Document:

FY2000 10K Ex10.59

Exhibit 10.59

 

Schedule of Convertible Promissory Notes

Issued in Connection with Convertible Secured Debt
Financing

 

 

Date of	Name of				Date of
Note	Holder		Amount		Repayment

12/01/00	GSI Ventures, LLC	400,000		January 5, 2002

12/08/00	GSI Ventures, LLC	100,000		January 5, 2002

12/13/00	GSI Ventures, LLC	100,000		January 5, 2002

12/15/00	GSI Ventures, LLC	100,000		January 5, 2002

02/08/01	GSI Ventures, LLC	  70,000		January 5, 2002FY2000 10K Ex10.60

Exhibit 10.60

LOAN AGREEMENT

THIS LOAN AGREEMENT ("Agreement")
is made by and among THE SHAAR FUND LTD. ("Lender"),
POPMAIL.COM, INC., a Minnesota corporation (the
"Borrower"), SDK INVESTMENTS, INC., an Ohio corporation
("SDKI"), POPMAIL NETWORKS, INC., a Texas corporation
("PNI"), FAN ASYLUM, INC., a California corporation ("FAI")
and CAFÉ ODYSSEY, LLC, a Minnesota limited liability company
("COL") this 21st day of December, 2000.

RECITALS

A.Lender has agreed to loan Borrower up to the
principal amount of $200,000.

B.Borrower has agreed to borrow up to $200,000  from
Lender.  

C.SDKI has acted as a finder in connection with the
loan to be made by Lender to Borrower and, as a result, Borrower has agreed to
pay SDKI a finder's fee consisting of cash and a warrant to purchase Borrower's
common stock.  

D.PNI, FAI and COL are wholly owned subsidiaries of
Borrower and will materially benefit from the loan Borrower will receive from
Lender.

E.As a condition to Lender making a loan to Borrower,
Lender requires PNI, FAI and COL to execute this Agreement and be bound by
certain terms of this Agreement.

IN CONSIDERATION of the premises, the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, Lender, Borrower PNI, FAI, COL, and SDKI hereby covenant and agree
as follows:  

ARTICLE I

THE LOAN

	Agreement to Borrow and Lend.  Subject
to all of the terms, provisions, conditions, covenants and agreements contained
in this Agreement, Lender agrees to make a loan to Borrower (the
"Loan") in the principal amount of Two Hundred Thousand Dollars
($200,000) (the "Loan Proceeds"), which shall be used in
accordance with the terms set forth herein.  

	Closing.  The Loan Proceeds shall be distributed
at one closing which shall occur on December 21, 2000, or on such other date as
the parties shall agree (the "Closing").   

	Convertible Promissory Note.  The Loan will be
evidenced by a convertible promissory note (the "Note") in the
form attached hereto as Exhibit A that will be executed by Borrower and
delivered to Lender.  

	Interest.  The outstanding principal balance of
the Note shall bear interest at a rate of Twelve Percent (12%) per annum as set
forth in the Note. 

	Payment Terms.  Accrued interest under the
Note shall be due and payable in quarterly installments on February 1, 2001, May
1, 2001, August 1, 2001 and November 1, 2001 and the entire outstanding
principal balance of the Loan, together with all accrued but unpaid interest
thereon, shall be due and payable in full on January 5, 2002 (the
"Maturity Date"). Notwithstanding anything to the contrary
contained herein, upon Lender's consent, which shall be made in its sole and
absolute discretion, Borrower may pay any portion of the quarterly installments
of accrued interest of the Loan with shares of Borrower's common stock, par
value $.01 per share (the "Common Stock").  The value of the
Common Stock used to pay any quarterly installments of accrued interest shall be
determined by the closing sale price of the Common Stock as reported by Nasdaq
on the preceding trading day before the quarterly installment is paid.

	Conversion Right.  The Lender shall have the right
to convert all or any portion of the debt evidenced by the Note into Borrower's
Common Stock in accordance with the terms of the Note.

ARTICLE II

WARRANTS TO PURCHASE COMMON STOCK

2.1.Warrant to Purchase Common Stock to
Lender.  The Borrower hereby agrees to issue to Lender as a part of
the consideration for Lender making the Loan to Borrower, a warrant to purchase
the number of shares of Common Stock equal to fifty percent (50%) of the
aggregate face value of the Note and in the form attached hereto as Exhibit
B (the "Lender Warrant"). 

	Warrant to Purchase Common Stock to SDKI.
As partial consideration for introducing the Borrower to the Lender, the
Borrower hereby agrees to issue to SDKI a warrant to purchase the number of
shares of Common Stock equal to ten percent (10%) of the aggregate face value of
each Note and in the form attached hereto as Exhibit C ("SDKI
Warrant" and together with the Lender Warrant, the
"Warrants").  

	Share Calculation For Warrants; Strike Price;
Issuance.  For purposes only of determining the number of shares which shall
be granted upon exercise of the Warrants, the Common Stock shall be deemed to
have a value of $1.00 per share.  The strike price for each Lender Warrant shall
be 120% of the Market Price (as that term is defined in the Note), and the
strike price for each SDKI Warrant shall be the Market Price.  The Borrower
shall issue the Warrant at the Closing.  The Warrants shall be exercisable for a
period of at least five years.

