exv10w20



 



Exhibit 10.20



LOAN AGREEMENT



     This LOAN AGREEMENT (“Agreement”) is made and entered into as of November
4, 2002, by and between ZAMBA CORPORATION and ENTRX CORPORATION.





RECITALS:



     FIRST: Borrower and Lender have agreed to an arrangement whereby Lender
will extend to Borrower a loan of up to $2,500,000 (the “Loan”), the proceeds
of which are to be advanced in three stages; and





     SECOND: Lender and Borrower have agreed to such Loan, subject to the terms
and upon the conditions contained herein.





AGREEMENT



     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender hereby agree
as follows:





ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS



     1.1  Definitions.  As used herein, in each exhibit or schedule hereto and
in each other Loan Document (unless otherwise expressly defined therein), the
following terms shall have the following respective meanings (such terms to be
equally applicable to both the singular and plural forms of the terms defined):






		
	 	     “Advances” shall mean, collectively, the First, Second and Third
Advances, with such advances being respectively defined as set forth in
Section 3.1.1 hereof.




		
	 	     “Agreement” means this Loan Agreement by and between Borrower and
Lender, as the same may be amended, modified or restated from time to
time hereafter.
	 
	 	     “Borrower” means Zamba Corporation, a Delaware corporation.
	 
	 	     “Business Day” means a day on which Lender is open for the normal
transaction of business in Minnesota.
	 
	 	     “Collateral” shall mean up to 833,333 shares of NextNet Series A
Preferred Stock which are owned by Borrower and which are more fully
described in the Pledge Agreement.
	 
	 	     “Conversion Securities” means, as applicable, the shares of
Borrower’s common stock issuable upon conversion of the Note, or (ii)
shares of NextNet Series A Preferred Stock which are owned by Borrower
and which are issuable upon conversion of the Note.
	 
	 	     “Default” means the occurrence of any event which with the giving of
notice and/or the lapse of any applicable grace period would constitute
an Event of Default hereunder.
	 
	 	     “Disclosure Materials” shall have the meaning set forth in Section
4.2 hereof.
	 
	 	     “Event of Default” means the occurrence of an event as described in
Article IX of this Agreement.
	 
	 	     “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
	 
	 	     “GAAP” means accounting principles generally accepted in the United
States consistently applied and maintained throughout the period
indicated, except for changes mandated by the Financial Accounting
Standard Board or similar accounting authority of comparable standing.
	 
	 	     “Lender” means Entrx Corporation, a Delaware corporation.





 







 






		
	 	     “Loan Documents” means this Agreement, the Note and the Pledge
Agreement as the same may be amended, modified or restated from time to
time.
	 
	 	     “Material Adverse Occurrence” means any occurrence, state of facts,
change, development, effect, condition, circumstance or failure of
performance, whether or not insured against, of whatsoever nature
(including, without limitation, any adverse determination in any
litigation, arbitration or governmental investigation or proceeding)
which Lender determines in its sole reasonable discretion, has, will or
could reasonably be expected to materially adversely affect the business,
assets, financial condition or results of operations of Borrower or
NextNet as applicable, or materially impair the ability of Borrower to
perform its obligations under this Agreement or any instrument executed
pursuant hereto.
	 
	 	     “Maturity Date” means March 31, 2003.
	 
	 	     “NextNet” means NextNet Wireless, Inc., a Delaware corporation.
	 
	 	     “Note” means that certain Secured Convertible Promissory Note, dated
of even date herewith, made payable to Lender’s order by Borrower, in the
original principal amount of $2,500,000, as the same may be amended,
restated or extended from time to time hereafter.
	 
	 	     “Option” shall mean Borrower’s option to purchase up to 250,000
shares of NextNet Series A Preferred Stock owned by Lender in accordance
with the provisions of Section 3.3 hereof.
	 
	 	     “Pledge Agreement” means that certain Escrow Pledge Security
Agreement, dated of even date herewith, by and among Borrower, Lender and
Wells Fargo Bank Minnesota, N.A., as collateral agent (“Collateral
Agent”).
	 
	 	     “Security Interest” means any security interest, pledge, lien,
hypothecation or other encumbrance now or hereafter granted to Lender by
Borrower.



     1.2  Accounting Terms and Calculations.  All accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP. To the extent any change in GAAP after the date
hereof affects any computation or determination required to be made pursuant to
this Agreement, such computation or determination shall be made as if such
change in GAAP had not occurred unless Borrower and Lender agree in writing on
an adjustment to such computation or determination to account for such change
in GAAP.





     1.3  Computation of Time Periods.  In this Agreement, in the computation of
a period of time from a specified date to a later specified date, unless
otherwise stated the word “from” means “from and including” and the word “to”
or “until” each means “to but excluding.”





     1.4  Other Definitional Terms.  The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, section, schedule, exhibit and like references are to this Agreement
unless otherwise clearly requires, and “or” has the inclusive meaning
represented by the phrase “and/or.” The singular includes the plural and the
singular.





ARTICLE II

DOCUMENTS DELIVERED HEREWITH



     This Agreement shall include the following documents, all of which shall
be attached hereto and incorporated herein by this reference:






		
	 	(a)  The Note, appropriately completed and duly executed by Borrower.




		
	 	(b)  The Pledge Agreement, duly executed by Borrower and with the
Collateral, with duly executed assignments separate from certificates,
delivered to the Collateral Agent designated therein.




		
	 	Delivery of the forgoing executed documents to Lender and the Collateral
to the Collateral Agent with duly executed Assignments Separate From
Certificates for all of the Collateral is an express condition to
Lender’s obligations herein.





