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Exhibit 10.63FT
F. KEITH WITHYCOMBE BUSINESS LOAN AGREEMENT
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This Agreement dated as of May 21, 1999 is between F. Keith Withycombe, a
married man, (the "Lender") and Futech Interactive Products, Inc. (the
"BORROWER").
1. AMOUNT AND TERMS.
1.1 LINE OF CREDIT AMOUNT. During the availability period described below, the
Lender will provide a line of credit to the Borrower. The amount of the line of
credit (the "COMMITMENT") is Two Million and No/100 Dollars ($2,000,000.00).
This is a revolving line of credit. During the availability period, the Borrower
may repay principal amounts and reborrow them.
The Borrower agrees not to permit the outstanding principal balance of the line
of credit to exceed the Commitment.
1.2 AVAILABILITY. The line of credit is available between the date of this
Agreement and December 1, 1999 (the "EXPIRATION DATE") unless the Borrower is in
default.
1.3 INTEREST RATE.
The interest rate is the Reference Rate plus 1.00 percentage point(s).
The Reference Rate is the rate of interest publicly announced from time to time
by the Bank of America National Trust and Savings Association ("BANK") in San
Francisco, California, as its Reference Rate. The Reference Rate is set by the
Bank based on various factors, including the Bank's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans. The Bank may price loans to its customers at, above or
below the Reference Rate. Any change in the Reference Rate will take effect at
the opening of business on the day specified in the public announcement of a
change in the Bank's Reference Rate.
1.4 REPAYMENT.
(a) The Borrower will pay interest on July 1, 1999 and on the first day of each
month thereafter until payment in full of any principal outstanding under this
line of credit; and (b) The Borrower will repay in full all principal and any
unpaid interest or other charges outstanding under this line of credit no later
than the Expiration Date.
1.5 LETTERS OF CREDIT. This line of credit may not be used for financing standby
letters or commercial letters of credit.
1.6 SECURED LINE OF CREDIT. This line of credit is intended to be a secured and
perfected line of credit, subordinate only to the $7,000,000 loan to Borrower
from Bank of America National Trust and Savings Association. The security for
this line of credit will be comprised of a security interest in all of
Borrower's assets. Borrower agrees to take all actions necessary to document and
perfect this subordinate security interest of Lender.
2. FEES AND EXPENSES.
2.1 LOAN FEE. The Borrower does not have to pay a fee upon execution of this
Agreement.
2.2 REIMBURSEMENT COST. The Borrower agrees to reimburse the Lender for any
expenses it incurs in the preparation of this Agreement and any agreement or
instrument required by this Agreement. Expenses include, but are not limited to,
reasonable attorneys' fees.
3. DISBURSEMENTS, PAYMENTS AND COSTS
3.1 TELEPHONE AND TELEFAX AUTHORIZATION. (a) The Lender may honor telephone or
telefax instructions for advances or repayments given by any one of the
individual signer(s) of this Agreement or a person or persons authorized in
writing by any one of the signer(s) of this Agreement; (b) Advances will be
deposited in and repayments will be withdrawn from the Borrowers account number
with Bank of America National Trust and Savings Association, or other accounts
as designated in writing by the Borrower; and (c) The Borrower indemnifies and
excuses the Lender (including its officers, employees, and agents) from all
liability, loss, and costs in connection with any act resulting
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from telephone instructions it reasonably believes are made by any individual
authorized by the Borrower to give such instructions. This indemnity and excuse
will survive this Agreement's termination.
3.2. INTEREST CALCULATION. All interest and fees, if any, will be computed on
the basis of a 360-day year and the actual number of days elapsed. This results
in more interest or a higher fee than if a 365-day year is used.
3.3. INTEREST ON LATE PAYMENTS. At the Lender's sole option in each instance,
any amount not paid when due under this Agreement (including interest) will bear
interest from the due date at the Reference Rate plus 5.00 percentage points.
This may result in compounding of interest.
3.4 DEFAULT RATE. Upon the occurrence and during the continuation of any
default under this Agreement, advances under this Agreement will at the option
of the Lender bear interest at a rate per annum which is 5.00 percentage points
higher than the rate of interest otherwise provided under this Agreement. This
will not constitute a waiver of any default.
4. CONDITIONS The Lender must receive the following items, in form and
content acceptable to the Lender, before it is required to extend any credit to
the Borrower under this Agreement.
4.1 AUTHORIZATIONS. Evidence that the execution, delivery and performance by
the Borrower (and any guarantors) of this Agreement and any instrument or
agreement required under this Agreement have been duly authorized.
5. REPRESENTATIONS AND WARRANTIES When the Borrower signs this Agreement, and
until the Lender is repaid in full, the Borrower makes the following
representations and warranties. Each request for an extension of credit
constitutes a renewed representation: (a) The Borrower is a corporation duly
formed and existing under the laws of the state where organized; (b) This
Agreement, and any instrument or agreement required hereunder, are within the
Borrower's powers, have been duly authorized, and do not conflict with any of
its organizational papers; (c) This Agreement, and each other agreement or
document executed and delivered to the Lender in connection with this Agreement,
is a legal, valid and binding agreement of the Borrower, enforceable against the
Borrower in accordance with its terms, and any instrument or agreement required
hereunder, when executed and delivered, will be similarly legal, valid, binding
and enforceable; (d) In each state in which the Borrower does business, it is
properly licensed, in good standing, and where required, in compliance with
fictitious name statutes; (e) This Agreement does not conflict with any law,
agreement, or obligation by which the Borrower is bound; (f) All financial and
other information that has been or will be supplied to the Lender is: (i)
sufficiently complete to give the Lender accurate knowledge of the Borrower's
(and any guarantor's) financial condition; (ii) in form and content required by
the Lender; (iii) in compliance with all government regulations that apply; (g)
There is no lawsuit, tax claim or other dispute pending or threatened against
the Borrower, which, if lost, would impair the Borrower's financial condition or
ability to repay the loan, except as have been disclosed in writing to the
Lender prior to the date of this Agreement; (h) The Borrower possesses all
permits, memberships, franchises, contracts and licenses required and all
trademark rights, trade name rights, patent rights and fictitious name rights
necessary to enable it to conduct the business in which it is now engaged; (i)
There is no event which is, or with notice or lapse of time or both would be, a
default under this Agreement; (j) The Borrower's place of business (or, if the
Borrower has more than one place of business, its chief executive office) is
located at the address listed under the Borrower's signature on this Agreement;
and (k) On the basis of a comprehensive review and assessment of Borrowers
systems and equipment and inquiry made of Borrower's material suppliers, vendors
and customers Borrower management is of the view that the "YEAR 2000 PROBLEM"
(that is, the inability of computers, as well as embedded microchips in
non-computing devices, to perform properly date-sensitive functions with respect
to certain dates prior to and after December 31, 1999), including costs of
remediation, will not result in a material adverse change in the operations,
business properties, condition (financial or otherwise) of Borrower. Borrower
has developed feasible contingency plans to adequately ensure uninterrupted and
unimpaired business operation in the event of failure of its own or a third
party's systems or equipment due to the Year 2000 problem, including those of
vendors, customers, and suppliers, as well as a general failure of or
interruption in its communications and delivery infrastructure.
