secure this note.)
PURPOSE: The purpose of this loan is
BUSINESS: WORKING CAPITAL
____________________________________
SIGNATURES: I AGREE TO THE TERMS OF
THIS NOTE (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's date.
<PAGE>
DEFINITIONS: As used on page 1, "[X]" means the terms that apply to this loan.
"I", "me" or "my" means each Borrower who signs this note and each other person
or legal entity (including guarantors, endorsers, and sureties) who agrees to
pay this note (together referred to as "us", "You" or "your" means the Lender
and its successors and assigns.
APPLICABLE LAW: The law of the state of Florida will govern this note. Any
term of this note which is contrary to applicable law will not be effective,
unless the law permits you and me to agree to such a variation. If any provision
of this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to time,
until paid in full. If I receive the principal in more than one advance, each
advance will start to earn interest only when I receive the advance. The
interest rate in effect on this note at any given time will apply to the entire
principal advanced at that time. Notwithstanding anything to the contrary, I do
not agree to pay and you do not intend to charge any rate of interest that is
higher than the maximum rate of interest you could charge under applicable law
for the extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest than
allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the rate
on this note will be the same rate you charge on any other loans or class of
loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purpose of interest calculation, the accrual method will determine
the number of days in a "year". If no accrual method is stated, then you may use
any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advances and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession for
collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of which
you are entitled to demand payment under the terms of this note at the time you
set off. This total includes any balance the due date for which you properly
accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor occurs
because you set off this debt against any of my accounts. I agree to hold you
harmless from any such claims arising as a result of your exercise of your right
of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required: (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I ow him through court proceedings; (5) I die, am declared
incompetant, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without
first notifying you before making such a change; (10) I fail to plant, cultivate
and harvest crops in due season; (11) any loan proceeds are used for a purpose
that will contribute to excessive erosion of highly erodible land or to the
conversion of wetlands to produce an agricultural commodity, as further
explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the "Set-off" paragraph herein.
(3) You may demand security, additional security, or additional parties to be
obligated to pay this note as a condition for not using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the an event as a default
if it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin, or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any reasonable
fee you incur with such attorney plus court costs (except where prohibited by
law). I agree that reasonable attorneys' fees shall be construed to mean 10% of
the principal sum named in this note, or such larger fee that the court may
determine to be reasonable and just. To the extent permitted by the United
States Bankruptcy Code, I also agree to pay the reasonable attorney's fees and
costs you incur to collect this debt as awarded by any court exercising
jurisdiction under the Bankruptcy Code.
WAIVER: I give up my right to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
I waive any defenses I have based on suretyship or impairment of collateral.
TO THE EXTENT PERMITTED BY LAW, I ALSO WAIVE MY RIGHT TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION ARISING FROM THIS NOTE AND ANY OTHER AGREEMENT
EXECUTED IN CONJUNCTION WITH THIS CREDIT TRANSACTION.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may sue me alone, or anyone else who is obligated
on this note, or any number of us together, to collect this note. You may do so
without any notice that it has not been paid (notice of dishonor). You may
without notice release any party to this agreement without releasing any other
party. If you give up any of your rights, with or without notice, it will not
affect my duty to pay this note. Any extension of new credit to any of us, or
renewal of this note by all or less than all of us will not release me from my
duty to pay it. (Of course, you are entitled to only one payment in
full). I agree that you may at your option extend this note or the debt
represented by this note, or any portion of the note or debt, from time to time
without limit or notice and for any term without affecting my liability for
payment of the note, I will not assign my obligation under this agreement
without your prior written approval.
CREDIT INFORMATION; I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to report
to others your credit experience with me (such as a credit reporting agency). I
agree to provide you, upon request, any financial statement or information you
may deem necessary. I warrant that the financial statements and information I
provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in writing
of any change in my address. I will give any notice to you by mailing it first
class to your address stated on page 1 of this agreement, or to any other
address that you have designated.
<TABLE>
<CAPTION>
DATE OF PRINCIPAL BORROWER'S PRINCIPAL PRINCIPAL INTEREST INTEREST INTEREST
TRANSACTION ADVANCE INITIALS PAYMENTS BALANCE RATE PAYMENTS PAID
(NOT REQUIRED) THROUGH
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ / $ $ $ % $ / /
- ---------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
RENEWAL & CONSOLIDATION NOTE
NUTRICEUTICALS.COM CORPORATION
6950 BRYAN DAIRY RD.
LARGO, FL 33777
BORROWER'S NAME AND ADDRESS
"I" includes each Borrower above, joint and severally.