 







 





ARTICLE III

COMMITMENT OF LENDER



     3.1  Loan.






		
	 	     3.1.1  Loan.  Subject to the terms and conditions of this Agreement,
Lender agrees to make a loan to Borrower of up to $2,500,000, to be
advanced in stages with the initial advance (“First Advance”) of
$1,000,000.00 to be made on the later of (i) the date hereof or (ii) the
date on which the conditions in Article II are satisfied and all
restrictions or conditions, including but not limited to any right of
first refusal, for transfer or conveyance to Lender of the Collateral or
shares reserved for the Option are waived, removed or satisfied; the
second advance (“Second Advance”) of $750,000.00 to be made no later than
December 15, 2002, subject to the satisfaction of the requirements set
forth in Section 3.1.2 hereof; and the third advance (“Third Advance”) of
$750,000.00 to be made no later than February 15, 2003, subject to the
satisfaction of the requirements set forth in Section 3.1.3 hereof.
	 
	 	     3.1.2  Second Advance Borrowing Procedure.  Lender shall be obligated
to advance to Borrower, and Borrower shall be obligated to borrow from
Lender, the Second Advance on December 15, 2002, provided all of the
following conditions are satisfied: (i) Borrower has provided to Lender
written evidence satisfactory to Lender that Borrower’s loss from
operations (which shall be determined in a manner consistent with
Borrower’s presentation of such number in its Quarterly Report on Form
10-Q for Borrower’s fiscal quarter ended June 30, 2002) for the period
from October 1, 2002 through November 30, 2002 is no greater than
$515,000; (ii) no Material Adverse Occurrence exists or has occurred;
(iii) each and every representation, warranty and covenant made by
Borrower herein was true on the date made and remains true as of the date
of the Second Advance; and (iv) no event has occurred which constitutes,
or with the passage of time or giving of notice would constitute, an
Event of Default by Borrower herein. Lender may in its discretion waive
the failure of any condition stated above and provide the Second Advance.
	 
	 	     3.1.3  Third Advance Borrowing Procedure.  Lender shall be obligated
to advance to Borrower, and Borrower shall be obligated to borrow from
Lender, the Third Advance on February 15, 2003, provided all of the
following conditions are satisfied: (i) Borrower has provided to Lender
written evidence satisfactory to Lender that Borrower’s loss from
operations (which shall be determined in a manner consistent with
Borrower’s presentation of such number in its Quarterly Report on Form
10-Q for Borrower’s fiscal quarter ended June 30, 2002) for the period
from October 1, 2002 through January 31, 2003 is no greater than
$807,000; (ii) no Material Adverse Occurrence exists or has occurred; and
(iii) each and every representation, warranty and covenant made by
Borrower herein was true on the date made and remains true as of the date
of the Third Advance; and (iv) no event has occurred which constitutes,
or with the passage of time or giving of notice would constitute, an
Event of Default by Borrower herein. To the extent that Borrower does
not satisfy the conditions set forth in Section 3.1.2 above to Lender
making the Second Advance, but satisfies the conditions set forth in this
Section 3.1.3 to Lender making the Third Advance, the amount advanced by
Lender in connection with the Third Advance shall include the amount not
previously advanced by Lender in connection with the Second
Advance. Lender may in its discretion waive the failure of any
condition stated above and provide the Third Advance.
	 
	 	     3.1.4  Borrower Remedies.  In the event of Lender’s breach of its
obligation to make the First Advance on the date required pursuant to
section 3.1.1, or the Second Advance or the Third Advance within ten (10)
days of when required (if required) herein,(i) the Option shall be
terminated, after which date the Option shall be of no further force or
effect, (ii) interest shall cease to accrue or be payable on any amount
outstanding under the Note, (iii) Lender shall forfeit all its rights to
convert any amounts then outstanding under the Note into Borrower’s
common stock, and (iv) any amounts then outstanding under the Note shall
automatically convert into a pro rata amount of shares of the NextNet
Series A Preferred Stock at a price of $6.00 per share (or $2.00 per
common share equivalent) pursuant to Article VI herein. Further, Lender
acknowledges that upon any such occurrence, Borrower shall be
automatically free of its obligations to (x) keep the Collateral, other
than Collateral then subject to conversion under Sections 3.1.2, 3.1.3,
6.1.1 or otherwise for Advances made and outstanding, free from any
encumbrances, (y) keep reserved a sufficient number of shares of its
NextNet Series A Preferred Stock for issuance pursuant to Lender’s
exercise of the Option, or (z) keep reserved a sufficient number of
shares of its common stock for issuance upon any conversion of the Note.
Lender further agrees to execute any and all documents requested by
Borrower evidencing the loss of its rights set forth in (i), (ii), (iii)
and (iv) above. The remedies set forth in this Section 3.1.4 are the sole
and exclusive remedies available for an Event of Default by Lender or any
other breach by Lender of this Loan Agreement, including Lender’s breach
of any obligation to make an Advance to Borrower. Lender shall have no
liability to Borrower or any third party for direct or consequential
damages that may arise or occur as a result of any breach of this
Agreement by Lender, including any failure to make the First Advance,
Second Advance or Third Advance 





 







 




		
	 	hereunder, it being the express agreement
of the parties hereto that the remedies set forth in this paragraph are
the exclusive remedies for any breach by Lender.
	 