ARTICLE III

BORROWER'S REPRESENTATIONS AND WARRANTIES

The Borrower hereby represents and warrants to
Lender that the following are true and correct as of the date hereof and shall
be true and correct as of the date of the Closing and shall remain true and
correct during the term of all of the Loan Documents (as defined below):  

3.1Borrower and each of its subsidiaries and affiliates
(a) is a duly organized and validly existing corporation in good standing under
the laws of the jurisdiction of its formation, (b) has the power and authority
and the legal right to own its property and assets and to transact the business
in which it is engaged and (c) is duly qualified as a foreign corporation  or
otherwise licensed and authorized to transact business and in good standing in
each jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification and where the failure to be
so qualified, licensed or authorized would have a material adverse effect on the
condition (financial or otherwise), prospects, assets or properties of Borrower,
any subsidiary or affiliate. All subsidiaries and affiliates of the Borrower are
listed on Item 3.1 of the Disclosure Schedule.  The term
"affiliate" shall have the meaning ascribed thereto under Rule 12b-2
promulgated under the Exchange Act of 1934, as amended.

 
3.2  The execution, delivery and performance of this Agreement, the Note and
the Warrants and any and all other security agreements, pledge agreements,
financing statements, certificates or instruments contemplated herein
(collectively "Loan Documents") executed and delivered by the
Borrower or its affiliates have been authorized by all necessary corporate
actions and do not and will not contravene any legal or contractual restriction
binding on the Borrower or any of its property or its assets.

3.3  The Borrower and each of its subsidiaries and affiliates has the power
to take all actions contemplated hereby (including but not limited to the
issuance of the Warrants and Note, the right of first refusal granted to Lender
to participate in any security issuances and the granting of the security
interests in the Collateral (as defined below)) to execute, deliver and carry
out the terms and provisions of each Loan Document to which it is a party and
has taken all necessary actions to authorize the execution, delivery and
performance by it of each Loan Document to which it is a party and all acts
contemplated hereby. The Loan Documents when executed and delivered by the
Borrower and its subsidiaries and affiliates will constitute the legal, valid
and binding obligation of the Borrower and its subsidiaries and affiliates (as
the case may be) and is, or will be upon execution, enforceable against the
Borrower and its subsidiaries and affiliates (as the case may be) in accordance
with their respective terms, except to the extent that enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting creditors' rights generally.  

3.4  The execution, delivery or performance by the Borrower and its
subsidiaries and affiliates of each Loan Document, and compliance by the
Borrower and its subsidiaries and affiliates with the terms and provisions
hereof and thereof, (a) do not contravene any provision of any law, statute,
rule or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Borrower, any subsidiary or
affiliate, (b) do not conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
lien (other than as contemplated by the Loan Documents) upon any of the property
or assets of the Borrower, any subsidiary or affiliate pursuant to the terms of
any material indenture, mortgage, deed of trust, credit agreement, loan
agreement or other agreement, contract or instrument to which the Borrower, any
subsidiary or affiliate is a party or by which the Borrower, any subsidiary or
affiliate or any of their respective properties or assets is bound or to which
the Borrower, any subsidiary or affiliate may be subject and (c) do no violate
any provision of the Certificate of Incorporation, Articles of Organization,
operating agreement, bylaws or regulations of the Borrower, any subsidiary and
affiliate. 

3.5  The authorization, issuance, sale and delivery of the shares of Common
Stock issuable upon conversion of the Note and upon exercise of the Warrants has
been duly authorized by all requisite corporate action on the part of the
Borrower.  The shares of the Common Stock issuable upon conversion of the Note
and upon exercise of the Warrants upon their issuance in accordance with the
Note and the Warrants, respectively, will be validly issued, fully paid and
nonassessable.  Any shares of Common Stock issued in accordance with the terms
of the Note for payment of quarterly installments of acquired interest will be
validly issued, fully paid and nonassessable.

3.6  Except as disclosed in Schedule 3.6, there are no actions, suits or
proceedings pending or, to the  knowledge of the Borrower, threatened against
Borrower, any subsidiary  or affiliate  (a) with respect to the Loan Documents,
any of the Collateral (as defined below) or the transactions contemplated hereby
or (b) that are, either individually or in the aggregate, reasonably likely to
have a material adverse effect on the condition (financial or otherwise),
prospects, assets or properties of Borrower, any subsidiary or affiliate.

3.7  All balance sheets, income statements, financial statements, operating
statements and other financial data pertaining to Borrower or its subsidiaries
or affiliates (the "Financial Information") that have been
delivered (or will be delivered) to Lender by or on behalf of Borrower are or
will be accurate and complete in all material respects, are or will be in
accordance with the books and records of Borrower and its subsidiaries and
affiliates, and accurately present or will present the financial condition,
results of operations and changes in financial position of the person or entity
to which they pertain as of their respective dates and there has been no
material change with respect thereto.  All Financial Information delivered to
Lender is and shall be prepared in accordance with the generally accepted
accounting principles, consistently applied.