6. COVENANTS The Borrower agrees, so long as credit is available under this
Agreement and until the Lender is repaid in full:
6.1 USE OF PROCEEDS. To use the proceeds of the credit only for working
capital financing and the issuance of standby letters of credit.
6.2 FINANCIAL INFORMATION. To provide the following financial information and
statements and additional information as requested by the Lender from time to
time:
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(a) Within 90 days of the Borrowers fiscal year end, the Borrowers annual
financial statements. These financial statements must be audited by a
Certified Public Accountant ("CPA") acceptable to the Lender.
(b) Each guarantors annual budgeted statement of sources and uses of cash flows
within 90 days of each calendar year end. These financial statements may be
guarantor prepared.
(c) Each guarantor's annual financial statements in form satisfactory to the
Lender within 90 days of each calendar year end. These financial statements
may be guarantor prepared.
(d) Copies of each guarantor's federal income tax return (with all forms K-1
attached) within 30 days of filing, together with a statement of any
contributions made by the guarantor to any subchapter S corporation or
trust, and copies of any extensions of the filing date.
(e) Within 60 days of each quarter end, the Borrower will provide to the Lender
copies of statements from depository institutions or brokerage firms, or
other evidence acceptable to the Lender of the Borrowers liquid assets.
6.3 LIQUIDITY. Borrower and Vincent W. Goett and Melissa Turner Goett will each
maintain liquid assets equal to at least Four Million and No/100 Dollars
($4,000,000.00). "LIQUID ASSETS" means the following assets of the Guarantor's:
(a) cash and certificates of deposit; (b) U.S. treasury bills and other
obligations of the federal government; (c) readily marketable securities
(including commercial paper, but excluding restricted stock and stock subject
to the provisions of Rule 144 of the Securities and Exchange Commission); and
(d) for Vincent W. Goett and Melissa Turner Goett, Futech stock, options and
notes.
6.4 OTHER DEBTS. Not to have outstanding or incur any direct or contingent
debts or lease obligations (other than those to Bank of America National Trust
and Savings Association), or become liable for the debts of others without the
Lender's written consent. This does not prohibit: (a) Acquiring goods,
supplies, or merchandise on normal trade credit; (b) Endorsing negotiable
instruments received in the usual course of business; (c) Obtaining surety
bonds in the usual course of business; (d) Debts and lines of credit in
existence on the date of this Agreement disclosed in writing to the Lender; or
(e) Vincent W. Goett creating, incurring, assuming, or otherwise becoming
liable in any manner for any indebtedness (as surety or guarantor for the debt
for another, or otherwise) other than to Lender, in excess of: Five Million and
No/100 Dollars ($5,000,000.00) in aggregate, excluding permanent secured real
estate property.
6.5 OTHER LIENS. Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, except:
(a) Deeds of trust and security agreements in favor of the Lender; (b) Liens
for taxes not yet due; (c) Liens outstanding on the date of this Agreement
disclosed in writing to the Lender; (d) Secure obligations in a total principal
amount not exceeding Ten Million and No/100 Dollars ($10,000,000.00); and (e)
Additional liens for Vincent W. Goett, which together with the debts permitted
under the preceding paragraph 6.4 (e), secure obligations in a total principal
amount not exceeding Five Million and No/100 Dollars ($5,000,000.00).
6.6 NOTICES TO LENDER. To promptly notify the Lender in writing of: (a) any
lawsuit over Fifty Thousand and No/100 Dollars ($50,000.00) against the
Borrower (or any guarantor); (b) any substantial dispute between the Borrower
(or any guarantor) and any government authority; (c) any failure to comply with
this Agreement; (d) any material adverse change in the Borrower's (or any
guarantor's) financial condition or operations; and (e) any change in the
Borrower's name, legal structure, place of business, or chief executive office
if the Borrower has more than one place of business.
6.7 CHANGE OF OWNERSHIP. Borrower not to cause, permit, or suffer any change,
direct or indirect, in the Borrower's capital ownership or in the management
and control of Borrower.
6.8 BOOKS AND RECORDS. To maintain adequate books and records.
6.9 AUDITS. To allow the Lender and its agents to inspect the Borrower's
properties and examine, audit, and make copies of books and records at any
reasonable time. If any of the Borrower's properties, books or records are in
the possession of a third party, the Borrower authorizes that third party to
permit the Lender or its agents to have access to perform inspections or audits
and to respond to the Lender's requests for information concerning properties,
books and records.
6.10 COMPLIANCE WITH LAWS. To comply with the laws, (including any fictitious
name statute), regulations, and orders of any government body with authority
over the Borrower's business.
6.11 PRESERVATION OF RIGHTS. To maintain and preserve all rights, privileges,
and franchises the Borrower now has.
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6.12 MAINTENANCE OF PROPERTIES. To make any repairs, renewals, or
replacements to keep the Borrower's properties in good working condition.
6.13 COOPERATION. To take any action requested by the Lender to carry out
the intent of this Agreement.
6.14 INSURANCE. To maintain insurance as is usual for the business it is in.
6.15 ADDITIONAL NEGATIVE COVENANTS (BORROWER AND GUARANTORS). Not to,
without the Lender's written consent: (a) engage in any business activities
substantially different from the Borrower's present business; (b) liquidate or
dissolve the Borrowers business; (c) enter into any consolidation, merger,
pool, joint venture, syndicate, or other combination; (d) acquire or purchase a
business or its assets; (e) sell or otherwise dispose of any assets for less
than fair market value or enter into any sale and leaseback agreement covering
any of its fixed or capital assets; (f) transfer any assets to any other
company owned in whole or part by Borrower; (g) change management or control of
Borrower; or (h) obtain, guarantee, or make any intercompany debt.
6.16 SUBORDINATION OF DEBT. All loans made to Borrower by anyone (including
loans made by shareholders or warrant or stock option holders or loans made by
affiliated or controlled companies) other than Bank of America National Trust
and Savings Association are expressly made subordinate to the Commitment and
line of credit described above.
7. DEFAULT If any of the following events occur, the Lender may do one or
more of the following: declare the Borrower in default, stop making any
additional credit available to the Borrower, and require the Borrower to repay
its entire debt immediately and without prior notice. If an event of default
occurs under the paragraph entitled "BANKRUPTCY" below with respect to the
Borrower, the entire debt outstanding under this Agreement will automatically
be due immediately.
7.1 FAILURE TO PAY. The Borrower fails to make a payment under this
Agreement when due.
7.2 FALSE INFORMATION. The Borrower (or any guarantor) has given the
Lender false or misleading information or representations.
7.3 DEATH. The Borrower (or any guarantor) dies; if the Borrower is a
corporation, any principal officer or majority stockholder dies.
