ASSIGNMENT OF LICENSE AGREEMENT
THIS ASSIGNMENT OF LICENSE AGREEMENT (this "AGREEMENT") is dated as of
January ___, 2003, and is made by E Merchant Processing, Incorporated (the
"BORROWER"), in favor of and for the benefit of IIG Capital LLC as agent for IIG
Trade Opportunities Fund N.V. (the "LENDER"), with the approval of Divisas
Mexicanas, S.A. de C.V. ("DIVISAS").
RECITALS
WHEREAS, the Borrower has entered into that certain Promissory Note
dated of even date herewith in favor of the Lender and in the principal amount
of $4,000,000, (as the same may hereafter be amended, supplemented, restated or
otherwise modified from time to time, the "NOTE"; capitalized terms defined in
the Note and not defined herein shall have the meanings ascribed to them in the
Note); and
WHEREAS, it is a condition precedent to the making of the loan by the
Lender evidenced by the Note that the Borrower assign to the Lender the
Borrower's rights and interest in the license agreement between the Borrower and
Divisas (the "LICENSE AGREEMENT").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Lender to make the loan, the parties
hereto agree as follows:
SECTION 1 Assignment of Rights. The Borrower hereby assigns to the Lender
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all right, title and interest in, to and under the License Agreement (including
without limitation all accessions and proceeds arising from such License
Agreement) (the "ASSIGNED RIGHTS"), up to an aggregate amount equal to at least
the aggregate amount of principal, interest, fees and costs accrued under the
Note (the "ASSIGNMENT"). For purposes of this Agreement, the term "PROCEEDS"
includes whatever is receivable or received when proceeds are collected,
exchanged or otherwise disposed of, whether such disposition is voluntary or
involuntary.
SECTION 2 The Borrower Remains Liable. Anything herein to the contrary
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notwithstanding, (a) the Borrower shall remain liable under the License
Agreement, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Lender of any of the rights hereunder shall
not release the Borrower from any of its duties or obligations under the License
Agreement and (c) the Lender shall not have any obligation or liability under
the License Agreement by reason of this Agreement, nor shall the Lender be
obligated to perform any of the obligations or duties of the Borrower thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder by reason of this Agreement.
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SECTION 3 Acknowledgment and Consent. Divisas hereby acknowledges
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and consents to this Agreement and commits to transfer, on and after the date
hereof, all amounts assigned to the Lender under this Agreement to the Lender's
account [describe deposit account] (the "Lender's Account").
SECTION 4 Representations and Warranties. The Borrower represents
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and warrants as follows:
4.1 Binding Obligation. This Agreement is the legally valid and
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binding obligation of the Borrower, enforceable against it in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or
limiting creditors' rights generally and to general principles of equity.
4.2 Delivery of Instruments. All notes, stock certificates, bonds
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and other instruments relating to the License Agreement, if any, have been
delivered to the Lender duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
4.3 Payment Rights Valid. The License Agreement constitutes the
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legal, valid and binding obligation of each party thereto and complies in
all material respects with the provisions of all applicable laws and
regulations, whether federal, state or local, applicable thereto.
4.4 Governmental Authorizations. No authorization, approval or
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other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the perfection by the Lender
of its rights and remedies hereunder.
4.7 Other Information. All information heretofore, herein or
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hereafter supplied to the Lender by or on behalf of the Borrower with
respect to the Assigned Rights is accurate and complete in all material
respects.
4.8 Incorporation of Representations and Warranties. Each
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representation and warranty of the Borrower set forth in the Note is true
and correct in all material respects and such representations and
warranties are hereby incorporated herein by this reference with the same
effect as though set forth in their entirety herein.
SECTION 5 Further Assurances. The Borrower agrees that from time to
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time, at the expense of the Borrower, the Borrower will promptly execute
and deliver all further instruments and documents, and take all further
action, that may be reasonably necessary or desirable, or that the Lender
may reasonably request, in order to perfect and protect any security
interest or other rights granted or purported to be granted hereby or to
enable the Lender to exercise and enforce its rights and remedies hereunder
with respect to the Assigned Rights.
SECTION 6 Lender Appointed Attorney-in-Fact. The Borrower hereby
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irrevocably appoints the Lender the Borrower's attorney-in-fact, with full
authority in the place and stead of the Borrower and in the name of the
Borrower, the Lender or otherwise, from time to time in the Lender's
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discretion to take any action and to execute any instrument that the Lender
may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:
6.1 to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Assigned Rights,
6.2 to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with Section 6.1
above,
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6.3 to file any claims or take any action or institute any
proceedings that the Lender may deem necessary or desirable for the
collection of any amounts due under the License Agreement or otherwise to
enforce the rights of the Lender with respect to the License Agreement,
6.4 to do, at the Lender's option and the Borrower's expense, at
any time, or from time to time, all acts and things that the Lender deems
necessary to protect, preserve or realize upon the Assigned Rights, in
order to effect the intent of this Agreement, all as fully and effectively
as the Borrower might do.