	 	     3.1.5  Interest.  The outstanding principal balance of the Note shall
bear interest as provided therein through the Maturity Date. Interest
accrued on Advances made under the Note through the last day of each
calendar month shall be payable on the fifteenth day of the next
succeeding calendar month, as more fully set forth in the Note. Interest
shall cease to accrue following the Maturity Date.
	 
	 	     3.1.6  Repayment of Principal.  Subject to the provisions elsewhere
set forth herein, the outstanding unpaid principal balance of the Note
shall be convertible in full on March 31, 2003.



     3.2  General Terms






		
	 	     3.2.1  Computations.  Interest on the Note shall be computed
utilizing the actual number of days elapsed in a year of 360 days.
	 
	 	     3.2.2  Time and Method of Payments.  All payments and prepayments by
Borrower on the Note shall be made in immediately available funds to
Lender at its office in Minneapolis, Minnesota, not later than 2:00 p.m.
(Minnesota time) on the day such payment is due. Funds received after
such hour shall be deemed to have been received by Lender on the next
Business Day.
	 
	 	     3.2.3  Persons Authorized to Request Advances.  Until otherwise
directed in writing by an Authorized Person, Borrower hereby authorizes
Lender, upon receipt of written instructions from any one of the
Authorized Persons, to make the Second and Third Advances against the
Note in the amounts and on the dates designated by such Authorized
Persons. The list of Authorized Persons may be changed at any time upon
written notice to Lender. Lender may assume, and act upon the
assumption, that any person giving Lender instructions hereunder is the
person he or she purports to be.



     3.3  Option.  Subject to the provisions of Section 3.1.4, Lender shall have the
option (the “Option”), but not the obligation, to purchase from Borrower up to
an additional 250,000 shares of Borrower’s shares of NextNet Series A Preferred
Stock at a price of $6.00 per share. Subject to the provisions of Section
3.1.4, the parties agree and acknowledge that this Option will automatically
expire on April 15, 2003 (the “Expiration Date”). Lender may exercise the
Option in the partial amount of $300,000 for 50,000 shares of Borrower’s shares
of NextNet Series A
Preferred Stock at a price of $6.00 per share ($2.00 per common share
equivalent) at any time on or before the Expiration Date (the “Partial
Exercise”). If Lender timely exercises the Partial Exercise, the Option for
the remaining shares shall be extended to 5:00 p.m. (Minneapolis time) on July
15, 2003. To the extent that Lender exercises this Option or exercises the
Partial Exercise, the parties agree to take reasonable steps to cause a closing
on the sale of any such shares to occur at a mutually convenient time and place
and to deliver such additional documents in connection therewith as shall be,
in good faith, reasonably requested by each party.





     3.4  Representation on Borrower’s Board of Directors.  Upon provision of
the First Advance, Lender shall have the right to appoint one (1)
representative to be a member of the Board of Directors of Borrower.





ARTICLE IV

BORROWER REPRESENTATIONS AND WARRANTIES



     To induce Lender to enter into this Loan Agreement and to make the
Advances, Borrower hereby represents and warrants to Lender that:





     4.1  Corporate Existence.  Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has the requisite power and authority to own its property and to transact the
business in which it is now engaged, and is duly qualified as a foreign
corporation and is in the good standing to do business in the State of
Minnesota and every other jurisdiction in which the nature of its business or
properties makes such qualification necessary, except where the failure to be
so qualified would not have a Material Adverse Occurrence on Borrower.





     4.2  Disclosure.  In connection with the purchase of the Note by Lender,
Borrower has provided Lender with copies the following documents: (i) this
Agreement, including the form of Note; (ii) Borrower’s unaudited financial
statements as of September 30, 2002, are as to be included in Borrower’s next
Form 10-Q in accordance with GAAP on a method consistent with its previous Form
10-K; (ii) Borrower’s Annual Report on Form 10-K for Borrower’s fiscal year
ended December 31, 2001 (the “10-K”); and (iv) copies of all reports and other
documents filed by Borrower with the U.S. Securities and Exchange Commission
since




 







 



April 1, 2002, the date on which Borrower filed the 10-K (all such
materials being collectively referred to herein as the “Disclosure Materials”).
For the purposes hereof, if any such Disclosure Materials are available on the
Securities and Exchange Commission’s EDGAR database or on Borrower’s website
located at www.zambasolutions.com, all such materials shall be deemed to be
provided to Lender for the purposes hereof.





     4.3  Corporate Power and Authority.  Borrower has full corporate power,
right and authority to execute and deliver the Loan Documents, to borrow the
funds herein provided for, and to perform and observe each and all of the
matters and things provided for in said Loan Documents. The execution and
delivery of the Loan Documents and the performance or observance of the terms
thereof have been duly authorized by all necessary Borrower Board of Directors
action and do not contravene or violate any provision of law or any charter or
bylaw provision or any covenant, indenture or agreement of or binding upon
Borrower, nor require the consent or approval of, or registration, filing or
declaration with, any governmental entity or agency thereof. This Agreement and
each of the other Loan Documents, are the legal, valid and binding obligation
of Borrower enforceable against Borrower in accordance with their respective
terms, subject only to bankruptcy, insolvency, reorganization, moratorium or
similar laws at the time in effect affecting the enforceability of rights of
creditors generally.





     4.4  Liens.  Subject to the conditions and restrictions described in
Section 5.7, Borrower has good and marketable title to the Collateral, which is
not subject to any mortgage, pledge, title retention lien, restriction,
condition or other lien, encumbrance or security interest of any kind.





