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EXHIBIT 10.1
LOAN AND PLEDGE AGREEMENT
This LOAN AND PLEDGE AGREEMENT (this "AGREEMENT") is made as of August
14, 2000, by and among World Commerce Online, Inc., a Delaware corporation (the
"COMPANY"), and Interprise Technology Partners LP ("INTERPRISE").
RECITAL
1. The Company has requested Interprise to lend it up to $5 million and
Interprise is willing to provide the loan, which loan is to be evidenced by a
Senior Secured Promissory Note secured by a pledge of all of the assets of the
Company, all subject to the terms and conditions stated herein.
AGREEMENT
In consideration of the agreements and covenants contained herein,
together with other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
SECTION 1. TERMS OF THE LOANS
1.1. THE LOANS. Interprise agrees, on the terms and conditions
hereinafter set forth, to make loans to the Company in the aggregate principal
amount of Five Million Dollars ($5,000,000) (the "LOANS"). The Loans shall be
disbursed to the Company in increments of $500,000, on a documented "as
required" basis, pursuant to written requests by the Company for same, and, for
each $500,000 increment, subject to agreement by Interprise. The proceeds of the
Loans shall be used by the Company for general working capital purposes.
1.2. THE NOTE. The Loans shall be evidenced by a Senior Secured
Promissory Note dated the date hereof (the "NOTE"), representing the obligation
of the Company to repay the Loans, together with interest thereon. A form of the
Note is attached hereto as Exhibit A. The Company authorizes Interprise to
endorse the date and amount of the Loans and any prepayment on the schedule
annexed to and constituting a part of the Note, which endorsement shall
constitute prima facia evidence of the accuracy of the information, in the
absence of manifest error. The failure to record any such amount or any error in
recording shall not, however, limit or otherwise affect the obligations of the
Company to repay the principal amount of the Loans together with all interest
accruing thereon.
1.3. REPAYMENT. The outstanding principal and interest is payable no
later than February 12, 2001 at which time all of the outstanding and unpaid
principal and interest shall be due and payable (the "MATURITY DATE"). All
payments of principal and interest shall be made in U.S. Dollars.
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1.4. INTEREST. Interest on the outstanding principal shall equal to ten
percent (10%) per annum (the "INTEREST RATE") and shall accrue from the date on
which principal was advanced. Interest shall be calculated on the basis of a
three hundred and sixty five (365) day year.
1.5 WARRANT. The Company shall issue to Interprise a warrant dated the
date hereof, in the form attached hereto as Exhibit B (the "Warrant").
SECTION 2. CONDITIONS PRECEDENT
2.1. DOCUMENTS REQUIRED FOR CLOSING. The obligation of Interprise to
make the Loans is subject to the conditions precedent that the Company shall
have delivered to Interprise prior to the disbursement of the Loans the
following:
(a) THIS AGREEMENT. This Agreement, duly executed by an authorized
officer of the Company and Interprise.
(b) THE NOTE. The Note, duly executed by an authorized officer of
the Company.
(c) THE WARRANT. The Warrant, duly executed by an authorized
officer of the Company.
(d) DESIGNATION OF SERIES B PREFERRED STOCK. The Company shall
have filed with the Office of the Secretary of State of Delaware an Amended and
Restated Certificate of Designation of the Series B Preferred Stock increasing
the number of designated shares of its Series B Preferred Stock, par value $.001
per share, to 5,918,198.
(e) ADDITIONAL MATTERS. All other documents in connection with the
transactions contemplated hereby reasonably requested by Interprise.
SECTION 3. PLEDGE AND SECURITY AGREEMENTS
3.1. SECURITY INTEREST AND PLEDGE. As security for the prompt and
complete satisfaction of all obligations of the Company under this Agreement and
the Note, whether for principal, interest, expenses or otherwise, the Company
hereby grants, transfers and assigns and pledges to Interprise all of its
respective right, title and interest in and grants Interprise a senior security
interest in the Company's assets as set forth in that UCC-1 Financing Statement
("UCC-1") filed with the Secretary of State of the State of Florida, all of even
date herewith (the "PLEDGED ASSETS").