SECTION 7 Lender May Perform. If the Borrower fails to perform any
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agreement contained herein, the Lender may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Lender incurred in
connection therewith shall be payable by the Borrower under Section 11 of this
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Agreement.
SECTION 8 Lender's Duties and Liabilities.
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8.1 The powers conferred on the Lender hereunder are solely to
protect its interest in the Assigned Rights and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
instruments in its possession and the accounting for moneys actually
received by it hereunder, the Lender shall have no duty as to the License
Agreement or the Assigned Rights or as to the taking of any necessary steps
to preserve rights against prior parties or any other rights pertaining
thereto. The Lender shall be deemed to exercise reasonable care in the
custody and preservation of instruments in its possession if such
instruments are accorded treatment substantially equal to that which the
Lender accords its own property.
8.2 The Lender shall not be liable to the Borrower for any loss or
damage sustained by it, that may occur as a result of, in connection with
or that is in any way related to (a) any exercise by the Lender of any
right or remedy under this Agreement or (b) any other act of or failure to
act by the Lender, except to the extent that the same shall be determined
by a judgment of a court of competent jurisdiction to be the result of acts
or omissions on the part of the Lender constituting gross negligence or
willful misconduct.
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8.3 NO CLAIM MAY BE MADE BY THE BORROWER AGAINST THE LENDER OR ITS
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY
SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR
DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY
RELATED TO THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIP ESTABLISHED BY
THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH; AND THE BORROWER HEREBY EXPRESSLY WAIVES, RELEASES AND AGREES
NOT TO XXX UPON ANY SUCH CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED
AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
SECTION 9 Remedies. If any Event of Default shall have occurred and
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be continuing, the Lender may exercise in respect of the Assigned Rights, (a)
all the rights and remedies of a secured party on default under the Uniform
Commercial Code of the State of New York (the "Code") (whether or not the Code
applies thereto), (b) all of the rights and remedies provided for in this
Agreement, the Note and any other agreement between the Borrower and the Lender,
(c) in the case where a default also exists under the License Agreement,
exercise any one or more of Borrower's rights and remedies arising in connection
with the License Agreement and (d) such other rights and remedies as may be
provided by law or otherwise (such rights and remedies of the Lender to be
cumulative and nonexclusive).
SECTION 10 Application of Proceeds. Except as expressly provided
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elsewhere in this Agreement, all proceeds received by the Lender in respect of
any sale of, collection from or other realization upon all or any part of the
Assigned Rights may, in the discretion of the Lender, be held by the Lender and
then, or at any other time thereafter applied, in full or in part by the Lender
against the obligations of the Borrower under the Note in the following order of
priority:
FIRST: To the payment of all reasonable costs and expenses of such
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collection or other realization and all other expenses, liabilities and
advances made or incurred by the Lender in connection therewith and all
amounts for which the Lender is entitled to indemnification hereunder and
all advances made by the Lender hereunder for the account of the Borrower
and for the payment of all costs and expenses paid or incurred by the
Lender in connection with the exercise of any right or remedy hereunder,
all in accordance with Section 11 of this Agreement;
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SECOND: To the ratable payment in full of all obligations owing to the
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Lender by the Borrower; and
THIRD: After payment in full of the amounts specified in the preceding
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paragraphs, to the payment to or upon the order of the Borrower, or
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
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All applications of proceeds to the Borrower's obligations to the
Lender shall be applied to the payment of interest before application of payment
to principal.
SECTION 11 Indemnity and Expenses.
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11.1 The Borrower agrees to indemnify the Lender from and against
any and all claims, losses and liabilities growing out of or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
claims, losses or liabilities resulting from the Lender's gross negligence or
willful misconduct.
11.2 The Borrower will upon demand pay to the Lender the amount of
any and all reasonable expenses, including the reasonable fees and disbursements
of Lender's counsel and of any experts and agents, that the Lender may incur in
connection with (i) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Assigned Rights after
the occurrence of an Event of Default, (ii) the exercise or enforcement of any
of the rights of the Lender hereunder after the occurrence of an Event of
Default or (iii) the failure by the Borrower to perform or observe any of the
provisions hereof.
SECTION 12 Notices. The terms and provisions of Section ___ of the
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Note (including, without limitation, the notice provisions hereof) are hereby
incorporated herein by reference.
SECTION 13 Amendments. No amendment or waiver of any provision of
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this Agreement nor consent to any departure by the Borrower herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Lender and the Borrower, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 14 Counterparts. This Agreement may be executed in one or
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more counterparts, each of which when so executed shall be deemed an original,
but all such counterparts together shall constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
E MERCHANT PROCESSING, INCORPORATED
By:
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Name:
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Title:
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IIG CAPITAL LLC, as agent for IIG Trade Opportunities
Fund N.V.
By:
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Name:
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Title:
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DIVISAS MEXICANAS, S.A. DE C.V.
By:
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Name:
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Title:
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