3.8  None of the Borrower's reports and documents heretofore filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, contained at the
time they were filed  any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

3.9  The Borrower and its subsidiaries and affiliates own and
possess adequate and enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks, logos,
copyrights, copyright applications, licenses, inventions, software, programs,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) and other
similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of their respective
businesses.  Borrower and its subsidiaries and affiliates have the unrestricted
right to use all of the Intangibles.  Borrower and its subsidiaries and
affiliates are not infringing upon or in conflict with any right of any other
person or entity with respect to any Intangibles and the Borrower and its
subsidiaries and affiliates are not subject to any outstanding order, decree,
judgment or stipulation with respect to the Intangibles.  No proceedings have
been instituted or are pending or, to Borrower's knowledge, threatened which
challenge the validity or rights of Borrower or its subsidiaries and affiliates
to any of the Intangibles, and Borrower has no knowledge of any infringement by
others of any of the Intangibles.  All of the Intangibles are valid, enforceable
and free and clear of any attachments or liens and all claims, restrictions and
demands of any other person, firm or corporation, including attorneys' fees for
past services, expenses and government fees.  None of the past or present
employees, officers, directors, or shareholders of Borrower, any subsidiary or
affiliate has any rights in any Intangibles.  Borrower and its subsidiaries and
affiliates have not granted any outstanding license or other rights to any of
the Intangibles, except those licenses granted in the ordinary course of
business, and are not liable, and have not made any contract or arrangement
whereby they may become liable, to any person for any royalty or other
compensation for the use of any Intangibles.  The trade secrets and processes
and procedures of Borrower and its subsidiaries and affiliates which are
necessary to the operation of Borrower and its subsidiaries and affiliates have
been reduced to writing, to the extent practical, and will remain available for
use by Borrower and its subsidiaries and affiliates after the date of the
Closing. 

3.10All factual information heretofore or
contemporaneously furnished by the Borrower, any subsidiary or affiliate to
Lender (including, without limitation, all information contained in this
Agreement) for purposes of this Agreement or any transaction contemplated hereby
or thereby is, and all other such factual information hereafter furnished by the
Borrower, any subsidiary or affiliate to Lender for purposes of this Agreement
or any transaction contemplated herein will be, true and accurate in all
material respects on the date as of which such information is given and the
Borrower in good faith believes such information is not incomplete by omitting
to state any fact necessary to make such information not misleading at such time
in light of the circumstances under which such information was provided.

3.11  The Borrower, each subsidiary and affiliate has filed all tax
returns required to be filed by it and has paid all income and franchise taxes
payable by it which have become due pursuant to such tax returns and all other
taxes and assessments payable by it which have become due, other than those not
yet delinquent and except for those contested in good faith and by appropriate
proceedings. The amounts shown on those tax returns fairly present the tax
position of the Borrower and such subsidiaries and the Borrower does not expect
any material adjustments or any amounts shown on such tax returns. Each of the
Borrower and each subsidiary or affiliate has paid, or has provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all foreign, federal and state income and franchise taxes applicable
for all prior fiscal years of the Borrower and for the current fiscal year to
the date hereof. As of the date hereof, no tax lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any tax,
fee or other charge.

3.12  All employee benefit plans, as defined in Section 3(3) of ERISA
(defined below) and which are maintained for employees by the Borrower, a
subsidiary or an ERISA Affiliate (defined below) ("Plan"), comply with
all relevant provisions of the Internal Revenue Code of 1986 (the
"Code") and ERISA; no Plan is insolvent or in reorganization; no Plan
has an accumulated or waived funding deficiency or has applied for an extension
of any amortization period within the meaning of Section 412 of the Code;
neither the Borrower nor any subsidiary nor any ERISA Affiliate has incurred any
liability to or on account of a Plan which is a single-employer plan as defined
in Section 4001 (a) (15) of ERISA pursuant to Section 4062, 4063, 4064 or a
multi employer plan pursuant to Sections 515, 4201 or 4204, of ERISA; no
proceedings have been instituted to terminate any plan; and no condition exists
which constitutes a prohibited transaction (as defined in Section 406 of ERISA
or Section 4975 of the Code) or a reportable event (as defined in Section 4043
of ERISA), or which is reasonably expected will result in the Borrower, any
subsidiary or an ERISA Affiliate of incurring a liability to or on account of a
Plan pursuant to any of the foregoing Sections of ERISA or the Code.  As of the
date of this Agreement, the aggregate present value of all accrued benefit
liabilities (as defined in Section 4001(a)(6) of ERISA) of all Plans which were
single-employer plans did not exceed the aggregate current value of all assets
of such Plans based upon estimated actuarial data that has been provided to the
Borrower by the consulting actuaries of the Plans, and as of the date of this
Agreement, there was no withdrawal liability (and would be no withdrawal
liability assuming a complete withdrawal from all such Plans) to any Plan which
is a multi employer plan.

"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute of similar import,
together with regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA also refer to any successor sections.

"ERISA Affiliate" means any person (as defined
in Section 3 (9) of ERISA) (including each trade or business (whether or not
incorporated)) which together with the Company or any Subsidiary would be deemed
to be a "single employer" or a member of the same "controlled
group" of "contributing sponsors" within the meaning of Section
4001 of ERISA

3.13  The Borrower and its subsidiaries and affiliates
are in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of their businesses and the ownership of
their properties, except such noncompliance as would not, in the aggregate,
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), prospects,  assets or properties of Borrower or any
subsidiary or affiliate.