3.2 DEFAULT. If the Company defaults in the payment of the principal or
interest under the Note when it becomes due (whether upon acceleration or
otherwise) or any other event of default under the Note or this Agreement occurs
(including the bankruptcy or insolvency of the
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Company), Interprise may exercise any and all the rights, powers and remedies of
any owner of the Pledged Assets and shall have and may exercise without demand
any and all the rights and remedies granted to a secured party upon default
under the Uniform Commercial Code of the State of Florida or otherwise available
to Interprise under applicable law. Without limiting the foregoing, Interprise
is authorized to sell, assign and deliver at its discretion, from time to time,
all or any part of the Pledged Assets at any private sale or public auction, on
not less than ten days written notice to the Company, at such price or prices
and upon such terms as Interprise may deem advisable. The Company shall have no
right to redeem the Pledged Assets after any such sale or assignment. At any
such sale or auction, Interprise may bid for, and become the purchaser of, the
whole or any part of the Pledged Assets offered for sale. In case of any such
sale, after deducting the costs, attorneys' fees and other expenses of sale and
delivery, the remaining proceeds of such sale shall be applied to the principal
of and accrued interest on the Note; provided that after payment in full of the
indebtedness evidenced by the Note, the balance of the proceeds of sale then
remaining shall be paid to the Company and the Company shall be entitled to the
return of any of the Pledged Assets remaining in the hands of Interprise. The
Company shall be liable for any deficiency if the remaining proceeds are
insufficient to pay the indebtedness under the Note in full, including the fees
of any attorneys employed by Interprise to collect such deficiency.
3.3 COSTS AND ATTORNEYS' FEES. All costs and expenses (including
reasonable attorneys' fees) incurred in exercising any right, power or remedy
conferred by this Agreement or in the enforcement thereof, shall become part of
the indebtedness secured hereunder and shall be paid by the Company or repaid
from the proceeds of the sale of the Pledged Assets hereunder.
3.4 PAYMENT OF INDEBTEDNESS AND RELEASE OF PLEDGED ASSETS. Upon payment
in full of the indebtedness evidenced by the Note, Interprise shall surrender
the Pledged Assets to the Company together with all forms of assignment.
3.5 NO OTHER LIENS; NO SALES OR TRANSFERS. The Company hereby
represents and warrants that it has good and valid title to all of the Pledged
Assets, free and clear of all liens, security interests and other encumbrances,
and the Company hereby covenants that, until such time as all of the outstanding
principal of and interest on the Note has been repaid, the Company shall not (i)
create, incur, assure or suffer to exist any pledge, security interest,
encumbrance, lien or charge of any kind against the Pledged Assets or the
Company's rights or a holder thereof, other than pursuant to this Agreement, or
(ii) sell or otherwise transfer any Pledged Assets or any interest therein.
3.6 FURTHER ASSURANCES. The Company agrees that at any time and from
time to time upon the written request of Interprise, the Company shall execute
and deliver such further documents (including UCC financing statements) and do
such further acts and things as Interprise may reasonably request in order to
effect the purposes of this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES. In order to induce
Interprise to enter into this Agreement, the Company represents and warrants to
Interprise that:
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4.1. DUE ORGANIZATION, GOOD STANDING AND AUTHORITY. The Company is duly
organized, validly existing and in good standing under the laws of the state of
Delaware and is qualified to do business in every jurisdiction where necessary
in light of its business and properties, except where the failure to be so
qualified would not have a material adverse effect on the business or financial
condition of the Company. The Company has full power, authority and legal right
(a) to own or lease its assets and properties and to conduct its business as now
being conducted, (b) to incur its obligations under and to perform the terms of
this Agreement, the Note and the Warrant, and (c) to issue the Warrant and
Warrant Stock (as defined in the Warrant).
4.2. DUE AUTHORIZATION; NON-CONTRAVENTION. The execution and delivery
by the Company of this Agreement, the Note, the Warrant and all ancillary
instruments issued hereunder, and the performance of the terms hereof and
thereof will not be, or result in, a violation, breach or default of any law,
agreement or instrument to which the Company is a party.
4.3. VALIDITY. This Agreement, the Note and the Warrant when delivered
will be, legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms.
4.4. SHARES. Upon exercise of the Warrant in accordance with its terms
as contemplated therein, the Warrant Stock (as defined therein) will be duly
authorized, validly issued, fully paid, and nonassessable, will not be issued in
violation of any preemptive rights, and the holders of the Warrant Stock will
have good title to such shares, free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders' agreements and voting trusts. Upon
conversion of the Warrant Stock into Common Stock in accordance with the
Certificate of Incorporation, the Common Stock then issued will be duly
authorized, validly issued, fully paid, and nonassessable, will not be issued in
violation of any preemptive rights, and the holders of the Common Stock will
have good title to such shares, free and clear of all liens, security interests,
pledges, charges, encumbrances, shareholders' agreements and voting trusts.
4.5 COMPLIANCE. All the consents required for compliance with the terms
of this Agreement and the Note have been acquired. Compliance with the terms of
this Agreement and the Note will not cause the Company to lose any interest in
or the benefit of any asset, right, license or privilege it presently owns or
enjoys or cause any person who normally does business with the Company not to
continue to do so on the same basis as previously, and will not give rise to or
cause to become exercisable any option or right of preemption.