     4.5  Accuracy of Information.  All Disclosure Information heretofore or
contemporaneously furnished by or on behalf of Borrower to Lender for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all other such factual information hereafter furnished by or on behalf
of Borrower to Lender will be, true and accurate in every material respect on
the date as of which such information is dated or certified and not be
incomplete by omitting to state any material fact necessary to make such
information not misleading on such date. If any Disclosure Information provided
to Lender becomes untrue or inaccurate at
any time prior to the time of any Advance to be made hereunder, Borrower
shall promptly (and in any event prior to any future Advance) inform Lender in
writing of all information that has become untrue or inaccurate.





     4.6  Consents, etc.  No consent, approval, authorization of, or
registration, declaration or filing with any governmental authority is required
on the part of Borrower or Nextnet, or if consent, approval, authorization of,
or registration, declaration or filing with any governmental authority is
required, such consent, approval, authorization of, or registration,
declaration or filing has been obtained and provided, in connection with the
execution and delivery of this Agreement or the other Loan Documents or the
performance of or compliance with the terms, provisions and conditions hereof,
other than those which may be required under the Securities Act of 1933, as
amended, or the Exchange Act.





     4.7  Licenses, Permits, Etc.  Borrower owns or possesses all licenses and
permits as are necessary to enable Borrower to conduct it’s business as
presently being conducted and as proposed to be conducted, except for such
conflicts which could not materially and adversely affect the business,
properties, operation or condition, financial or otherwise of Borrower.





     4.8  Litigation.  Except as set forth in Disclosure Schedule 4.8, there
are no suits, actions or proceedings pending, or, to the knowledge of Borrower,
threatened against or affecting the Borrower, which, assert or may assert
claims exceeding in the aggregate $150,000.





     4.9  Absence of Default.  Except as set forth in Disclosure Schedule
4.9, Borrower to the best of Borrower’s knowledge is not in default of a
material provision under any material agreement, instrument, decree or order to
which it is a party or to which it or its property is bound or affected.





     4.10  NextNet Series A Preferred Stock Conversion Rights.  Each share
of Series A Preferred Stock is convertible without cost at any time at the
option of the holder thereof into three shares of the NextNet’s Common Stock
Borrower is currently the registered owner of approximately 1,300,834 shares of
NextNet Series A Preferred Stock. The registration rights described in Section
1 and the right of first offer described in Section 2.6 of that Amended and
Restated Investors’ Rights Agreement dated July 10, 2000, are appurtenant to
the NextNet Series A Preferred Shares and are automatically assigned and
transferred with such Shares subject to the conditions stated in the Amended
and Restated Investor’s Rights Agreement.





     That Second Amended and Restated Certificate of Incorporation of NextNet
Wireless, Inc, dated July 7, 2000, a copy of which has been provided by
Borrower to Lender, is the current Certificate of Incorporation of NextNet
Wireless, Inc. and there have been no amendments or modifications to said
Certificate.





 







 


     4.11  No Restrictions on Transferability of Collateral.  There is no
condition, restriction, rights of first refusal, prior option or condition
which would in any way limit, delay or condition the transfer, assignment or
conveyance of all or part of the Collateral to Lender upon any event of
conversion of Advances to Series A Preferred Stock under this Agreement, or if
any such condition, restriction, right of first refusal, option or condition
does exist, Borrower has obtained any waiver or termination necessary to permit
conversion of Advances to Series A Preferred Stock under this Agreement free of
any condition, restriction, right of first refusal, prior option or condition.





     4.12  Reservation of Conversion Securities.  Subject to the provisions of
Section 3.1.4 above and Section 5.4 below, the shares of the Company’s common
stock issuable upon conversion of the Note will, at all times while the Note
remains outstanding and unpaid, be reserved for issuance and, when issued and
delivered in accordance with the terms thereof, will be duly authorized,
validly issued, fully paid and non-assessable and shall be free of any pledges,
liens, encumbrances and restrictions. Borrower shall reserve for Lender an
aggregate of 1,083,333 shares of its NextNet Series A Preferred Stock to
fulfill its obligations hereunder, including, but not limited to, the issuance
of the Conversion Securities and the issuance of shares upon exercise of the
Option.





     4.13  No Event of Default by Borrower.  No condition, event or occurrence
exists which with the passage of time or giving of notice would constitute an
Event of Default by Borrower pursuant to Section 9.1 of this Agreement.





ARTICLE V

LENDER REPRESENTATIONS AND WARRANTIES AND COVENANTS



     To induce Borrower to enter into this Loan Agreement and to accept the
Advances, Lender hereby represents and warrants to Borrower that:





     5.1  Corporate Existence.  Lender is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, has the
requisite power and authority to own its property and to transact the business
in which it is now engaged.





     5.2  Corporate Power and Authority.  Lender has full corporate power, right
and authority to execute and deliver the Loan Documents, to loan the funds
herein provided for, and to perform and observe each and all of the matters and
things provided for in said Loan Documents. Lender was not organized for the
purpose of purchasing the Note or making an investment in the Conversion
Securities. The execution and delivery of the Loan Documents and the
performance or observance of the terms thereof have been duly authorized by all
necessary Lender Board of Directors action and do not contravene or violate any
provision of law or any charter or bylaw provision or any covenant, indenture
or agreement of or binding upon Lender.





     5.3  Validity of Obligations.  This Agreement and each of the other Loan
Documents, are the legal, valid and binding obligation of Lender enforceable
against Lender in accordance with their respective terms, subject only to
bankruptcy, insolvency, reorganization, moratorium or similar laws at the time
in effect affecting the enforceability of rights of creditors generally.