3.14  The Borrower and its subsidiaries and affiliates have
never conducted business under any names other than those set forth in Item
3.14 of the Disclosure Schedule. The addresses of all offices where any of
the Collateral is located is listed in Item 3.14 of the Disclosure
Schedule.  The chief executive office and the chief place of business for the
Borrower, each of its subsidiaries, and affiliates and the office where each
thereof keeps its books and records, is located at the address specified in
Item 3.14 of the Disclosure Schedule.

3.15    As of the date the last Financial Information was
received by Lender from Borrower, except to the extent disclosed, reflected or
reserved against therein or in Item 3.15 of the Disclosure Schedule,
Borrower did not have any material liabilities or obligations, known or unknown,
secured or unsecured, whether accrued, absolute, contingent or otherwise. 

3.16  Since the date the last Financial Information was
received by Lender from Borrower, there has been no material adverse change in
or to the business of Borrower or its subsidiaries or affiliates, or to the
operations, earnings, prospects, liabilities or relationships with suppliers,
distributors or customers of Borrower or its subsidiaries or affiliates.  There
is no presently existing condition with respect to Borrower or its subsidiaries
or affiliates which might be expected to have a material adverse effect on the
business or prospects of Borrower or its subsidiaries or affiliates or the
continued conduct of the business of Borrower or its subsidiaries or Affiliates
after the date of the Closing. 

3.17  No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by, or
other act by (except as have been obtained or made), any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (a) the execution, delivery and performance by the
Borrower or its subsidiaries or affiliates of any Loan Document or (b) the
legality, validity, binding effect or enforceability against the Borrower or its
subsidiaries or affiliates of any Loan Document.

3.18  Borrower shall use the Loan Proceeds exclusively for commercial reasons
that are expressly approved by Lender in accordance with Section 4.2 below.

3.19    Borrower or its subsidiaries and affiliates (as the case may be) are
the legal and beneficial owner of the Collateral, and the Collateral is free and
clear of all mortgages, security interests, liens, equities, encumbrances and
claims of every kind (collectively, the "Encumbrances") except
for the Encumbrances set forth on Item 4.7 of the Disclosure Schedule and
the liens of the Lender as set forth in this Agreement.  The Collateral is and
will remain free and clear of all Encumbrances of any nature whatsoever, except
for those set forth on Item 4.7 of the Disclosure Schedule and the liens
of the Lender as set forth in this Agreement.

	All of the subsidiaries and affiliates of Borrower are wholly owned by
Borrower.

3.21  The security interest and leasehold mortgage in favor of the Borrower
on the real and personal property located at Kenwood Mall, Cincinnati, Ohio, is
a first and best lien on such personal property and leasehold and Borrower has
not and will not allow any Encumbrances on such property to be superior to
Borrower's mortgage and security interest.

ARTICLE IV

ADDITIONAL COVENANTS AND OTHER AGREEMENTS

4.1.Finder's Fee. Borrower shall pay to
SDKI a cash fee of ten percent (10%) of all the Loan Proceeds disbursed to
Borrower, which amount shall be paid from the proceeds disbursed to
Borrower.

	Disbursement Approval.  All disbursements of Loan
Proceeds shall be approved in writing in advance by Lender, in its sole and
absolute discretion.  Prior to any use by the Borrower of the Loan Proceeds, or
any portion thereof, Borrower shall have received Lender's prior written
approval of such use, with such approval being determined by Lender in its sole
and absolute discretion.  Notwithstanding the foregoing provisions of this
Section 4.2, Borrower shall not need any approval from Lender with respect to
its use of the first $50,000 of Loan Proceeds received by Borrower.

	Registration Rights.  Within 60 days of the date
hereof, Borrower shall have used its best efforts to cause a registration
statement covering the resale of the shares of Common Stock issuable upon
conversion of the Note, exercise of the purchase rights under the Note, used for
payment of the accrued interest on the Note and  exercise of the Warrants to
have been declared effective by the Securities and Exchange Commission.  All
expenses of such registration, except fees for underwriting discounts and
selling commissions applicable to the resale of such Common Stock by Lender or
the holder of the Warrants, shall be borne by Borrower.  Lender and SDKI (and
their respective assigns) each agree to cooperate with the Borrower in the
preparation and filing of any such registration statement and in the furnishing
of information for inclusion therein, or in any efforts by the Borrower to
establish that the proposed sale is exempt under the Securities Act of 1933, as
amended, as to any proposed distribution.

4.4Right of First Refusal.  As long as their
exists any principal or interest outstanding under the Note, the Borrower grants
to the Lender a right of first refusal to participate as an investor in any
offering of Borrower's Common Stock, securities convertible into Common Stock or
any other equity securities of the Borrower (collectively, the
"Securities"). If the Borrower receives an executed letter of
intent or term sheet from any third party with respect to a sale or transfer of
Securities that the Borrower is willing to accept, the Borrower shall promptly
give written notice thereof to the Lender, including all essential terms and
conditions of such proposed offering.  The Lender shall then have ten (10) days
after receipt of such written notice to elect to enter into an agreement with
the Borrower to participate in the proposed offering on the same terms and
conditions as set forth in the Borrower's written notice.  If the Lender
declines to exercise its right of first refusal upon written notice from the
Borrower or fails to notify the Borrower within a 10-day period of an election
to invoke its right of first refusal, the Borrower shall have a period of 30
days to enter into an agreement with such third party from whom it has received
an executed letter of intent for the sale or transfer of the Securities on the
exact terms and conditions that were provided to Borrower in the notice.  In the
event that Borrower does not effect a transfer or sale of the Securities within
the specified thirty-day period, the Lender's right of first refusal shall
continue to be applicable to any subsequent sale or transfer of the Securities
by the Borrower. 