FIRST COMMUNITY BANK OF AMERICA
6100 4TH STREET NORTH
ST. PETERSBURG, FL 33703
LENDER'S NAME AND ADDRESS
"You" means the lender, its successors and assigns.
Loan Number 23627
-----------------------
Date NOVEMBER 10, 1999
-----------------------------
Maturity Date OCTOBER 10, 2000
--------------------
Loan Amount $250,000.00
----------------------
Renewal Of
-----------------------
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of TWO HUNDRED FIFTY THOUSAND AND NO/100*********
Dollars $250,000.00
[ ] SINGLE ADVANCE: I will receive all of this principal sum on _______________.
No additional advances are contemplated under this note.
[X] MULTIPLE ADVANCE: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On NOV. 10, 1999 I will receive the
amount of $200,000,000 and future principal advances are contemplated.
CONDITIONS: The conditions for future advances are AS PER THE TERMS OF THE
LINE OF CREDIT AGREEMENT OF EVEN DATE.
____________________________________________________________________________
[X] OPEN END CREDIT: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to all
other conditions and expires on OCTOBER 10, 2000.
[ ] CLOSED END CREDIT: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
NOVEMBER 10, 1999 at the rate of 6.500% per year until OCTOBER 10, 2000
[ ] VARIABLE RATE: This rate may then change as stated below.
[ ] INDEX RATE: The future rate will be ____________________ the following
index rate:_________________________________________________________________
____________________________________________________________________________
[ ] NO INDEX: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
[ ] FREQUENCY AND TIMING: The rate on this note may change as often as
_________________________
A change in the interest rate will take effect _________________________
[ ] LIMITATIONS: During the term of this loan, the applicable annual
interest rate will not be more than _____% or less than _______%. The rate
may not change more than ____________% each _______________________.
EFFECT OF VARIABLE RATE: A change in the interest rate will have the
following effect on the payments:
[ ] The amount of each scheduled payment will change.
[ ] The amount of the final payment will change.
[ ]_________________________________________________________________________
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
[ ] on the same fixed or variable rate basis in effect before maturity (as
indicated above).
[X] at a rate equal to 18.0%
[ ] LATE CHARGE: If a payment is made more than 10 days after it is due, I agree
to pay a late charge of 5.000% OF THE LATE PAYMENT
[X] ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which [ ] are [X] are not included in the principal amount above:
DOC STAMPS - $175.00 LOAN FEE- $125.00
PAYMENTS: I agree to pay this note as follows:
[X] INTEREST: I agree to pay accrued interest ON THE 10TH DAY OF EACH MONTH
BEGINNING DECEMBER 10, 1999
____________________________________________________________________________
[X] PRINCIPAL: I agree to pay the principal OCTOBER 10, 2000
____________________________________________________________________________
[ ] INSTALLMENTS: I agree to pay this note in ____ payments. The first payment
will be in the amount of $________________ and will be due ________________.
A payment of $______________ will be due ____________________ thereafter.
The final payment of this entire unpaid balance of principal and interest
will be due_____________________________________________.
ADDITIONAL TERMS:
SECURITY: This note is separately secured by (describe separate document by type
and date); SECURITY AGREEMENT DATED OCTOBER 18, 1999.
(This action is for your internal use. Failure to list a separate security
document does not mean the agreement will not secure this note.)
URPOSE: The purpose of this loan is
BUSINESS: WORKING CAPITAL
____________________________________
SIGNATURES: I AGREE TO THE TERMS OF
THIS NOTE (INCLUDING THOSE ON PAGE 2).
I have received a copy on today's date.
<PAGE>
DEFINITIONS: As used on page 1, "[X]" means the terms that apply to this loan.
"I", "me" or "my" means each Borrower who signs this note and each other person
or legal entity (including guarantors, endorsers, and sureties) who agrees to
pay this note (together referred to as "us", "You" or "your" means the Lender
and its successors and assigns.
APPLICABLE LAW: The law of the state of Florida will govern this note. Any
term of this note which is contrary to applicable law will not be effective,
unless the law permits you and me to agree to such a variation. If any provision
of this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement. No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.
PAYMENTS: Each payment I make on this note will first reduce the amount I owe
you for charges which are neither interest nor principal. The remainder of each
payment will then reduce accrued unpaid interest, and then unpaid principal. If
you and I agree to different application of payments, we will describe our
agreement on this note. I may prepay a part of, or the entire balance of this
loan without penalty, unless we specify to the contrary on this note. Any
partial prepayment will not excuse or reduce any later scheduled payment until
this note is paid in full (unless, when I make the prepayment, you and I agree
in writing to the contrary).