     5.4  Investment Intent.  The Note being entered into by Lender is being
purchased for investment for its own account and not with the view to, or for
resale in connection with, any distribution or public offering thereof. Lender
understands that neither the Note nor any Conversion Securities issuable upon
conversion thereof have been registered under the Act or any state securities
laws by reason of their contemplated issuance in transactions exempt from the
registration requirements of the Act and applicable state securities laws, and
that the reliance of Borrower upon these exemptions is predicated in part upon
this representation by Lender. Lender further acknowledges that the Note, and
the Conversion Securities issuable upon conversion thereof, may not be
transferred or resold without (i) registration under the Act and any applicable
state securities laws, or (ii) an exemption from the requirements of the Act
and applicable state securities laws. Lender acknowledges that any conversion
by it of the Note into Conversion Securities involves a highly speculative
investment and a high degree of risk. Lender acknowledges that it may not ever
be able to resell any of the Conversion Securities into which the Note may be
converted, whether at the applicable conversion price or otherwise. Neither
Borrower nor NextNet has any obligation to register any of the Conversion
Securities for resale under the Act or any applicable state securities laws, or
to take any other action which would facilitate the availability of federal or
state registration exemptions in connection with any resale of such shares.





     5.5  Residence, Qualification as an Accredited Investor, etc.  Lender’s
principal place of business is at the address set forth in Section 10.3 hereof.
Lender is an “accredited investor,” as that term is defined in Section 501(a)
of the rules and regulations promulgated under the Act. In connection with its
purchase of the Note, Lender acknowledges that it has made an independent due
diligence investigation of Borrower and that Borrower has made available to
Lender at a reasonable time prior to the execution of this Agreement the
opportunity to ask questions and receive answers concerning the business and
affairs of Lender and the terms and conditions of the sale of the Note
contemplated by this Agreement and to obtain any additional information (other
than the




 







 



Disclosure Materials which Lender possesses or can acquire without
unreasonable effort or expense) as may be necessary to verify the accuracy of
information furnished to Lender. Lender (a) is able to bear the loss of its
entire investment in the Note without any material adverse effect on its
business, operations or prospects, (b) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investment to be made by it pursuant to this Agreement, (c)
realizes that Borrower has a significant need for additional financing and
without such additional financing may be unable to continue operations or repay
the Note when due, (d) realizes that an investment in Borrower is highly
speculative and subject to significant risks including, without limitation,
those risks identified in the Disclosure Materials, and (e) acknowledges that
it has made its own independent investigation of Borrower’s business and
properties and that its decision to purchase the Note was not based upon its
reliance on any information which may been provided by Borrower, other than
the
Disclosure Materials, including, but not limited to, Borrower’s officers,
directors, employees, agents and other representatives.





     5.6  NextNet’s Business.  Lender has been provided with or given access to
such information concerning NextNet, including, but not limited to, its
business, financial condition and prospects (collectively, “NextNet’s
Business”), as Lender has requested and/or deems necessary and has utilized
such information to Lender’s satisfaction for the purpose of agreeing to enter
into the Note. Lender hereby acknowledges that it has made its own independent
investigation of NextNet’s Business and that it is not relying on any
information which may been provided by Borrower, including, but not limited to,
Borrower’s officers, directors, employees, agents and other representatives, in
connection with its agreement to enter into the Note.





     5.7  Nondistribution; NextNet Agreements.  Lender agrees and covenants that
it will not sell or otherwise distribute or pledge in any manner any Conversion
Securities other than in accordance with applicable state and federal
securities laws, which may, if requested by Borrower and/or NextNet, require
the delivery by Lender to Borrower of an opinion of Lender’s legal counsel
that any such sale, distribution or pledge is exempt from the applicable
provisions of such laws.





     In any event, Lender hereby hold any Conversion Securities which consist
of shares of NextNet Series A Preferred Stock in accordance with and subject to
the terms of the Right of First Refusal Agreement dated as of September 21,
1998, among Borrower, NextNet and the Series B purchasers identified therein.
Lender agrees to be bound by the transfer restrictions related to the NextNet
Series A Preferred Stock that are described in Section 3.6 of the Series A
Preferred Stock Purchase Agreement dated as of September 21, 1998, between
Borrower and NextNet (the “Series A Agreement”). Borrower represents that if
Lender acquires at least 375,000 shares of NextNet Series A Preferred Stock
pursuant to this Agreement, the shares of NextNet Series A Preferred Stock will
be afforded the registration rights described in Section 1 and the right of
first offer described in Section 2.6 of that Investor’s Rights Agreement dated
July 10, 2000 among Borrower, NextNet and the investors and founders identified
therein. Lender and Borrower acknowledge and agree that any of Borrower’s
shares of NextNet Series A Preferred Stock acquired hereunder shall continue to
be subject to the obligations of, and shall have the benefits and rights in,
the terms and conditions of the Series A Agreement, the Investors” Rights
Agreement, and the Voting Agreement dated July 10, 2000 by and among NextNet,
Borrower and others, except for the provisions of those Agreements that by
their nature are not transferable or assignable to Lender.





     5.8  Nonassignment.  Lender covenants and agrees that it shall not assign
any of its rights or delegate any of its duties set forth hereunder to any
third party, whether voluntarily, through operation of law or otherwise, except
Lender may subject to Section 5.7 and 5.4 sell any Conversion Securities and
shares acquired pursuant to exercise of Option.