4.5.Approval of Equity and Debt Issuances.
Borrower and its subsidiaries and affiliates shall not issue any securities,
including options to purchase  securities, or take on any debt (other than the
debt reflected by the Note and trade payables incurred in the ordinary course of
business), without Lender's prior written approval, which approval shall be
given in Lender's sole and absolute discretion. 

4.6 [Intentionally Deleted]

4.7 Security Agreements.  In connection with the
Loan made pursuant to this Agreement, the Note shall be secured by a first and
best lien in all of the assets of the Borrower and its subsidiaries and
affiliates, including the shares of capital stock and membership interest in
Popmail Network, Inc., Fan Asylum, Inc. and Café Odyssey, LLC
(collectively, the "Collateral"); except for the Collateral set forth
in Item 4.7 of the Disclosure Schedule, which Lender shall have a lien
and security interest in, which shall be subordinated only to those persons or
entities identified in Item 4.7 of the Disclosure Schedule.  Borrower and
its subsidiaries and affiliates shall execute and deliver security agreements,
financing statements, pledge agreements and all other instruments and agreements
required by Lender that provide for a grant by Borrower and its subsidiaries and
affiliates to Lender of a security interest in all of the Collateral.   Borrower
shall take all other steps  necessary to keep such security interest in Lender
perfected and shall take no action to subordinate Lender's security interest to
any other person or entity without Lender's prior written approval.

4.8 Default Under Loan Document.  In the event
that a default shall exist under any of the Loan Documents, Lender shall be
authorized to proceed with any and all remedies available to Lender thereunder.
A default under any of the Loan Documents shall constitute a default under each
other Loan Document and shall entitle Lender to pursue any and all remedies
under each or any of the Loan Documents.

	Reserving Common Stock For Issuance.  The Borrower
shall at all times while the Warrants or the Lender's conversion and purchase
rights as set forth in the Note are outstanding, reserve and keep available out
of its authorized but unissued stock, such number of duly authorized Common
Stock as shall be sufficient to effect the conversion rights and purchase rights
under the Note and Warrants in accordance with their respective
terms.

	Reclassification of Common Stock.  The Borrower
covenants and agrees that in the event its present Common Stock shall be
reclassified, split, combined or otherwise changed, or in case of any
consolidation or merger of the Borrower with or into another corporation as a
result of which holders of Common Stock become entitled to receive securities or
other assets (including cash) with respect to or in exchange for their Common
Stock (other than a merger with a subsidiary in which merger the Borrower is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of Common Stock) or
in case of any sale, lease or conveyance to another corporation of the property
of the Borrower as an entirety or substantially as an entirety, the Borrower
shall make proper provision as a part of the terms of such reclassification,
split, combination, change, consolidation, merger or sale, that the holder of
the Warrants and the Note will thereafter be entitled to convert it into the
same kind and amount of securities (including in that term, stock of any class
or classes) and other assets as may be issuable or distributable by the terms of
such reclassification, split, combination, change, consolidation, merger or
sale.

4.11  Financial Statements. The Borrower
shall: (i) Within 45 days of the end of each quarter, furnish Lender with any
and all filings with the Securities and Exchange Commission including but not
limited to Form 10Q, and  a No Default Certificate in the form which in a form
acceptable to Lender; (ii) within 90 days of its fiscal year end, furnish
audited copies of the Borrower's balance sheet, income statement, and statement
of cash flows as well as a copy of Borrower's Form 10K; and (iii) within 30 days
of filing, the Borrower's consolidated federal income tax return.

4.12Taxes, Assessments and Liabilities. The
Borrower shall pay all taxes, assessments, and other liabilities when due,
except for those which are contested in good faith. File all required federal,
state and local tax returns on a timely basis.

4.13Notice.  The Borrower shall give the
Lender prompt notice of any: (i) default of this or any other agreement or
contract under which the Borrower or any of its subsidiaries or affiliates are
liable; (ii) environmental penalty, claim or dispute involving more than
$25,000.00; (iii) litigation, government proceeding or investigation filed or
threatened against Borrower or any of its subsidiaries or affiliates, Lender its
directors and officers involving more than $25,000.00; (iv) reportable event
under ERISA; or (v) material change in the business prospects or financial
condition of the Borrower or any of its subsidiaries or affiliates.

4.14Corporate Existence and Status.  Borrower
shall maintain its and its subsidiaries' and affiliates' corporate existence and
remain in good standing under the laws of each jurisdiction where the Borrower
and its subsidiaries or affiliates are duly qualified to conduct its
business.

4.15Protection of Intellectual Property.
Borrower and its subsidiaries and affiliates shall take all measures necessary
to defend and protect the Intangibles, and not commit or permit any action that
may impair the value of the Intangibles.

4.16Liens.   Borrower and its subsidiaries and
affiliates shall not create or permit to exist any Encumbrance with respect to
the Collateral, except for liens created in favor of the Lender hereunder.