INTEREST: Interest accrues on the principal remaining unpaid from time to time,
until paid in full. If I receive the principal in more than one advance, each
advance will start to earn interest only when I receive the advance. The
interest rate in effect on this note at any given time will apply to the entire
principal advanced at that time. Notwithstanding anything to the contrary, I do
not agree to pay and you do not intend to charge any rate of interest that is
higher than the maximum rate of interest you could charge under applicable law
for the extension of credit that is agreed to here (either before or after
maturity). If any notice of interest accrual is sent and is in error, we
mutually agree to correct it, and if you actually collect more interest than
allowed by law and this agreement, you agree to refund it to me.
INDEX RATE: The index will serve only as a device for setting the rate on this
note. You do not guarantee by selecting this index, or the margin, that the rate
on this note will be the same rate you charge on any other loans or class of
loans to me or other borrowers.
ACCRUAL METHOD: The amount of interest that I will pay on this loan will be
calculated using the interest rate and accrual method stated on page 1 of this
note. For the purpose of interest calculation, the accrual method will determine
the number of days in a "year". If no accrual method is stated, then you may use
any reasonable accrual method for calculating interest.
POST MATURITY RATE: For purposes of deciding when the "Post Maturity Rate"
(shown on page 1) applies, the term "maturity" means the date of the last
scheduled payment indicated on page 1 of this note or the date you accelerate
payment on the note, whichever is earlier.
SINGLE ADVANCE LOANS: If this is a single advance loan, you and I expect that
you will make only one advance of principal. However, you may add other amounts
to the principal if you make any payments described in the "PAYMENTS BY LENDER"
paragraph below.
MULTIPLE ADVANCE LOANS: If this is a multiple advance loan, you and I expect
that you will make more than one advance of principal. If this is closed end
credit, repaying a part of the principal will not entitle me to additional
credit.
PAYMENTS BY LENDER: If you are authorized to pay, on my behalf, charges I am
obligated to pay (such as property insurance premiums), then you may treat those
payments made by you as advances and add them to the unpaid principal under this
note, or you may demand immediate payment of the charges.
SET-OFF: I agree that you may set off any amount due and payable under this
note against any right I have to receive money from you.
"Right to receive money from you" means:
(1) any deposit account balance I have with you;
(2) any money owed to me on an item presented to you or in your possession for
collection or exchange; and
(3) any repurchase agreement or other nondeposit obligation.
"Any amount due and payable under this note" means the total amount of which
you are entitled to demand payment under the terms of this note at the time you
set off. This total includes any balance the due date for which you properly
accelerate under this note.
If my right to receive money from you is also owned by someone who has not
agreed to pay this note, your right of set-off will apply to my interest in the
obligation and to any other amounts I could withdraw on my sole request or
endorsement. Your right of set-off does not apply to an account or other
obligation where my rights are only as a representative. It also does not apply
to any Individual Retirement Account or other tax-deferred retirement account.
You will not be liable for the dishonor of any check when the dishonor occurs
because you set off this debt against any of my accounts. I agree to hold you
harmless from any such claims arising as a result of your exercise of your right
of set-off.
REAL ESTATE OR RESIDENCE SECURITY: If this note is secured by real estate or a
residence that is personal property, the existence of a default and your
remedies for such a default will be determined by applicable law, by the terms
of any separate instrument creating the security interest and, to the extent not
prohibited by law and not contrary to the terms of the separate security
instrument, by the "Default" and "Remedies" paragraphs herein.
DEFAULT: I will be in default if any one or more of the following occur: (1) I
fail to make a payment on time or in the amount due; (2) I fail to keep the
property insured, if required: (3) I fail to pay, or keep any promise, on any
debt or agreement I have with you; (4) any other creditor of mine attempts to
collect any debt I ow him through court proceedings; (5) I die, am declared
incompetant, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become due); (6) I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7) I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without
first notifying you before making such a change; (10) I fail to plant, cultivate
and harvest crops in due season; (11) any loan proceeds are used for a purpose
that will contribute to excessive erosion of highly erodible land or to the
conversion of wetlands to produce an agricultural commodity, as further
explained in 7 C.F.R. Part 1940, Subpart G, Exhibit M.
REMEDIES: If I am in default on this note you have, but are not limited to, the
following remedies:
(1) You may demand immediate payment of all I owe you under this note
(principal, accrued unpaid interest and other accrued charges).
(2) You may set off this debt against any right I have to the payment of
money from you, subject to the terms of the "Set-off" paragraph herein.