4.6 NO DEFAULT. The Company is not, and shall not be as a result of
this Agreement or the Note, in default under any instrument constituting any
indebtedness or under any guarantee of any indebtedness and there is no reason
why any such indebtedness or guarantee should be called or the liabilities
thereunder accelerated before their due date (if any) or any loan facilities
terminated.
4.7 CAPITALIZATION. The authorized capital stock of the Company
consists of 100,000,000 shares of capital stock, consisting of 90,000,000 shares
of Common Stock, par
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value $.001 per share, and 10,000,000 shares of Preferred Stock, par value $.001
per share, of which 4,250,000 are designated as Series A Convertible Preferred
Stock, par value $.001 per share, 5,110,000 are designated as Series B
Convertible Preferred Stock, par value $.001 per share, and 91,802 are
designated as Series C Convertible Preferred Stock, par value $.001 per share.
The Company has 16,263,904 shares of Common Stock, 4,250,000 shares of Series A
Convertible Preferred Stock, 5,000,000 shares of Series B Convertible Preferred
Stock and 91,802 shares of Series C Convertible Preferred Stock issued and
outstanding. The Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock or any warrants, options, or other rights to acquire its capital
stock, except pursuant to its Certificate of Incorporation. All of the
outstanding shares of the Company's capital stock are and shall be validly
issued, fully paid, and nonassessable.
4.8 LITIGATION. There is no action, suit or proceeding, by or before
any governmental or regulatory authority, court, arbitral tribunal or other body
now pending (or, to the best knowledge of the Company, threatened) against or
affecting the Company or any of its properties, rights, or assets or which may
effect the legality or enforceability of this Agreement or the Note.
SECTION 5. COVENANTS. The Company covenants and agrees that, from the
date hereof until the Maturity Date and for so long as the Loans remain
outstanding and unpaid, in whole or in part, or any other amount is owing to
Interprise under this Agreement, unless Interprise shall otherwise consent in
writing, the Company will promptly give notice to Interprise as soon as it
becomes aware of (a) any Event of Default (as defined in Section 6) or (b) any
other matter, event or thing that has had or could reasonably have a material
adverse effect on the Company or its financial condition.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES
6.1. EVENTS OF DEFAULT. The occurrence and continuance of any one or
more of the following events (whether or not in the control of the Company)
shall constitute an Event of Default:
(a) NONPAYMENT. The Company shall fail to make, on or before five
(5) business days after the due date, in the manner required, any payment of
principal, interest or any other sums due under this Agreement.
(b) OTHER DEFAULTS; CURE PERIOD. The Company shall fail to observe
or perform any of its covenants contained in this Agreement, other than the
covenants and provisions relating to payments in paragraph (a) above, and the
Company shall have not remedied such default within thirty (30) business days
after such default.
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(c) REPRESENTATION OR WARRANTY. Any representation, warranty or
statement made or deemed to be made by the Company herein or in any document
given hereunder shall prove to have been untrue in any material respect as of
the time made.
(d) INSOLVENCY. The Company shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
(i) the Company shall commence any voluntary bankruptcy proceeding, or (ii)
their shall be commenced against the Company by another party any such case,
proceeding or other action in bankruptcy which remains unstayed, undismissed or
undischarged for a period of 60 days.
6.2. ACCELERATION. On the Date of Default, there shall immediately be
due and payable to Interprise the amount of the Loans outstanding, plus accrued
interest and all other amounts owed by the Company pursuant to this Agreement.
All amounts under this Section 6 are due and payable without presentment,
demand, protest and all other notices of any kind are hereby expressly waived by
the Company.
6.3. REMEDIES UPON EVENT OF DEFAULT.
(a) GENERAL. Subject to Section 6.3(b) below, if any Event of
Default shall have occurred and be continuing, Interprise may proceed to protect
and enforce his rights as holder of the Note, either by suit in equity or by
action at law, or both, whether for the specific performance of any covenant or
agreement contained in this Agreement or in aid of the exercise of any power
granted in this Agreement, and may proceed to enforce the payment of all amounts
due upon the Note, and such further amounts as shall be sufficient to cover the
costs and expenses of collection (including, without limitation, reasonable
counsel fees and disbursements), or to enforce any other legal or equitable
right of the holder of the Note. In addition, Interprise shall have all the
rights of a pledgee in possession of the Pledged Assets under the applicable
provisions of law and of the Uniform Commercial Code as in effect in the State
of Florida, and any other jurisdiction where any of the Collateral is located,
and all rights and remedies provided in Section 3 of this Agreement or at law or
in equity or otherwise.
(b) REMEDIES FOR NON-PAYMENT. If an Event of Default pursuant to
Section 6.1(a) shall have occurred, Interprise shall have the sole option to
either (i) pursue his rights under Section 6.3(a) above or (ii) extend the terms
of the Note for an additional three (3) months, in which case the Note would not
be in default but would continue to accrue interest at the non-default rate
under the Note.