4.17Compliance with Laws.  Borrower and its
subsidiaries and affiliates shall keep, observe, satisfy and not suffer
violations of any and all  laws, statutes, ordinances and/or regulations.

4.18Operate in the Ordinary Course.  Borrower
and its subsidiaries and affiliates shall continue to operate their respective
businesses in the ordinary and customary course, and not take any actions which
materially alter the nature or scope of their respective businesses as conducted
on the date of the Closing.

 

4.19Further Assurances.  Borrower and its
subsidiaries and affiliates shall provide Lender with such additional
information or documentation as Lender may request from time to time.

4.20Lender's Attorney's Fees.  At the Closing,
Borrower shall pay Lender's attorney's fees it has incurred related to the Loan
up to a maximum of $10,000.

ARTICLE V

DEFAULT AND REMEDIES

5.1.Events of Default.  The occurrence
of any one or more of the following events or the existence of one or more of
the following conditions shall, upon 30 days written notice to Borrower,
constitute an "Event of Default" under this Agreement provided
that the events set forth in Sections 5.1(a), 5.1(c), 5.1(f), 5.1(e), 5.1(g),
5.1(h), 5.1(k), 5.1(l) 5.1(n) and 5.1(o) shall constitute an Event of Default
immediately upon their occurrence and Lender shall not be required to provide
the 30 days' written notice for any such events:  

(a)Borrower shall fail to pay when due any
installment of principal or interest due under the Note, whether due on the date
provided for therein or by acceleration or otherwise, or Borrower shall fail to
pay when due any other amounts due under any of the Loan Documents;

(b)Any material breach of a representation or warranty made in writing to
Lender by Borrower or its subsidiaries or affiliates made herein, in any Loan
Documents or in connection with the making of the Loan; 

(c)The breach, default or violation by Borrower or its subsidiaries or
affiliates of any obligation, agreement or covenant contained in Loan Documents
or any other agreements, certificates or writings executed in connection
herewith by Borrower or its subsidiaries or affiliates; unless the same is cued
within any applicable grace period; 

(d)any material provision of any of the Loan Documents shall at any time
for any reason cease to be in full force and effect or shall be declared to be
null and void; 

(e)any litigation or proceeding is pending which may materially adversely
affect the ability of Borrower, its subsidiaries or affiliates to perform its
obligations under the Loan Documents; 

(f) the failure of the Borrower or its subsidiaries or
affiliates to comply with 

any other covenants or agreements contained in any of the
Loan Documents and not herein specifically referenced, unless the same is cured
within any applicable grace period; 

(g)a material part of the operations of the Borrower or any of its
subsidiaries or affiliates shall cease for a period of thirty days; 

(h)the liquidation, termination or dissolution of Borrower or any of its
subsidiaries or affiliates;

(i)the occurrence of an event of default (as defined therein) in any of
the Loan Documents other than this Agreement;

(j)the occurrence of any of the following transactions concerning the
Borrower without the prior written consent of the Lender (which shall be given
in its sole and absolute discretion): (i) the acquisition of the Borrower by
another entity by means of any transaction or series of related transactions
(including, without limitation, the transfer of more than 50% of the voting
power of the Borrower, reorganization, merger, consolidation); or (ii) a sale of
all or substantially all of the assets of the Borrower; unless the Borrower's
shareholders of record as constituted immediately prior to such acquisition or
sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Borrower's acquisition or otherwise) hold at
least 50% of the voting power of the surviving or acquiring entity;

(k)the issuance of any securities by Borrower's subsidiaries and
affiliates without the prior written consent of the Lender; 

(l)the occurrence of any of the following transactions concerning the
Borrower's subsidiaries or affiliates without the prior written consent of the
Lender: (i) the acquisition (in whole or in part) of any subsidiary or affiliate
of the Borrower by another entity or person by means of any transaction or
series of related transactions (including, without limitation, the stock
purchase, stock issuance, reorganization, merger, consolidation); or (ii) a sale
of all or substantially all of the assets of the Borrower; 

(m)Borrower's Common Stock is de-listed from the Nasdaq National or
SmallCap Market Systems; or 

(n)if Lender shall reasonably deem itself to be insecure; or

(o)the occurrence of an event which, with notice, lapse of time or both,
would constitute a default or event of default under the Loan Agreement dated as
of December 1, 2000, as amended, among GSI Ventures, LLC, Borrower, SDKI, PNI,
FAI,  and COL or the other loan documents relating to such loan.  

5.2.Remedies.  Upon the
occurrence of any Event of Default hereunder as above provided, and at any time
thereafter, all principal, interest and other amounts payable under the Note
shall, at the option of Lender, become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived by Borrower.  Lender may proceed with every remedy available at
law or in equity or provided for in the Loan Documents or in any other document
executed in connection with the Loan, in such order or sequence as Lender may
determine in its sole discretion, including concurrently, independently, or
successively, and all expenses incurred by Lender in connection with any remedy
shall be deemed indebtedness of Borrower to Lender including, but not limited
to, reasonable attorneys' fees incurred by Lender.  