     5.9  Voting of NextNet Series A Preferred Stock.  Until such time as
Borrower beneficially holds fewer than 100,000 shares of NextNet Series A
Preferred Stock, Lender agrees to vote or act with respect to any of its shares
of NextNet Series A Preferred Stock so as to elect the nominee of Borrower to
be the representative of the Series A shareholders on the NextNet Board of
Directors.





ARTICLE VI

CONVERSION OF NOTE



     6.1  NextNet Conversion.






		
	 	     6.1.1  At Lender’s option, any time on or before March 31, 2003, Lender
may convert all or part of the outstanding Advances under the Note into
shares of NextNet Series A Preferred Stock owned by Borrower, or if such
Series A Preferred Stock has been converted into common stock of NextNet,
such NextNet common stock. Initially, the conversion rate (the “NextNet
Conversion Rate”) of such shares shall be the equivalent of one share of
NextNet Series A Preferred Stock or three shares of Common Stock for each
$6.00 of principal amount of the Note ($2.00 per common share
equivalent), subject to adjustment as set forth herein. The NextNet
Conversion Rate shall be adjusted prior to each conversion to equal the
lowest per share common equivalent price for any sale by Borrower or
NextNet subsequent to the date of this Agreement to a purchaser other
than Lender or persons or entities associated or
affiliated with Lender of 





 







 




		
	 	NextNet securities at a common per share
equivalent price of less than $2.00 prior to the time the notice of
conversion is given, to the extent the aggregate amount of the
transaction or transactions prior to the affected conversion exceed
$100,000.00. Issuances of securities pursuant to employee stock options
and benefit plans and the issuance of any security pursuant to an
existing warrant or option shall not cause an adjustment. The NextNet
Conversion Rate for a conversion of Advances pursuant to this Section
6.1.1 shall not be adjusted for sales made subsequent to the affected
conversion.
	 
	 	     6.1.2  In case NextNet shall at any time exchange as a whole, by
subdivision or combination in any manner or by the making of a stock
split or stock dividend, the number of common shares or Series A
Preferred Shares then outstanding into a different number of shares, with
or without par value, thereafter the number of common equivalent shares
or Series A Preferred Shares into which the principal balance of the Note
is convertible (calculated immediately prior to such change), shall be
increased or decreased, as the case may be, in direct proportion to the
increase or decrease in the number of common shares or Series A Preferred
Shares of NextNet by reason of such change.
	 
	 	     6.1.3  In case of any reclassification or change of outstanding
common shares of NextNet (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result
of a subdivision, combination or stock dividend as provided for in
Section 6.1.2), or in case of any consolidation of NextNet with, or
merger of the NextNet into, another corporation, or in case of any sale
of all, or substantially all, of the property, assets, business and
goodwill of NextNet as an entirety, the principal balance of the Note
shall be convertible into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification,
change, consolidation, merger or sale by a holder of a common share of
NextNet, adjusted for the NextNet Conversion Rate in effect immediately
prior to such reclassification, change, consolidation, merger or sale or
any further adjustment pursuant to Section 6.1.2 above.



     6.2  Zamba Conversion.






		
	 	     6.2.1  Provided that Lender had theretofore made all required
Advances, and at Lender’s option any time on or before March 31, 2003,
Lender may convert all outstanding Advances under the Note into that
number of Borrower’s shares of common capital stock sufficient to cause
Lender to own 20% of all of Borrower’s issued and outstanding common
stock immediately after such conversion. Such conversion may occur only
if the following conditions are met: (i) Lender has disposed of its
Metalclad Insulation Corporation operations and obligations in a manner
that is satisfactory to the Board of Directors of Borrower in its
reasonable discretion (which discretion may include an analysis of
continuing contingent liabilities resulting from the ownership of such
operations) and (ii) Lender has cash and reasonably liquid assets of
$7,500,000, less all Advances made through the date of conversion, as
determined by the Chief Financial Officer of Zamba, in his reasonable
discretion.
	 
	 	     In case of any reclassification or change of outstanding common
shares of Borrower (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision, combination or stock dividend), or in case of any
consolidation of Borrower with, or merger of Borrower into, another
corporation, or in case of any sale of all, or substantially all, of the
property, assets, business and goodwill of Borrower as an entirety,
subject to the provisions set forth above in Section 6.2.1, the principal
balance of the Note shall be convertible into the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger or sale by a holder of a
common share of Borrower.



     6.3  Conversion Procedures.






		
	 	     6.3.1  Borrower shall on the date hereof deliver to Collateral Agent
pursuant to the Pledge Agreement a stock certificate or certificates
representing 833,333 shares of Series A Preferred Stock of NextNet, said
certificate(s) to be duly endorsed in blank or accompanied by
Assignment(s) Separate from Certificate(s) duly endorsed in blank. If
Lender desires to convert the Note in accordance with the terms hereof,
Lender shall surrender the Note to Collateral Agent, or, if the Note has
been lost, stolen, destroyed or mutilated, then, in the case of loss,
theft or destruction, Lender shall deliver to Collateral Agent an
indemnity agreement reasonably satisfactory in form and substance to
Borrower, or, in the case of mutilation, Lender shall surrender to
Collateral Agent and cancel the Note.
	 