(c) REMEDIES CUMULATIVE. No remedy conferred in this Agreement or
the Note upon Interprise is intended to be exclusive of any other remedy and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.
(d) REMEDIES NOT WAIVED. No course of dealing between the Company
and Interprise, and no delay or failure in exercising any rights hereunder or
under the Note in respect thereof, shall operate as a waiver of any of the
rights of Interprise.
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SECTION 7. MISCELLANEOUS
7.1. NOTICES. All notices, demands or other communications in
connection with this Agreement shall be in writing and shall be delivered by
hand, sent by registered or certified mail or by facsimile addressed to the
parties as set forth below (or to such other address as the parties may
designate by notice):
If to Interprise:
Interprise Technology Partners, LP
0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx
Xxxxx, XX 00000
Attention: XX Xxxxxxxxx
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxx
Fax: (000) 000-0000
If to the Company to:
World Commerce Online, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxxx Traurig, P.A.
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
A notice delivered by hand to a party shall be deemed received when delivered. A
notice sent by mail shall be deemed received on the fifth business day after
mailing. A notice sent by facsimile shall be deemed received upon receipt of the
relevant confirmation or answerback.
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7.2. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or the Note, nor consent to any departure by the Company therefrom,
shall be effective unless the same shall be in writing and signed by the
parties, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
7.3. COSTS AND EXPENSES. As an inducement for the general partner of
Interprise to provide services to the Company in connection with the
transactions contemplated hereby and as a further inducement for Interprise to
consummate the transactions contemplated hereby, the Company agrees to pay to
the general partner of Interprise a closing fee of $100,000, payable at the time
of the initial advance of a portion of the Loan. In addition, the Company shall
reimburse Interprise for its reasonable fees and expenses (including its
reasonable fees and expenses of its counsel and other advisors) which Interprise
has incurred in connection with the transaction. In addition, the Company agrees
to pay, and hold Interprise harmless against liability for the payment of: (i)
its reasonable fees and expenses (including its reasonable fees and expenses of
its counsel and other advisors) arising in connection with the interpretation
and enforcement of its rights under, this Agreement, the other agreements
contemplated hereby, the Certificate of Incorporation and the Company's Bylaws,
and the consummation of the transactions contemplated hereby and thereby
(including, but not limited to, reasonable fees and expenses arising with
respect to any subsequent or proposed acquisitions, sales, mergers, or
recapitalizations by the Company and its Subsidiaries); (ii) the reasonable fees
and expenses incurred with respect to any amendments or waivers (whether or not
the same become effective) under or in respect of this Agreement, the other
agreements contemplated hereby and the Articles of Incorporation and the
Company's Bylaws; (iii) reasonable travel expenses and other reasonable
out-of-pocket fees and expenses as have been or may be incurred by Interprise,
its directors, officers and employees in connection with the transactions
contemplated hereby (including, but not limited to, reasonable fees and expenses
incurred in attending Company-related meetings); and (iv) stamp and other Taxes
which may be payable in respect of the execution and delivery of this Agreement
or the issuance, delivery, or acquisition of any shares of Stock upon exercise
of the Warrant.
7.4. INDEMNIFICATION. The Company will indemnify and hold harmless
Interprise and his agents, representatives and employees against any and all
costs, claims, losses and expenses (including reasonable attorneys' fees)
sustained or incurred as a consequence of, arising from or related to the
negotiation, execution and performance of this Agreement, the Note, the Warrant
and all collateral agreements.
7.5. BINDING EFFECT; ASSIGNMENT OF RIGHTS. This Agreement shall become
effective when it has been executed by the parties and thereafter shall be
binding upon and inure to the benefit of the Company and Interprise and their
respective successors, transferees and assigns, except that the Company shall
not have the right to transfer or assign any of its rights or obligations
hereunder without the prior written consent of Interprise.
7.6. GOVERNING LAW. This agreement shall be governed in accordance with
the laws of the state of Delaware, without giving effect to its choice of law
principles.
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7.7. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
in counterparts and executed signature pages sent to the other party by
facsimile transmission shall be binding as evidence of such party's agreement
hereto and acceptance hereof.
7.8. ENTIRE AGREEMENT. This Agreement and the other documents referred
to herein, constitute the entire agreement between Interprise and the Company
and no other agreements, promises, representations and warranties (express or
implied), except those expressly set forth herein have been relied upon by the
Company or have been made by Interprise.
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IN WITNESS WHEREOF, each of the undersigned has caused this Loan and
Pledge Agreement to be duly executed and delivered by its respective duly
authorized officers as of the day and year first above written.
COMPANY:
World Commerce Online, Inc.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: Chairman of the Board
Chief Executive Officer
Interprise Technology Partners, LP
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Managing Partner
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