ARTICLE VI

GENERAL PROVISIONS

6.1.Amendments.  No provision or term
of the Loan Documents may be amended, modified, revoked, supplemented, waived or
otherwise changed except by a written instrument duly executed by the party from
whom enforcement is sought.  

6.2.Borrower Not Released.  Without
affecting any obligation of Borrower under this Agreement, Lender without notice
or demand may renew, extend or otherwise change the terms and conditions of the
Loan.  

6.3.Severability.  Whenever possible,
each provision of the Loan Documents shall be interpreted so as to be effective
and valid under New York law.  Should any provision, covenant or agreement
contained in the Loan Documents be deemed invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions of the Loan Documents shall not be impaired thereby, nor shall the
validity, legality or enforceability of any such defective provision be in any
way affected or impaired in any other jurisdiction.  

6.4.Successors and Assigns Bound;
Assignment.  The covenants and agreements contained herein shall bind the
parties hereto and each of their respective successors and assigns.  Borrower
may not assign this Agreement without the prior written consent of Lender.
Subject to the foregoing restriction, this Agreement shall inure to the benefit
of Lender and SDKI, their successors and assigns.  

6.5.No Third Party Benefits.  This
Agreement is made for the sole benefit of Borrower, Lender, PNI, FAO, COL, SDKI
and their respective successors and assigns, and no other person or persons
shall have any rights or remedies under or by reason of this Agreement.  

6.6.Headings.  The captions and
headings of the paragraphs in the Agreement are for convenience only and are not
used to interpret or define the provisions of the Agreement.  

6.7.Governing Law.  This Agreement and
the Loan Documents or any other documents executed in connection with the loan
shall be governed by and interpreted in accordance with the laws of the State of
New York, without regard to New York's conflict of laws principles.  

6.8.Conflict.  Should any provision of
any other Loan Documents conflict with any provision of this Agreement, the
provision selected by Lender, in its sole discretion, shall govern and shall be
controlling.  

6.9 Jurisdiction.  Borrower, by its execution
hereof (i) hereby irrevocably submits to the exclusive jurisdiction of the State
of New York and to the exclusive jurisdiction of the United States District
Court for the Southern District of New York for the purpose of any suit, action
or other proceeding arising out of or based upon this Agreement, the Collateral
or the Loan Documents or the subject matter hereof or thereof brought by Lender,
any holder of the obligations of Borrower under the Loan Documents or their
respective successors or assigns, and (ii) agrees not to assert, by way of
motion, as a defense or otherwise, in any such proceeding, any claim that
Borrower is not subject personally to the jurisdiction of the above-named
courts, that Borrower's property is exempt or immune from attachment or
execution, that any such proceeding brought in one of the above-named courts is
brought in an inconvenient forum, that the venue of any such proceeding brought
in one of the above-named courts in improper, or that this Agreement, the
Collateral or any of the Loan Documents, or the subject matter hereof or
thereof, may not be enforced in or by such court.

6.10Waiver of Jury.  LENDER AND BORROWER HEREBY
VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT OR
CONCERNING THE LOAN DOCUMENTS AND/OR ANY COLLATERAL CONTEMPLATED THEREBY,
REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY CONTRACTUAL OR
TORTIOUS OR OTHER CLAIM.  BORROWER ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL
IS A MATERIAL INDUCEMENT TO LENDER IN EXTENDING CREDIT, THAT LENDER WOULD NOT
HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT BORROWER HAS
BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN
ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL
EFFECT OF THIS WAIVER.

6.11Obligations of Subsidiaries of Borrower.
PNI, FAI and COL all acknowledge and agree that each of them shall be bound by
Section 4.8 and all obligations, covenants, representations and warranties that
reference any subsidiary or affiliate of Borrower as if such obligations,
covenants, representations and warranties were fully made by them.  PNI, FAI and
COL further acknowledge and agree that each of them shall receive a material
benefit from the Loan received by Borrower from Lender because without it, PNI,
FAI and COL would no longer be able to continue their business as currently
operated.  The obligations of PNI, FAI and COL hereunder were a material
inducement to Lender to enter into this Agreement.

6.12Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall de deemed to be an
original but all of which together will constitute one and the same instrument.
This Agreement may be executed by facsimile signatures which shall have the same
force and effect as original signatures.

6.13Entire Agreement.  This Agreement and all
documents and agreements referred to in this Agreement supersede all prior
understandings, agreements and discussions between the parties concerning this
subject matter, with such prior understandings, agreements and discussions
between the parties being merged into this Agreement, and constitutes the entire
agreement between the parties with regard to this subject matter.

6.14Survival.  All of the obligations,
covenants, representations and warranties of Borrower and its subsidiaries and
affiliates shall survive the Closing and any subsequent Closing.

ARTICLE VII

CONDITIONS TO THE CLOSING

7.1The obligation of Lender to complete the Closing is
subject to the satisfaction of each of the following conditions:

(i)Receipt of certified resolutions of Borrower
and its subsidiaries and affiliates authorizing the Loan and the grant of the
security interest in the Collateral to Lender;

(ii)Execution of the Loan Documents by Borrower
and its subsidiaries and affiliates, including the Note representing the
proceeds being disbursed at the Closing; 

(iii)Receipt of  Borrower's certified resolutions
authorizing the issuance and reservation of shares of Common Stock upon the
exercise of the Warrants and the conversion rights set forth in the Note in a
form satisfactory to Lender.