7.4 BANKRUPTCY. The Borrower (or any guarantor or general partner of the
Borrower) files a bankruptcy petition, a bankruptcy petition is filed against
the Borrower (or any guarantor or general partner of the Borrower), or the
Borrower (or any guarantor or general partner of the Borrower) makes a general
assignment for the benefit of creditors.
7.5 RECEIVERS. A receiver or similar official is appointed for the
Borrowers (or any guarantor's) business, or the business is terminated.
7.6 GOVERNMENT ACTION. Any government authority takes action that the
Lender believes materially adversely affects the Borrower's (or any guarantors)
financial condition or ability to repay.
7.7 MATERIAL ADVERSE CHANGE. A material adverse change occurs in the
Borrower's (or any guarantor's) financial condition, properties or prospects,
or ability to repay the extensions of credit under this Agreement.
7.8 CROSS-DEFAULT. Any default occurs under any agreement in connection
with any credit the Borrower (or any guarantor) has obtained from anyone else
or which the Borrower (or any guarantor) has guaranteed.
7.9 DEFAULT UNDER RELATED DOCUMENTS. Any guaranty, subordination
agreement, security agreement, deed of trust, or other document required by
this Agreement is violated or no longer in effect.
7.10 OTHER LENDER AGREEMENTS. The Borrower (or any guarantor) fails to meet
the conditions of, or fails to perform any obligation under any other agreement
the Borrower (or guarantor) has with the Lender or any affiliate of the Lender.
7.11 OTHER BREACH UNDER AGREEMENT. The Borrower fails to meet the
conditions of, or fails to perform any obligation under, any term of this
Agreement not specifically referred to in this Article.
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8. ENFORCING THIS AGREEMENT; MISCELLANEOUS
8.1 GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Lender and all financial covenants will be made
under generally accepted accounting principles, consistently applied.
8.2 ARIZONA LAW. This Agreement is governed by Arizona law.
8.3 SUCCESSORS AND ASSIGNS. This Agreement is binding on the Borrower's and
the Lender's successors and assignees. The Borrower agrees that it may not
assign this Agreement without the Lender's prior consent.
8.4 ARBITRATION. (a) Unless expressly prohibited by law, any controversy or
claim between or among the parties, including but not limited to those arising
out of or relating to this Agreement or any agreements or instruments relating
hereto or delivered in connection herewith and any claim based on or arising
from an alleged tort, will at the request of any party be determined by
arbitration. The arbitration will be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of the American
Arbitration Association ("AAA"). The arbitrator(s) will give effect to statutes
of limitation in determining any claim. Any controversy concerning whether an
issue is arbitrator(s) will be determined by the arbitrator(s). Judgment upon
the arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy will not constitute a waiver of the right of any
party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief; and
(b) No provision of this paragraph will limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, to foreclose against
or sell any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction before,
after, or during the pendency of any arbitration or other proceeding. The
exercise of a remedy does not waive the right of either party to resort to
arbitration. At the Lender's option, sale of assets under the Uniform
Commercial Code may be accomplished without arbitration as permitted under the
relevant statutes. Notwithstanding anything to the contrary in this Agreement,
no claim or controversy between Borrower and Lender will be subject to
arbitration if any party to the action is not subject to arbitration or if the
maintaining the arbitration action would or could lead to inconsistent results
under similar situations (such as, for example, the case of default by
Borrower).
8.5 SEVERABILITY; WAIVERS. If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Lender retains all rights, even
if it makes a loan after default. If the Lender waives a default, it may
enforce a later default. Any consent or waiver under this Agreement must be in
writing.
8.6 ADMINISTRATION COSTS. The Borrower will pay the Lender for all reasonable
costs incurred by the Lender in connection with administering this Agreement.
8.7 ATTORNEYS' FEES. The Borrower will reimburse the Lender for any reasonable
costs and attorneys' fees incurred by the Lender in connection with the
enforcement or preservation of any rights or remedies under this Agreement and
any other documents executed in connection with this Agreement, and including
any amendment, waiver, "workout" or restructuring under this Agreement. In the
event of a lawsuit or arbitration proceeding, the prevailing party is entitled
to recover costs and reasonable attorneys' fees incurred in connection with the
lawsuit or arbitration proceeding, as determined by the court or arbitrator. As
used in this paragraph, "attorneys' fees" includes the allocated costs of
in-house counsel.
8.8 ONE AGREEMENT. This Agreement and any related security or other agreements
required by this Agreement, collectively: (a) represent the sum of the
understandings and agreements between the Lender and the Borrower concerning
this credit; (b) replace any prior oral or written agreements between the
Lender and the Borrower concerning this credit; and (c) are intended by the
Lender and the Borrower as the final, complete and exclusive statement of the
terms agreed to by them. In the event of any conflict between this Agreement
and any other agreements required by this Agreement, this Agreement will
prevail.
8.9 USURY LAWS. This paragraph covers the transactions described in this
Agreement and any other agreements with the Lender or its affiliates executed
in connection with this Agreement, to the extent they are subject to the
Arizona usury laws (the "Transactions"). The Borrower understands and believes
that the Transactions comply with the Arizona usury laws. However, if any
interest or other charges paid or payable in connection with the Transactions
are ever determined to exceed the maximum amount permitted by law, the Borrower
agrees that:
(a) the amount of interest or other charges payable by the Borrower pursuant
to the Transactions will be reduced to the maximum amount permitted by
law; and
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(b) any excess amount previously collected from the Borrower in connection with
the Transactions which exceeded the maximum amount permitted by law will be
credited against the then outstanding principal balance. If the outstanding
principal balance has been repaid in full, the excess amount paid will be
refunded to the Borrower.
All fees, charges, goods, things in action or any other sums or things of value,
other than interest at the interest rate described in this Agreement, paid or
payable by the Borrower (collectively the "Additional Sums"), that may be deemed
to be interest with respect to the Transactions, will, for the purpose of any
laws of the State of Arizona that may limit the maximum amount of interest to be
charged with respect to the Transactions, be payable by Borrower as, and will be
deemed to be, additional interest. For such purposes only, the agreed upon and
"contracted for rate of interest" of the Transactions will be deemed to be
increased by the rate of interest resulting from the Additional Sums.
This Agreement is executed as of the date stated at the top of the first page.
"Lender" "Borrower"
Futech Interactive Products, Inc.
/s/ F. Keith Withycombe /s/
__________________________________ ________________________________
By: F. Keith Withycombe By: Vincent W. Goett, President
Address where notices to Lender Address where notices to Borrower
are to be sent: are to be sent:
6237 North 59th Place 2999 North 44th Street, Suite #225
Paradise Valley, AZ 85253 Phoenix, Arizona 85018
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(b) any excess amount previously collected from the Borrower in connection
with the Transactions which exceeded the maximum amount permitted by
law will be credited against the then outstanding principal balance. If
the outstanding principal balance has been repaid in full, the excess
amount paid will be refunded to the Borrower.