(3) You may demand security, additional security, or additional parties to be
obligated to pay this note as a condition for not using any other remedy.
(4) You may refuse to make advances to me or allow purchases on credit by me.
(5) You may use any remedy you have under state or federal law.
By selecting any one or more of these remedies you do not give up your right to
later use any other remedy. By waiving your right to declare an event to be a
default, you do not waive your right to later consider the an event as a default
if it continues or happens again.
COLLECTION COSTS AND ATTORNEY'S FEES: I agree to pay all costs of collection,
replevin, or any other or similar type of cost if I am in default. In addition,
if you hire an attorney to collect this note, I also agree to pay any reasonable
fee you incur with such attorney plus court costs (except where prohibited by
law). I agree that reasonable attorneys' fees shall be construed to mean 10% of
the principal sum named in this note, or such larger fee that the court may
determine to be reasonable and just. To the extent permitted by the United
States Bankruptcy Code, I also agree to pay the reasonable attorney's fees and
costs you incur to collect this debt as awarded by any court exercising
jurisdiction under the Bankruptcy Code.
WAIVER: I give up my right to require you to do certain things. I will not
require you to:
(1) demand payment of amounts due (presentment);
(2) obtain official certification of nonpayment (protest); or
(3) give notice that amounts due have not been paid (notice of dishonor).
I waive any defenses I have based on suretyship or impairment of collateral.
TO THE EXTENT PERMITTED BY LAW, I ALSO WAIVE MY RIGHT TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION ARISING FROM THIS NOTE AND ANY OTHER AGREEMENT
EXECUTED IN CONJUNCTION WITH THIS CREDIT TRANSACTION.
OBLIGATIONS INDEPENDENT: I understand that I must pay this note even if someone
else has also agreed to pay it (by, for example, signing this form or a separate
guarantee or endorsement). You may sue me alone, or anyone else who is obligated
on this note, or any number of us together, to collect this note. You may do so
without any notice that it has not been paid (notice of dishonor). You may
without notice release any party to this agreement without releasing any other
party. If you give up any of your rights, with or without notice, it will not
affect my duty to pay this note. Any extension of new credit to any of us, or
renewal of this note by all or less than all of us will not release me from my
duty to pay it. (Of course, you are entitled to only one payment in
full). I agree that you may at your option extend this note or the debt
represented by this note, or any portion of the note or debt, from time to time
without limit or notice and for any term without affecting my liability for
payment of the note, I will not assign my obligation under this agreement
without your prior written approval.
CREDIT INFORMATION; I agree and authorize you to obtain credit information about
me from time to time (for example, by requesting a credit report) and to report
to others your credit experience with me (such as a credit reporting agency). I
agree to provide you, upon request, any financial statement or information you
may deem necessary. I warrant that the financial statements and information I
provide to you are or will be accurate, correct and complete.
NOTICE: Unless otherwise required by law, any notice to me shall be given by
delivering it or by mailing it by first class mail addressed to me at my last
known address. My current address is on page 1. I agree to inform you in writing
of any change in my address. I will give any notice to you by mailing it first
class to your address stated on page 1 of this agreement, or to any other
address that you have designated.
<TABLE>
<CAPTION>
DATE OF PRINCIPAL BORROWER'S PRINCIPAL PRINCIPAL INTEREST INTEREST INTEREST
TRANSACTION ADVANCE INITIALS PAYMENTS BALANCE RATE PAYMENTS PAID
(NOT REQUIRED) THROUGH
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
/ / $ $ $ % $ / /
- ---------------------------------------------------------------------------------------------------------------------
/ / $ $ $ % $ / /
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the financial
statements and is qualified in its entirety by reference to such
financialstatements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 4,633
<SECURITIES> 0
<RECEIVABLES> 10,850
<ALLOWANCES> 0
<INVENTORY> 23,292
<CURRENT-ASSETS> 241,872
<PP&E> 50,000
<DEPRECIATION> (8,704)
<TOTAL-ASSETS> 322,925
<CURRENT-LIABILITIES> 494,506
<BONDS> 0
0
0
<COMMON> 2,696
<OTHER-SE> (174,277)
<TOTAL-LIABILITY-AND-EQUITY> 322,925
<SALES> 16,799
<TOTAL-REVENUES> 16,799
<CGS> 11,804
<TOTAL-COSTS> 11,804
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,827
<INCOME-PRETAX> (167,059)
<INCOME-TAX> 0
<INCOME-CONTINUING> (167,059)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (167,059)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
