EXHIBIT 6.1
Loan Agreement
Loan Agreement
This Loan Agreement (the "Agreement") is made and entered into on July 30,
1999, by and between Mercantile Factoring & Credit Corp., a Nevada corporation,
having its principal place of business at 0000 Xxxx. Xxxx Xxxxxxxx Xxxxx, Xxxxxx
#0000, Xxxxxxxx, Xxxxxx X0X 0X0, Xxxxxx (the "Borrower" or "MFC"), and Worldnet
Connections Inc., a Nevada corporation, having its registered office at 0000
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000 (the "Creditor" or "Worldnet").
The Borrower and Creditor are referred to collectively as the "Parties".
Recitals
WHEREAS, Borrower has requested that the Creditor make loans and/or
otherwise extend credit to or on behalf of Borrower to finance Borrower's
business;
WHEREAS, Creditor is willing to make such loans and/ or extensions of
credit to Borrower upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual promises herein contained,
and each intending to be legally bound thereby, the Parties hereto agree as
follows:
1 Definitions.
1.1 "Borrower" has the meaning set forth in the preface above.
1.2 "Creditor" has the meaning set forth in the preface above.
1.3 "Funds" means the capital needed by MFC to finance MFC's business in
multiples of one hundred thousand ($100,000) dollars.
1.4 "MFC" has the meaning set forth in the preface above.
1.5 "Worldnet" has the meaning set forth in the preface above.
2 Basic Transaction.
2.1 Borrowing and Lending Funds. On and subject to the terms and
conditions of this Agreement, the Borrower agrees to borrow from the Creditor,
and the Creditor agrees to lend to the Borrower (in multiples of one hundred
thousand ($100,000) dollars) the Funds on an as-needed basis.
3 Representations and Warranties of the Borrower.
3.1 Principal Place of Business. The principal place of business of the
Borrower is 1250 Boul. Xxxx Xxxxxxxx Ouest, Bureau #2925, Xxxxxxxx, Xxxxxx X0X
0X0, Xxxxxx.
3.2 Use of Proceeds. The borrowed Funds contemplated hereunder shall be
used for legal and proper corporate purposes.
3.3 Organization of the Borrower. The Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
3.4 Authorization of Transaction. The Borrower has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Borrower have duly
authorized the execution, delivery, and performance of this
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Agreement by the Borrower. This Agreement constitutes the valid and legally
binding obligation of the Borrower, enforceable in accordance with its terms and
conditions.
3.5 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Borrower is subject or any provision
of the charter or bylaws of the Borrower or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Borrower is a party or by which it is bound. The
Borrower does not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement.
4 Representations and Warranties of the Creditor.
4.1 Principal Place of Business. The principal place of business of the
Creditor is 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000.
4.2 Organization of the Creditor. The Creditor is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
4.3 Authorization of Transaction. The Creditor has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. Without limiting the
generality of the foregoing, the board of directors of the Creditor have duly
authorized the execution, delivery, and performance of this Agreement by the
Creditor. This Agreement constitutes the valid and legally binding obligation of
the Creditor, enforceable in accordance with its terms and conditions.
4.4 Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Creditor is subject or any provision
of the charter or bylaws of the Creditor or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Creditor is a party or by which it is bound. The
Creditor does not need to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental agency
in order for the Parties to consummate the transactions contemplated by this
Agreement.
5 Covenants. The Parties agrees as follows:
5.1 General. Each of the Parties will use its reasonable best efforts to
take all action and do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement.
5.2 Notices. The Creditor agrees to provide Funds to the Borrower upon
being notified by the Borrower fifteen (15) days in advance and in accordance to
Section 6.8 herein.
5.3 Availibility of Funds. Subject to Section 5.6, the Creditor agrees to
provide Funds to the Borrower upon Borrower's request.
5.4 Request for Funds. The Borrower agrees that all request for Funds
shall be in
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multiples of one hundred thousand ($100,000) dollars.
5.5 Unsecured Convertible Note. The Borrower shall execute an Unsecured
Convertible Note ("Unsecured Note"), the form of which is annexed hereto as
Exhibit A, with a five (5) year term that bears interest at eight (8%) percent
per annum. Each $100,000 Unsecured Note will be convertible at the discretion of
the Creditor into 60,000, $.001 par value common shares of the Borrower.
5.6 Right of First Refusal. The Borrower agrees that Creditor shall have a
right of first refusal on all of Borrower's request for Funding.
6 Miscellaneous.
6.1 Waiver. Failure to insist upon strict compliance with any term or
condition of this Agreement shall not be deemed a waiver of such term or
condition, nor shall any waiver or relinquishment of any right or power at any
one or more times be deemed a waiver or relinquishment of such right or power at
any other time.
6.2 Severability. If any clause or provision of this Agreement shall be
held to be unenforceable by any court, the remaining clauses and provisions
shall be unaffected and shall continue in full force and effect. It is the
desire and intent of the parties to this Agreement that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
6.3 Agreement Binding on Successors. This Agreement shall be binding upon
the parties, their legal representatives, heirs, successors and assigns.
6.4 Entire Agreement; Modification. This Agreement contains the entire
understanding between the Parties as to the their obligations, and all prior
oral discussions, compensation understandings, negotiations and writings
notwithstanding, this Agreement constitutes the Parties' sole source of rights
and duties with respect to their obligations. This Agreement may not be changed
orally, but only by agreement in writing expressly identifying itself as an
amendment to this Agreement and signed by the Parties.
6.5 Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the domestic laws of the State of Nevada without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Nevada or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Nevada.
6.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but which together shall constitute one and
same instrument.
6.7 Construction. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Debtor and the Creditor and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Neither the drafting history nor the negotiating
history of this Agreement shall be used or referred to in connection with the
construction or interpretation of this Agreement. Any reference to any federal,
state, local, provincial or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise. The word "including" shall mean including without limitation.
6.8 Notices. All notices, requests, demands, and other communications to
be given pursuant to the terms of this Agreement shall be in writing and shall
be deemed to have been duly given if delivered, mailed by certified or
registered mail (postage prepaid), shipped and
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receipted by express courier service (charges prepaid), or mailed first class
(postage prepaid):
If to the Debtor: Copy to:
Xxxxxxxxx X. Xxxxxxxxx, President
Mercantile Factoring & Credit Corporation, "NONE"
0000 Xxxx. Xxxx Xxxxxxxx Xxxxx, Xxxxx #0000,
Xxxxxxxx, Xxxxxx X0X 0X0, Xxxxxx
If to the Creditor: Copy to:
Xxxx X. Xxxxxxx, President,
Worldnet Connections, Inc. "NONE"
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx, Xxxxxx 00000 .
Any party may change its address by prior written notice to the other
parties.
6.9 Third Party Beneficiaries. There are no third party beneficiaries of
this Agreement.
6.10 Headings. The headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be part of this Agreement
and shall not be referred to in connection with the construction or
interpretation of this Agreement.
6.11 Further Actions. Each party hereto shall execute and/or cause to be
delivered to the other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request to
effectuate the intent and purposes of this Agreement.
6.12 Attorneys' Fees. If any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
is brought against either party to this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).
6.13 Unsecured Loan. The Parties agree that the Funds will be unsecured
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Mercantile Factoring & Credit Corp. Worldnet Connections Inc.
by: /s/ Xxxxxxxxx X. Xxxxxxxxx by: /s/ Xxxx X. Xxxxxxx
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Xxxxxxxxx X. Xxxxxxxxx Xxxx X. Xxxxxxx
President Secretary
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