All fees, charges, goods, things in action or any other sums of things of
value, other than interest at the interest rate described in this Agreement,
paid or payable by the Borrower (collectively the "Additional Sums"), that
may be deemed to be interest with respect to the Transactions, will, for the
purpose of any laws of the State of Arizona that may limit the maximum amount
of interest to be charged with respect to the Transactions, be payable by
Borrower as, and will be deemed to be, additional interest. For such purposes
only, the agreed upon and "contracted for rate of interest" of the Transactions
will be deemed to be increased by the rate of interest resulting from the
Additional Sums.
This Agreement is executed as of the date stated at the top of the first page.
"Lender" "Borrower"
Futech Interactive Products, Inc.
/s/ Vincent W. Goett
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By: F. Keith Withycombe By: Vincent W. Goett, President
Address where notices to Lender Address where notices to Borrower
are to be sent: are to be sent:
6237 North 59th Place 2888 North 44th Street, Suite #225
Paradise Valley, AZ 85253 Phoenix, Arizona 85018
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FIRST AMENDMENT
TO
SUBORDINATION, PRIORITY AND SECURITY AGREEMENT
THIS AMENDMENT is made as of May 21, 1999 ("Amendment Date"), by and
between Futech Interactive Products, Inc., an Arizona corporation ("Futech"),
Vincent W. Goett ("Goett") and F. Keith Withycombe ("Withycombe").
RECITALS:
A. Futech, Goett and Withycombe entered into that certain Subordination,
Priority and Security Agreement, dated December 3, 1998 (the "Agreement").
Capitalized terms used in this Amendment shall have the same meanings given
those terms in the Agreement.
B. Withycombe has loaned (the "Loan") to Futech the sum of
$2,000,000.00, as evidenced by that certain Promissory Note of even date
herewith (the "Note") and Business Loan Agreement of even date herewith ("Loan
Agreement").
C. In consideration for the Loan, Futech has agreed to issue additional
warrants to Withycombe.
D. Rosepink facilitated the additional loan, and Futech has agreed to
issue additional warrants to Rosepink in consideration for his services.
E. The parties desire to amend the Agreement on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereto agree as follows:
TERMS:
Section 2 of the Agreement is deleted in its entirety and replaced with
the following:
1. Priority. Notwithstanding any other provision of this Agreement, or
any other document to which the parties hereto are bound, the parties agree
that the following priority shall apply to the security interest described
below encumbering Futech's assets, as of the date of this Agreement and at all
times thereafter;
(a) The first priority shall be the lien of Bank of America National
Trust and Savings Association.
(b) The second priority shall be the lien of Withycombe evidenced by
the Note.
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(c) The third priority shall be the liens of Guarantors described in
the Agreement.
Proceeds to the Guarantors shall be paid to and shared between the
Guarantors in proportion to the amounts paid by the Guarantors on the
guaranteed debt. For example, if Goett pays $200,000.00 on the Guaranty and
Withycombe pays $100,000.00 on the Guaranty, then amounts collected by
Guarantors in reimbursement of obligations paid under the Guaranty shall be
for the benefit of Goett and Withycombe 2/3 and 1/3, respectively, until
the full $300,000.00 is repaid to Guarantors.
(d) The fourth priority shall be for other security interests of
Goett against Futech's assets existing as of the date of this Agreement.
Each party to this Agreement hereby unconditionally subordinates said
party's lien to the other liens identified above as being prior to said
lien, to the extent necessary to accomplish the priority of liens as
described above. This being the case, Futech and Goett agree to take all
actions necessary to perfect the security interest of Withycombe in all
jurisdictions where the assets may be used or located or where perfection
is necessary, subordinate only to the security interest of Bank of America
National Trust and Savings Association.
2. Effective immediately and automatically upon funding by Withycombe of
the Loan, Futech shall be obligated to issue to Withycombe, as soon as is
practicable, warrants in substantially the same form as Exhibit "A" attached to
the Agreement, for Withycombe to acquire 9,000,000 shares of non-assessable
common stock of Futech at a price of $.05 per share. The common stock acquired
by Withycombe under this provision shall contain all of the rights and
restrictions applicable to the common stock of Futech. Futech makes and has made
no representation or warranty as to the value of Futech's stock, such value
being Withycombe's risk.
3. By December 1, 1999, Goett agrees to obtain a release of Withycombe of
all of Withycombe's obligations under the Guaranty. Withycombe must, at or
prior to the obtaining of such release, exercise all of Withycombe's warrants to
acquire Futech stock issued pursuant to the Agreement (21,000,000 shares) and
this Amendment (9,000,000 shares) (30,000,000 shares in total). At the time such
release is obtained, Withycombe shall transfer to Goett all of Withycombe's
collateral interests securing the Guaranty.
4. As consideration for Rosepink facilitating the Loan, effective
immediately and automatically at the funding of the Loan, Futech shall be
obligated to issue to Rosepink, as soon as is practicable, warrants in the form
of Exhibit "A" attached to the Agreement, for Rosepink to acquire 2,000,000
shares of common stock of Futech at a price of $.05 per share. The common stock
acquired by Rosepink under this provision shall contain all of the rights and
restrictions applicable to the common stock of Futech. Futech makes and has made
no representation or warranty as to the value of Futech's stock, such value
being Rosepink's risk.
5. Effective immediately and automatically at the funding of the Loan,
Futech shall be obligated to issue to Goett, as soon as is practicable, warrants
in the form of Exhibit "A" attached to the Agreement, for Goett to acquire
5,000,000 shares of common stock of Futech at a
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price of $.05 per share. The common stock acquired by Goett under this
provision shall contain all of the rights and restrictions applicable to the
common stock of Futech. Futech makes and has made no representation or warranty
as to the value of Futech's stock, such value being Goett's risk.
6. Withycombe and Goett hereby confirm the representations and warranties
set out in Exhibit "B" to the Agreement, with said representations and
warranties to be applied to the warrants described herein and the Futech stock
to be acquired in connection with said warrants.
7. Futech represents and warrants to Withycombe that a true and complete
list of the number of outstanding shares of stock in Futech and all warrants
and stock options (including their respective strike or exercise price) in
Futech is attached as APPENDIX ONE to this Amendment. Futech agrees that it
will not issue any additional common stock, preferred stock, warrants, or stock
options in Futech without the written consent of Withycombe. Any request made
by Futech for approval of additional common stock, preferred stock, warrants,
or stock options must be accompanied by written disclosure of the name and
address of the common stock, preferred stock, warrant, or stock option holder
together with an identification of the amount of shares to be issued or subject
to the common stock, preferred stock, warrant, or stock options.
8. Futech agrees not to issue any preferred stock or any class of stock
with priority over the common stock that is subject to the warrants of
Withycombe described in Paragraph 2 above without the prior approval of
Withycombe.
9. Futech directly or indirectly owns all or portions of various other
companies that may be engaged in business similar or different from that of
Futech. These companies will be referred to as the "AFFILIATE COMPANIES".