[Signature Page to Follow]

 

IN WITNESS WHEREOF, the parties hereto executed this Loan
Agreement as of the date first written above.

BORROWER:

POPMAIL.COM, INC., 

By:

Its:___________________________

PMI:

POPMAIL NETWORK, INC.

By:

Its:___________________________

LENDER:

THE SHAAR FUND LTD.,

 
By:Shaar Advisory Services, N.V. (the advisor to The
Shaar Fund Ltd.)

By:

Name:W.J.Langeveld

Title:Managing Director

FAI:

FAN ASYLUM, INC.

By:

Its:___________________________

SDKI:

SDK INVESTMENTS, INC., 

By:

Stephen D. King

President

COL:

CAFE ODYSSEY, LLC

By:

Its:___________________________

DISCLOSURE SCHEDULE

ITEM 3.1 SUBSIDIARIES AND AFFILIATES

ITEM 3.6LITIGATION

ITEM 3.14 NAMES OF BUSINESSES; ADDRESSES WHERE COLLATERAL LOCATED;
PRINCIPAL OFFICE ADDRESS OF BORROWER, SUBSIDIARIES AND AFFILIATES

ITEM 3.15CONTINGENT LIABILITIES

ITEM 4.7ENCUMBRANCES ON COLLATERAL

 

 

113679.5

SCHEDULE 3.1

Subsidiaries and Affiliates

 

	Fan Asylum, Inc.
	Popmail Network, Inc.
	Cafe Odyssey, LLC

Schedule 3.6

Litigation

The Company entered into a bridge loan transaction on or about October 6,
2000, in which it issued a promissory note in favor of Great Western Business
Services in the principal amount of $600,000.  The note was payable in 30 days
and was secured by certain computer equipment owned by the Company.
Additionally, the lender obtained a "contingent" security interest in
the Company's units of Cafe Odyssey, LLC, which vested upon an event of default
thereunder.  The Company has failed to repay the note and the lender has
recently given the Company notice of such default.  Additionally, the lender has
informed the Company that it intends to retrieve the collateral as soon as is
practicable.  The lender has not given any notice or otherwise communicated to
the Company its intentions with respect to its interest in the Cafe Odyssey
units.   Cafe Odyssey, LLC currently has no assets.

On September 13, 2000, the Company received a Nasdaq Staff Determination
which indicates that the Company fails to comply with its common stock
maintaining a minimum bid price of $1.00 over the previous 30 consecutive
trading days as required by Marketplace Rule 4310 (c)(4). Therefore, in
accordance with Marketplace Rule 4310 (c)(8)(B), PopMail.com was provided 90
calendar days, or until December 12, 2000 to regain compliance with the Rule
for continued listing. There can be no assurances the Panel will grant the
Company's request for continued listing.  The Company has requested a hearing
with Nasdaq to appeal its determination to delist the Company's common stock,
which is scheduled for January 11, 2001.

On August 9, 2000, a lawsuit was filed against Fan Asylum, Inc. and Tim
McQuaid relating to an automobile accident.  The plaintiff in the action seeks
damages in excess of $25,000.  The Company has no other information concerning
this matter at the present time.

 

Schedule 3.14

Names of Businesses and Addresses

 

	Fan Asylum, Inc.

1250 Folsom Street

San Francisco, CA  94103

	Popmail Network, Inc.

1333 Corporate Drive, Suite 350

Irving, TX  75038

	Café Odyssey, LLC

500 16th St. Suite 350

Denver, CO  80202

4. Cafe Odyssey

320 South Avenue

Mall of America

Bloomington, MN  55425

 

Schedule 3.15

Contingent Liabilities

The Kenwood Restaurant opened in December 1996 under the name
Hotel Discovery and was closed by the Company in August 1999. In November 1999,
the Company assigned the related lease (described below) in connection with the
pending sale of restaurant assets to a third party, who subsequently reopened
the restaurant under another name and continues to operate the same. The
property is approximately 17,000 square feet in size on three levels and is
located at the northeast corner of Sycamore Plaza at Kenwood Shopping Center in
Cincinnati, Ohio. Although the third party has paid all payments due under the
lease since November 1999, the Company remains primarily obligated under the
lease. 

 

The initial term of the lease is 15 years with an option for
two additional five-year periods. The lease provides for the payment of both a
monthly fixed minimum rent and a percentage rent based on gross sales in excess
of an escalating base amount. The monthly fixed minimum rent is $12,833 for the
first five years of the initial lease term, $14,117 for the sixth through tenth
years of the initial lease term, $15,400 for the eleventh through fifteenth
years of the initial lease term.

 

In addition to the fixed minimum rent, the lease provides for
the payment of a percentage rent equal to 4% of the gross sales from the
restaurant in excess of the following annual gross sales amounts; $3,850,000 for
the first five years of the initial lease term, $4,235,000 for the sixth through
tenth years of the initial lease term, $4,620,000 for the eleventh through
fifteenth years of the initial lease term. No percentage rent was paid in 1998
or 1999. In addition to the fixed minimum rent and percentage rent, the Company
is required to pay its proportionate share of common area maintenance costs;
taxes, insurance, maintenance and operating costs. 

Schedule 4.7

Encumbrances

See Schedule 3.6.

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