	 	     If Lender elects to convert to Borrower shares, Borrower shall,
subject to the provisions elsewhere set forth herein, issue and deliver
or cause to be issued and delivered to Lender at its address set forth
below a certificate or certificates for the number of Borrower’s common
stock to which Lender shall be entitled upon such conversion (bearing
such legends as are reasonably required by Borrower’s counsel). If Lender
elects to convert to NextNet shares, the Collateral Agent shall deliver
to NextNet’s transfer agent the NextNet certificate(s) duly endorsed or
with appropriate Assignment(s) Separate From Certificates(s) with
instructions to issue and deliver certificates for the appropriate number
of NextNet shares to Lender 





 







 




		
	 	and the balance of the shares to be issued in
a certificate to Borrower, provided however, said certificate of
Borrower is to be returned and held by Collateral Agent pursuant to the
terms of the Pledge Agreement.
	 
	 	     On April 1, 2003, the Collateral Agent shall return to Borrower all
shares of Collateral except, and Collateral Agent shall retain, a
certificate or certificates for 250,000 shares of Series A Preferred
Stock On August 31, 2003, Collateral still in the possession of
Collateral Agent shall be returned to Borrower.
	 
	 	     6.3.2  No fractional shares shall be issued upon conversion of the
Note. In lieu of Borrower issuing any fractional shares to Lender upon
the conversion of the Note, Borrower shall pay or cause to be paid to
Lender an amount equal to the product obtained by multiplying the
applicable conversion rate by the fraction of a share not issued pursuant
to the previous sentence. Upon conversion of the Note in full, Borrower
shall be forever released from all its obligations and liabilities under
the Note.



ARTICLE VII

AFFIRMATIVE COVENANTS



Borrower hereby covenants and agrees with Lender that for so long as any amount
remains unpaid on the Note and for so long as Lender has any obligation to make
advances thereunder, Borrower will, unless Lender shall otherwise consent in
writing:





     7.1  Maintain Collateral.  Keep the Collateral free of any mortgage,
pledge, title retention lien, or other lien, encumbrance or security interest
of any kind.





     7.2  Exchange Act Reports.  Continue to timely file all reports required to
be filed by it under and pursuant to the Exchange Act.





     7.3  Access to Records.  Subject to the execution by Lender or any of its
agents or representatives of a customary confidentiality agreement, at any
reasonable time and from time to time, upon reasonable notice and during normal
business hours, permit Lender or any agent or representative thereof, to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, Borrower, and to discuss the affairs,
finances, and accounts of Borrower with any of its officers and directors.





     7.4  Taxes, Assessments and Charges.  Promptly pay over to the appropriate
authorities all sums for taxes deducted and withheld from wages as well as the
employer’s contributions relating thereto and promptly pay all taxes,
assessments and other governmental charges imposed upon or asserted against
Borrower’s income, profits, properties and activities and all claims for labor,
materials, supplies, rental charges or otherwise which are or might become a
lien charged upon Borrower’s properties, unless the same are being contested in
good faith by appropriate proceedings and adequate reserves shall have been
established on Borrower’s books with respect hereto.





     7.5  Existence.  Preserve and maintain its corporate existence and good
standing in the jurisdiction of its incorporation and continue in compliance in
all material respects with all applicable statutes, laws, rules and
regulations.





     7.6  Conduct of Business.  Continue to engage in a business of the same
general type as that now being conducted by Borrower on the date of this
Agreement, provided, however, that nothing contained in this Section shall
prevent Borrower from discontinuing any part of the business of Borrower, if
the discontinuance is, in the opinion of the Board of Directors of Borrower, in
the best interests of Borrower.





ARTICLE VIII

NEGATIVE COVENANTS



     Borrower hereby covenants and agrees with Lender that so long as any
amount shall remain unpaid on any indebtedness of Borrower to Lender or Lender
has any obligation to make advances hereunder, Borrower will not, without the
written consent of Lender, create, assume, incur or suffer to exist any pledge,
mortgage, assignment or other lien or encumbrance of any kind, or upon any of
the Collateral.





ARTICLE IX

EVENTS OF DEFAULT





 







 




     9.1  Events
of Default by Borrower The occurrence of any one or more of the
following events shall constitute an “Event of Default by Borrower:”






		
	 	     9.1.1  Failure of Borrower to make any payment when due of interest
on the Note, provided that Borrower shall have fifteen (15) days from
the date on which it receives written notice from Lender of any such
nonpayment of interest to make such interest payment; or
	 
	 	     9.1.2  Any material representation by Borrower herein is untrue as of
the date made or Borrower defaults in the due performance and observance
of any covenants in this Agreement and such default continues for a
period of thirty (30) days after written notice from Lender.
	 
	 	     9.1.3  On or prior to the Maturity Date, Borrower applies for,
consents to, or acquiesces in the appointment of trustee or receiver of
Borrower, or its property; or, in the absence of such application,
consent or acquiescence, a trustee or receiver is appointed for Borrower,
or for a substantial part of its property; or any bankruptcy,
reorganization, debt arrangement or other proceedings under any
bankruptcy or insolvency law is instituted by or against Borrower; or
	 
	 	     9.1.4  On or prior to the Maturity Date, any dissolution or
liquidation proceeding is instituted by or against Borrower; or
	 
	 	     9.1.5  Judgments against Borrower for the payment of money totaling
in excess of $10,000,000.00 shall be outstanding for a period of ninety
(90) days without a stay of execution.