Futech and Goett agree that they will take no action with respect to Futech or
the Affiliated Companies that in any manner may impact Futech's ability to
repay the Loan from Withycombe.
10. Except as expressly called for in this Amendment, the Agreement
continues unmodified and in full force and effect.
11. If there is conflict between the Note and Loan Agreement, on the one
hand, and the Agreement and this Amendment, on the other hand, the provisions
of the Note and Loan Agreement will control.
12. This Amendment may be executed by the parties in one or more
counterparts, and any number of counterparts signed in the aggregate by the
parties shall constitute a single instrument. The parties authorize and agree
to accept facsimile signatures in counterparts to this Amendment, and that said
facsimile signatures shall for all purposes be binding upon the parties as if
the same were originals.
3
11
DATED the date first written above.
FUTECH: Futech Interactive Products, Inc.,
an Arizona corporation
By
----------------------------------
Vincent W. Goett, CEO
GOETT:
----------------------------------
Vincent W. Goett
WITHYCOMBE: /s/ F. Keith Withycombe
----------------------------------
F. Keith Withycombe
ROSEPINK REPRESENTATIONS AND WARRANTIES:
Rosepink made certain representations, warranties and agreements in
writing at the end of the Agreement. Said representations, warranties and
agreements are hereby confirmed and ratified, including as to the warrants
described above and the Futech stock to be acquired by Rosepink in connection
with those warrants.
- ----------------------------------
Robert J. Rosepink
4
12
DATED the date first written above.
FUTECH: Futech Interactive Products, Inc.,
an Arizona corporation
By /s/ Vincent W. Goett
-------------------------------
Vincent W. Goett, CEO
GOETT: /s/ Vincent W. Goett
---------------------------------
Vincent W. Goett
WITHYCOMBE:
---------------------------------
F. Keith Withycombe
ROSEPINK REPRESENTATIONS AND WARRANTIES:
Rosepink made certain representations, warranties and agreements in writing
at the end of the Agreement. Said representations, warranties and agreements are
hereby confirmed and ratified, including as to the warrants described above and
the Futech stock to be acquired by Rosepink in connection with those warrants.
- --------------------------
Robert J. Rosepink
4
13
APPENDIX ONE
TO
FIRST AMENDMENT TO
SUBORDINATION, PRIORITY AND SECURITY AGREEMENT
(list of warrant and stock option holders)
14
FUTECH STOCK STATUS
AS OF DECEMBER 31, 1998 PRE-PP
Acuna, Carlos 5,000.0000 0.0062%
Alperin, Steven 60,000.0000 0.0747%
Anderson, Roger & Shirley 15,000.0000 0.0187%
Auer & Co 60,000.0000 0.0747%
Barrett, Stephen 200,000.0000 0.2491%
Bartolon, Gene & Carol 2,000.0000 0.0025%
Bean, Mike & Karen 3,000.0000 0.0037%
Bird, Cleta 500,000.0000 0.6228%
Blair Partners-Missouri 748,800.0000 0.9328%
Bonnell Family Trust 100,000.0000 0.1246%
Borinstein, Bill 200,000.0000 0.2491%
Borinstein, Joe 200,000.0000 0.2491%
Brookson, Robert & Helen 850,000.0000 1.0588%
Clement, Kim 100,000.0000 0.1246%
Cohan, Jonathan 60,000.0000 0.0747%
Cox, Glen 25,000.0000 0.0311%
Cuevas, Alex 37,500.0000 0.0467%
Cummings, Herbert K. Marital Trust 1,241,995.0000 1.5471%
Curtin, Meryl 3,200.0000 0.0040%
Dow, Mindy 5,000.0000 0.0062%
Fitzgerald, Ron 1,218,949.0000 1.5184%
Foley, Chuck 350,000.0000 0.4360%
Ford, Silas 200,000.0000 0.2491%
Fountain of Hope-Susan Stacey 150,000.0000 0.1868%
Frank, Michael 375,504.0000 0.4678%
FT TR (Rod Turner Trust) 450,000.0000 0.5605%
FT TR (Rod Turner Trust) 450,000.0000 0.5605%
Furman, Rod 850,000.0000 1.0588%
Galameau, Penny Sue 1,489,017.3750 1.8548%
Goett, Garry & Darllyne 5,766,227.0000 7.2102% 7,406,764.625
Goett, Garry 38,000.0000 0.0448% 9.2263%
Goett, Melissa Turner 1,850,000.0000 2.3045% 19,912,263.00
Goett, Vincent W. 2,148,011.0000 2.6757% 24.8040%
Goett, Vincent W. & Melissa Turner 15,614,252.0000 19.4501%
Goett, Brooke-Ashton Turner 100,000.0000 0.1246%
Goett, Kendall Turner 100,000.0000 0.1246%
Goett, Samanatha Terriann 100,000.0000 0.1246%
Golub, Alan 4,000.0000 0.0050%
Hare, Hazel 800,000.0000 0.9965%
Harlan, Brian 10,000.0000 0.0125%
Ishcomer, Barbara 327,510.0000 0.4080%
Ishcomer, Chuck 327,510.0000 0.4080% 2,344.703
Ishcomer, Chuck & Barbara 1,689,663.0000 2.1048% 2.9207%
Jeffries, James & Karen 5,000.0000 0.0062%
Jensen, Kristen 10,000.0000 0.0125%
Jensen, Mart 10,000.0000 0.0125%
Kichon, Jon & Dana 12,000.0000 0.0149%
Kimberly Scott, Ltd. 360,845.0000 0.4495%
15
Kinghorn, R. Scott 26,667.0000 0.0332%
Krim Assoc. Plan 60,000.0000 0.0747% 996.00
Krim, Joan 20,000.0000 0.0249% 1.2432%
Krim, Richard 140,000.0000 0.1744%
Krim, Scott 190,000.0000 0.2367%
Kubiak, David & Juanita 5,000.0000 0.0062%
L.A. Ventures II 315,830.0000 0.3934%
LaFay, Catherine 315,830.0000 0.3934%
Lambros, Connie 15,000.0000 0.0187%
Landis, Dean 3,000.0000 0.0037%
Landis, Kay 1,000.0000 0.0012%
Landrum, Sharon 8,000.0000 0.0100%
Lardoux, Jean-Pierre 30,000.0000 0.0374%
Lechter, Sharon 1,200,000.0000 1.4948%
Leggat, Andrew 2,000.0000 0.0025%
Madden, Ken & Helene 120,000.0000 0.1495%
Magyar, Steve 24,000.0000 0.0299%
Mark, Reuben 400,000.0000 0.4963%
Marks, Michael & Natalie 10,000.0000 0.0125%
Massey, Terrill 500.0000 0.0006%
Matthews, Kenda 80,001.0000 0.0997%
McTaggart, Amelia 20,000.0000 0.0249% 12,622.375
McTaggart, Amy 20,000.0000 0.0249% 15.7232%
McTaggart, Deb 5,502,375.0000 6.8541%
McTaggart, Matthew 20,000.0000 0.0249%
McTaggart, Melissa 20,000.0000 0.0249%
McTaggart, Sarah 20,000.0000 0.0249%
McTaggart, Scott 20,000.0000 0.0249%
Mehojah, William & Fredericka 120,000.0000 0.1495%
Metroplex Properties, Inc. 922,731.7050 1.1494%
Metroplex Property Inc., Reinstated 180,000.0000 0.2242%
Money Purchase Pension Plan
Meyers, Barry 20,000.0000 0.0249%
Micalizio, Dean 10,000.0000 0.0125%
Mitchell, Judy 15,000.0000 0.0187%
Newtech Consulting, Inc. 4,000,000.0000 4.9827%
Olympic Management, Inc. 81,410.6250 0.1014%
Olympic Properties, Inc. 398,395.2950 0.4963%
Oman Family Trust 2,379,000.0000 2.9634%
Oman, Jessica 10,000.0000 0.0125%
Oman, Michael 10,000.0000 0.0125%
Pacific Ranch, LP 3,000,000.0000 3.7370%
PaineWeb.Krim 588,000.0000 0.7325%
PaineWeb.Taub 18,000.0000 0.0224%
Pasquill, Diane 25,000.0000 0.0311%
Persson, Randolph 2,500.0000 0.0031%
Persson, Teresa C. 2,500.0000 0.0031%
Petter, Joseph 500,000.0000 0.6226%
Phillips, Christina 2,000.0000 0.0025%
Ragone, Garry & Marian 1,242,184.0000 1.5473%
Rodgers, Ronald 10,000.0000 0.0125%
16
Rosen, Charles .......................... 20,000.0000 0.0249%
Rosebud Investments., L.L.C. ............ 125,000.0000 0.1557% 825,000
Rosepink, Robert ........................ 500,000.0000 0.6228% 0.7785%
Ruhl, Barry ............................. 600,000.0000 0.7474%
Samarasekera, Ronda ..................... 500.0000 0.0006%
Scottsdale Memorial Health Foundation ... 200,000.0000 0.2491%
AKA Scottsdale Healthcare Foundation ....
Scottsdale Worship Center ............... 250,000.0000 0.3114%
Sears, Donald E. ........................ 13,500.0000 0.0168%
Sears, Rafaela .......................... 25,000.0000 0.0311%
Seaver, Douglas ......................... 740,052.0000 0.9219%
Serrano, Darlynn ........................ 12,250.0000 0.0153%
Sotebeer, Mike & Elsje .................. 10,000.0000 0.0125%
Taub, Joyce Lynn ........................ 60,000.0000 0.0747% 78,000
Taylor, Rona ............................ 40,000.0000 0.0498% 0.0972%
Trattler, Anne .......................... 60,000.0000 0.0997%
Turner Fam. Trust ....................... 1,000.0000 0.0012%
Turner, R. Bradford ..................... 6,282,695.0000 7.8261%
Turner, Roderick L. ..................... 7,225,721.0000 9.0008% 9,489,511
Turner, Terry C. ........................ 1,363,790.0000 1.6988% 11.8207%
Ulloa, Javier ........................... 5,000.0000 0.0062%
Victoria Financial, Inc. ................ 360,844.0000 0.4495%
Walbridge, Don .......................... 20,000.0000 0.0249%
Walbridge, Ken .......................... 35,000.0000 0.0436%
Waldon, Jim ............................. 120,000.0000 0.1495%
Weber, Barbara .......................... 40,000.0000 0.0498%
Westarz Homes, Inc. ..................... 444,177.0000 0.5533% 1,165,866
Wright, Debbra .......................... 10,000.0000 0.0125% 1,4523%
Wunsch, Robert .......................... 150,000.0000 0.1868%
Zimmerman, Edward ....................... 50,000.0000 0.0823%
Zimmerman, Harilyn ...................... 50,000.0000 0.0623%
Zovne, Jerry & Karen .................... 75,000.0000 0.0934%
----------------
80,278,457.0000 100.0000%
Total Issued ..................... 80,278,457.0000 100.0000%
Total Authorized ................. 235,000,000.0000
shares reserved for Preferred ......... 100,000,000.0000
Available to Issue ............... 54,721,543.0000
17
Stock Options/Employee Options/Warrants (Revised)
Initially
Entity Date Awarded Reason Price Total Shares Effective Amount
Vincent W. Goett 9/26/97 Grant $ 0.05 10,000,000 9/26/97 10M
12/31/97 Grant $ 0.10 7,000,000 12/31/98 2M
1/29/99 Grant $ 0.05 8,000,000 1/29/00
5/12/99 Bonus $ 0.05 9,000,000
Joseph K. Petter 1/29/98 Grant $ 0.25 2,500,000 1/29/99 833,334
1/29/99 Grant $ 0.05 2,750,000 1/29/00
Fred B. Gretsch 1/29/98 Grant $ 0.25 2,500,000 1/29/99 833,334
6/30/98 Grant $ 0.20 1,000,000 6/30/99
1/29/99 Grant $ 0.05 2,250,000 1/29/00
Scott Leuthold 1/29/98 LOEmploy 50,000 $ 0.25 3/1/97
50,000 $ 0.25 2/3/98
50,000 $ 0.25 2/3/99 150,000 vested 150,000
Charles Foley 1/29/98 LOEmploy 300,000 $ 0.25 12/31/97
300,000 $ 0.25 12/31/98 600,000 vested 600,000
David Wine 11/1/98 LOEmploy $ 0.25 200,000 11/1/99
1/29/99 Grant $ 0.05 400,000 1/29/00
Kip Dean 11/1/98 LOEmploy $ 0.25 100,000 11/1/99
1/29/99 Grant $ 0.05 200,000 1/29/00
Jim Houston 6/1/99 LOEmploy $ 0.25 300,000 6/1/00
Brian Young 6/1/99 LOEmploy $ 0.25 300,000 6/1/00
Scott Leuthold 1/29/98 LOEmploy $ 0.25 150,000 1/29/99 50,000
Connie Lambros 1/29/98 Grant $ 0.25 600,000 1/29/99 200,000
1/29/99 Grant $ 0.05 500,000 1/29/00
Melvin J. Sauder 7/1/98 LOEmploy $ 0.20 500,000 7/1/99
11/1/98 Grant $ 0.20 1,500,000 11/1/99
1/29/99 Grant $ 0.05 1,250,000 1/29/00
Alex Cuevas 1/29/98 Grant $ 0.25 300,000 1/29/99 100,000
1/29/99 Grant $ 0.05 500,000 1/29/00
Javier Ulloa 1/29/98 Grant $ 0.25 100,000 1/29/99 33,334
Goett/Turner Loans
1/2/98 $2,500,000 Loan $ 0.05 1.25 V&M 2,500,000 1/2/99 2.5M
1.25 RT
3/31/98 $3,500,000 Guarantee $ 0.05 V&M 7,200,000 3/31/99 7.2M
Page 1
18
5/5/98 $ 1,500,000 Loan $0.05 1.5 V&M 3,000,000 5/5/99 3M
1.5 Rod
6/24/98 $ 1,000,000 Loan $0.05 1 PMT 2,000,000 6/24/99
1 RT
8/10/98 $ 2,000,000 Loan $0.05 6 PMT 8,000,000 8/10/99
2 RT
12/3/98 $ 7,000,000 Guarantee $0.05 PMT 21,000,000 12/3/98 21M
12/15/98 $ 8,000,000 Loan $0.05 4 PMT 8,000,000 12/15/99
4 RT
F. Keith Withycombe 12/3/98 Guarantee $0.05 21,000,000 12/3/98 21M
& Patricia A. Withycombe (H&W) 9,000,000
Robert J. Rosepink 12/3/98 Facilitator $0.05 4,000,000 12/3/98 4M
1,000,000
2,000,000
Roderick L. Turner Loans
4/2/97 $ 350,000 Loan $417,083.33 $0.15 2,780,555.53 3/1/99 stock
8/4/98 $ 300,000 Loan $314,601.37 $0.15 2,097,342.47 3/1/99 stock
Notes Payable/Option Conversions
Pickard $121,262.40 $0.15 808,416.00 3/1/99 stock
Dyer Holdings $ 84,883.40 $0.15 565,891.20 3/1/99 stock
Nehring Trust $121,262.40 $0.15 808,416.00 3/1/99 stock
Taylor $ 40,836.20 $0.15
1998 Stock Option Plan Inactive 7,200,000 N/A
22,800,000 TBD
H.C. Wainwright & Co., Inc. Contract $0.50 300,000 TBD
William Hermes-Employment Agreement 4/1/99
4/1/99 Preferred $0.05 2,500,000 4/1/99 2.5M
4/1/99 Common $0.25 2,000,000 3/1/00
Loan Option Agreement
John Dawson $5M Loan $0.25 ? 20,000,000 TBD
R. Bradford Turner Grant $0.25 ? 1,500,000 TBD
FBG 5/16/99 204,710,621.20
==============
Page 2
19
PROMISSORY NOTE
$2,000,000.00 As of May 21, 1999
Phoenix, Arizona
THIS NOTE is made as of the date stated above by Futech Interactive
Products, Inc., an Arizona corporation ("Maker") to the order of and F. Keith
Withycombe ("Payee").
1. PAYMENT. For value received, Maker promises to pay to Payee or
Payee's order, as hereinafter set forth, without offset, the principal sum of