     9.2  Lender’s Remedies  If any Event of Default by Borrower shall occur as a
result of any of the events described in Section 9.1 above (taking into account
the applicable cure period set forth above), any amounts then outstanding under
the Note, including accrued interest, shall be converted into Borrower’s shares
of NextNet Series A Preferred Stock at the conversion price of $3.00 per share
($1.00 per common share equivalent), unless at such time, there is also an
Event of Default by Lender (as defined below), in which case all amounts then
outstanding under the Note, including accrued interest, shall be converted into
Borrower’s shares of NextNet Series A Preferred Stock at the conversion price
of $6.00 per share ($2.00 per common share equivalent), after either of which
the obligations required in this Agreement or any other Loan Document to be
performed by Borrower, other than to have registered in Lender’s name and to
deliver to Lender those shares of NextNet Series A Preferred Stock which are
transferable to Lender as a result of such Event of Default by Borrower or
Lender’s exercise of the Option, shall automatically terminate and be of no
further force or effect, provided that if an Event of Default by Borrower
occurs prior to Lender’s making the Second or Third Advance, Lender shall not
be required to make any such advance. Provided Lender receives NextNet Series
A Preferred Stock in accordance with the foregoing remedy, such remedy shall be
Lender’s sole remedy for an Event of Default by Borrower described in Sections
9.1.1, 9.1.3, 9.1.4 and 9.1.5.





     9.3  Event of Default by Lender.  For the purposes hereof, any failure by
Lender to make any Advance if and when due shall constitute an Event of Default
by Lender.





ARTICLE X

MISCELLANEOUS



     10.1  Binding Effect.  The parties hereto agree that this Agreement shall
be binding upon and inure to the benefit of their respective successors in
interest and assigns including any holder of the Note; provided however, that
Borrower may not assign or transfer its interest hereunder without the prior
written consent of Lender.





     10.2  Governing Law.  This Agreement and the rights and obligations of the
parties hereunder and under the Note and any other documents delivered herewith
shall be interpreted and construed in accordance with and governed by the laws
of the State of Minnesota.





     10.3  Notices.  Unless and until notified otherwise in writing, any and all
notices and other communications required or permitted under this Agreement
shall be effectively delivered for all purposes, if delivered personally or by
telecopier, upon the date delivered or the telecopied message is received, or
if mailed, three (3) Business Days after deposit in the United States mail,
first class postage prepaid properly addresses to the parties at the addresses
set forth below:





 







 



	 	 	 
	If to Borrower:	 	
Zamba Corporation
	 	 	
3033 Excelsior Boulevard
	 	 	
Suite 200
	 	 	
Minneapolis, Minnesota 55416
	 	 	
Attention: Norm Smith, Chief Executive Officer
	 	 	
Facsimile: (952) 893-3948
	 	 	 
	with a copy to:	 	
Ian Nemerov, Esq.
	 	 	
General Counsel
	 	 	
Zamba Corporation
	 	 	
3033 Excelsior Boulevard
	 	 	
Suite 200
	 	 	
Minneapolis, Minnesota 55416
	 	 	
Facsimile: (952) 893-3935
	 	 	 
	If to Lender:	 	
Entrx Corporation
	 	 	
800 Nicollet Mall
	 	 	
Suite 2690
	 	 	
Minneapolis, Minnesota 55402
	 	 	
Attention: Wayne W. Mills, Chief Executive Officer
	 	 	
Facsimile: (612) 338-7332
	 	 	 
	with a copy to:	 	
Roger Frommelt, Esq.
	 	 	
Felhaber, Larson, Fenlon & Vogt
	 	 	
225 S. Sixth Street
	 	 	
Suite 4200
	 	 	
Minneapolis, Minnesota 55402
	 	 	
Facsimile: (612) 338-4608



     10.4  No Waivers.  No failure or delay on the part of Lender in exercising
any right, power or privilege hereunder and no course of dealing between
Borrower and Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.





     10.5  Headings.  The headings of various sections of this Agreement have
been inserted for reference only and shall not be deemed to be a part of this
Agreement.





     10.6  Amendment and Waiver.  Neither this Agreement nor any provision
hereof may be modified, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.





     10.7  Time of the Essence.  The parties hereto agree that time shall be of
the essence when determining their respective obligations hereunder.





     10.8  Confidentiality.  Lender and Borrower hereby acknowledge each other’s
status as a public company. Further Lender and Borrower, together with their
respective Representatives (as defined below) acknowledge that each may, from
time to time, be provided with confidential information that Borrower or Lender
has not otherwise disclosed publicly. Regardless, Lender, on behalf of itself
and it’s Representatives, and Borrower on behalf of itself and it’s
Representatives, agrees to hold all information, whether financial or
otherwise, disclosed to it or them by other pursuant to the terms hereof
strictly confidential and to not disclose such information to anyone, other
than their respective representatives and advisors (collectively,
“Representatives”) who have a need to know such information, provided that
prior to any such disclosure, the disclosing party makes all such persons aware
of its confidentiality obligations set forth herein. Further, Lender, on
behalf of itself and it’s Representatives, and Borrower, on behalf of itself
and it’s Representatives, acknowledges that by virtue of its and their receipt
and possession of such information, it and they may be prohibited from, among
other things, engaging in purchases or sales of Borrower’s and Lender’s
securities.





     10.9  Limited Recourse.  Borrower’s and Lender’s liabilities are limited
as provided in Sections 3.1.4 and 9.2 herein.





 







 


     IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be executed and delivered the date and year first above written.






	 	ZAMBA CORPORATION,

a Delaware corporation








	 	By /s/ Michael H. Carrel
   Name:
[Michael H. Carrel ]
   Title:
[CFO ]








	 	ENTRX CORPORATION,

a Delaware corporation








	 	By /s/ Kenneth W. Brimmer
   Name:
[Kenneth W. Brimmer ]
   Title:
[Chairman ]