Two Million Dollars ($2,000,000.00),together with interest calculated at one
percentage point over the publicly announced Reference Rate of interest of Bank
of America National Trust and Savings Association in San Francisco, California,
as such rate may from time to time change. Principal and interest are payable
in lawful money of the United States of America at 6237 North 59th Place,
Paradise Valley, Arizona 85253, or at such other address as the holder hereof
may from time to time designate in writing, in full on or before December 1,
1999. All payments made hereunder shall be applied to interest and principal in
that order.
2. PREPAYMENT. Maker has the privilege, at any time, to prepay the whole
or any part of the unpaid balance hereof without penalty or forfeiture.
3. INTEREST. All interest payable pursuant to this Note shall be
computed on the basis of a 360-day year. In no event shall the aggregate of the
interest herein provided to be paid over the contractual term of the loan
exceed the highest rate to which a borrower and lender may agree in writing
under the laws of the State of Arizona.
4. DEFAULT. If the principal due under this Note, or under any mortgage,
deed of trust, security agreement, or other agreement between Maker and Payee
pertaining to the indebtedness evidenced hereby shall not be paid when due, or
if Maker fails to comply with all of the other terms and conditions of this
Note or any instrument securing this Note, and such failure shall continue for
ten days after notice thereof is given to Maker, then the entire principal sum,
accrued interest, and all other amounts due hereunder shall, at the option of
Payee, become immediately due and payable.
5. COLLECTION COSTS. Maker agrees to reimburse Payee for all costs and
expenses, including without limitation, all reasonable attorneys' fees incurred
in the enforcement or collection of this Note or any judgement obtained hereon.
6. WAIVER, CONSENT, ETC. Maker, sureties, guarantors, and endorsers
hereof agree to be jointly and severally bound, severally waive any homestead or
exemption rights against said debt, severally waive diligence, demand,
presentment for payment, protest, protest and demand, notice of protest, notice
of nonpayment, notice of default, notice of acceleration, and all other notices
and demands of any kind. Maker, sureties, guarantors and endorsers hereof hereby
severally
1
20
consent to the extension of time for payment of this Note or any installment
hereof, any modification hereof, release from liability of any maker, endorser,
or any other person or entity at any time liable for the payment hereof, and the
modification or release of any collateral at any time held as security for this
Note, without notice and without affecting the liability of any maker,
guarantor, surety or endorser. Maker further waives, to the extent permitted by
law, the right to plead any and all statutes of limitations as a defense to any
demand on this Note.
Delay or failure in exercising any of Payee's rights or options hereunder
shall not constitute a waiver thereof, and any waiver of any rights or options
hereunder shall not constitute a waiver of the right to exercise the same in the
event of any subsequent default. By accepting payment of any sum hereunder after
its due date, the holder hereof shall not waive its rights either to require
prompt payment when due of all other sums hereunder or to declare a default for
failure to make prompt payment. No waiver by the holder of this Note shall be
effective unless it is in writing and signed by such holder.
7. SEVERABILITY. If any provision of this Note or any application of such
provision shall be declared by a court of competent jurisdiction to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
application of such provision nor the balance of the provisions hereof which
shall, to the fullest extent possible, remain in full force and effect, and such
court shall reform such unenforceable provision so as to give maximum
permissible effect to the intentions of the parties as expressed therein.
8. SECURITY. As security for Maker's performance under this Note, Maker
hereby grants Payee a security interest in any and all assets now owned or
hereafter acquired by Maker, including but not limited to the assets identified
on Exhibit "A" attached hereto and hereby made a part hereof. In the event of
default by Maker hereunder, Payee shall have all rights with respect to such
collateral as are available to a secured party under the Uniform Commercial Code
in the State of Arizona, as the same may from time to time be changed. Maker
agrees to execute and deliver to Payee and pay the costs of recording financing
statements evidencing this security agreement and other documents necessary or
appropriate to perfect this security interest. Maker shall reimburse Payee for
all reasonable costs associated with such filings.
9. MISCELLANEOUS. The provisions of this Note shall be binding upon Maker
and Maker's personal representatives, successors and assigns, and shall inure to
the benefit of Payee and Payee's successors and assigns. This Note shall be
governed by and construed and enforced in accordance with the laws of the State
of Arizona. The courts of the State of Arizona shall have the sole and exclusive
jurisdiction and venue in any case or controversy arising under this Note or by
reason of this Note. The parties agree that any litigation or arbitration
arising from the interpretation or enforcement of this Note shall be only in
either Maricopa County Superior Court or in the United States Federal District
Court for the District of Arizona, and for this purpose each party to this Note
(and each person who shall become a party) hereby expressly and irrevocably
consents to the jurisdiction and venue of such courts. This Note shall be
construed according to its fair meaning and neither for nor against the drafting
party. Time is of the essence of this Note and each and every term and provision
hereof.
2
21
DATED the date first hereinabove written.
Futech Interactive Products, Inc.,
an Arizona corporation
/s/ Vincent W. Goett
---------------------------
Vincent W. Goett, CEO
Lists of Exhibits:
Description of Collateral "A"
3
22
Exhibit "A"
DESCRIPTION OF COLLATERAL
The collateral consists of the following described property, together with
all other personal property and equipment, of whatever nature or kind, now owned
or subsequently acquired by Debtor, including all additions, substitutions,
accessions, repairs, replacements and additions thereto (including the proceeds
of sales thereof) whether or not installed, affixed, or attached to, kept or
situated on or at, any real property owned by the Debtor (the "Real Property"):
1. All items of Debtor's machinery, furniture, furnishings, equipment,
fixtures, materials, handling equipment, appliances, tools, fabrication devices,
jigs, materials, and other personal property, including all processing,
manufacturing, fabricating, sales, and service equipment.
2. Any franchise rights, licenses, contracts, plans, surveys, permits, and
agreements required or used in connection with the ownership, operation, or
maintenance of the Real Property or any trade or business conducted by Debtor,
including without limitation any licenses for the sale of alcoholic beverages,
contracts with builders, material suppliers, and professional services
providers.
3. All rights of Debtor to the use of any trade name, trademark, or
service mark, all phone numbers and all advertising rights and contracts.
4. Any and all awards, including interest, previously and hereafter made
to Debtor for taking by eminent domain of the whole or any part of the Real
Property or any easements therein.
5. All of Debtor's interest in any inventory, trade stock, or other
personal property available for sale in the ordinary course of Debtor's
business, all raw materials, work-in-process, finished goods, salvaged
materials, and supplies, and all plans and blueprints of any type. Included are
all goods or products of every type or description customarily held for resale
by Debtor, along with all raw materials to be processed or those being
processes, and all materials used or consumed in Debtor's business, including
but not limited to packaging, containers, wrappers and labels, and all office
and warehouse supplies of every type and description.
6. All cash on hand, checking accounts, savings accounts, and other
deposit and other accounts of any type, with financial institutions or
otherwise, and all rights of every type to receive consideration from third
parties.
7. All instruments, documents, chattel paper, accounts receivable,
contract rights and general intangibles of every type and description.
8. All construction materials, supplies, lumber and all other materials or
equipment delivered to the Real Property for incorporation therein or use in
construction at any time being conducted thereon.
9. All of Debtor's interest in:
(a) All existing and future leases (of real property and/or personal
property, whether as lessor or lessee), and all rents, franchises, issues and
profits, and all security deposits from tenants, lessees or other occupiers or
any real property;
(b) All policies of insurance and all proceeds, loss payable clauses and
premium refunds, and all claims relating thereto;
(c) All operating or management or supervision agreements;
23
(d) All reciprocal easement agreements;
(e) All contracts with builders and/or material suppliers;
(f) All building and use permits issued by any governmental agency;
(g) All deposits made with or other security given to utility
companies or other companies by Debtor, and all advance payments of insurance
premiums made by Debtor;
(h) In so far as permitted by applicable law, all licenses, including
but not limited to any operating licenses, contracts, management contracts or
agreements, franchise agreements, permits, authorizations or certificates
required or used by Debtor;
(i) All damages, royalties and revenue of every kind, nature and
description whatsoever that Debtor may be entitled to receive from any person
or entity, with the right in the Secured Party to receive and receipt therefor
and apply the same to the indebtedness secured hereby either before or after
any default hereunder, and Secured Party may demand, sue for and recover any
such payments but shall not be required to do so.
10. All of Debtor's rights, title and interest in and to any leasehold
improvements.
11. Any and all of Debtor's assets not identified above are included
within the collateral secured hereby.
The foregoing shall specifically include, but shall not be limited to the
assets, if any, identified in Exhibit "A-1" attached hereto and hereby made a
part hereof.
2
24
- -----------------------------------------------------------------------------------------------------------------------------------
This instrument was recorded at request of:
F. Keith Withycombe
6237 North 59th Place
Paradise Valley, Arizona 85253
The recording official is directed to return this instrument,
or a copy of this instrument, to the person named above. Space Reserved For Recording Information
- -----------------------------------------------------------------------------------------------------------------------------------
UNIFORM
COMMERCIAL CODE
Loan No. FINANCING STATEMENT FOR FILING
------------------- Form UCC-1
- -----------------------------------------------------------------------------------------------------------------------------------
Effective Date County and State of Transaction
May 21, 1999 Maricopa County, Arizona
- -----------------------------------------------------------------------------------------------------------------------------------
DEBTOR (Name, Address and ZIP Code) SECURED PARTY (Name, Address and ZIP Code)
Futech Interactive Products, Inc. F. Keith Withycombe
Attention: Vincent W. Goett, CEO 6237 North 59th Place
2999 N. 44th Street, Suite 225 Paradise Valley, Arizona
Phoenix, Arizona 85018-7247
- -----------------------------------------------------------------------------------------------------------------------------------
Assignee of Secured Party Record Owner of Real Property, If Not Debtor
(Name, Address and Zip Code) (Name, Address and ZIP Code)
- -----------------------------------------------------------------------------------------------------------------------------------
Counties Where Collateral is Located [ ] Products of Collateral are also covered
Maricopa County, Arizona [ ] Proceeds of Collateral are also covered
- -----------------------------------------------------------------------------------------------------------------------------------
If collateral is timber to be cut, crops growing or to be grown, minerals or the like, accounts to be financed at the wellhead or
minehead of the well or mine, or goods which are or are to become fixtures, the real property to which these are affixed or
concerned is legal described:
[ ] This financing statement is to be filed in the office where a mortgage on the real property would be recorded.
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Financing Statement covers the following types or items of property:
All assets of Debtor, now owned and/or hereafter acquired, including but not limited to the assets identified on Exhibit "A"
attached hereto and hereby made a part hereof.
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This Financing Statement is filed or recorded without Debtor's signature to perfect a security interest in collateral in which:
[ ] is already subject to a security interest in another jurisdiction when it was brought into the state or which Debtor changed
location to this State;
[ ] Are proceeds of the original collateral described above in which a security interest was perfected;
[ ] Was acquired four months or less after Debtor has changed its name, identity or corporate structure;
[ ] Is no longer effective due to lapse of the original filing.
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Futech Interactive Products, Inc., an Arizona corporation
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By /s/ Vincent W. Goett F. Keith Withycombe
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Vincent W. Goett, CEO
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Signatures of Debtor or Assignor Signatures of Secured Party or Assignee
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