EXHIBIT 10.63
FUNDING AGREEMENT
FUNDING AGREEMENT, dated as of June 16, 2000 (this "AGREEMENT"), among THE
INTRAC GROUP, LTD., a Delaware corporation ("INTRAC"), ATM SERVICE, LTD., a New
York corporation ("ATM"), XXXXXX X. XXXXXXXXX ("XXXXXXXXX"), XXXX X. XXXX
("XXXX", and together with Xxxxxxxxx and Xxxxxxxxx, the "INDIVIDUAL
SHAREHOLDERS"), and WORLDWIDE WEB NETWORX CORPORATION, a Delaware corporation
("WWWX").
ARTICLE I
FUNDING
SECTION 1.01. SHAREHOLDINGS. (a) The following represents all of the
equity interests of any nature in ATM:
WWWX 52%
Xxxxxxxxx 24%
Settineri 18%
Levi 6%
----
Total 100%
(b) The following represents all of the equity interests of any nature
in Intrac:
WWWX 100%
SECTION 1.02. AMOUNTS TO BE FUNDED. As determined by the Board of
Directors of WWWX, to preserve the value of WWWX's investments in each of ATM
and Intrac, WWWX will loan amounts to each of ATM and/or Intrac (collectively,
"ADVANCES"), as directed by the President of ATM and Intrac, to meet payroll
obligations in the amounts and on the dates set forth below:
$ 45,000 June 16, 2000
$ 38,000 June 23, 2000
$ 58,000 June 30, 2000
SECTION 1.03. MANNER OF FUNDING. All disbursements made by WWWX pursuant
to this Agreement will be made by wire transfer basis of immediately available
funds to an ATM and/or Intrac account designated by the President of ATM and
Intrac (the "Account").
Until the Advances are repaid, two Individual Shareholders must sign and
authorize all checks, drafts, wire instructions or any other debit transactions
with respect to the Account and any and all other ATM and Intrac accounts now
existing or as shall exist during the term of the Agreement.
SECTION 1.04. NOTE. Each of ATM and Intrac will execute a promissory a
note in favor of WWWX (the "NOTE"), upon the signing of this Agreement, in
principal amount equal to the aggregate amount of the Advances.
2
SECTION 1.05. INTEREST. The Advances will bear interest at an annual rate
equal to the prime rate plus 200 basis points, from the date of each Advance,
payable 120 days from the date of the Note.
SECTION 1.06. MANDATORY PREPAYMENT; PERMISSIVE PREPAYMENT. In the event
that ATM or Intrac raises funding in excess of $750,000 or sells or transfers
any of its shares (an "Event"), immediate repayment of all outstanding Advances
must be made together with all accrued and unpaid interest to the date of
prepayment. The Note may be prepaid by ATM and/or Intrac, at any time, without
penalty.
SECTION 1.07. SECURITY.
(a) Xxxxxxxxx will pledge 750,000 shares of common stock of WWWX that he
owns (the "SHARES") as security for the Advances.
(b) Should the Shares decline to a saleable value of less than three times
the sum of the Advances and accrued interest (the "Coverage Ratio"), ATM and/or
Intrac will pay down the amount due under the Note, so that the Coverage Ratio
is not exceeded, or one or more of the Individual Shareholders will pledge
additional WWWX common stock sufficient to meet the Coverage Ratio.
(c) Simultaneously with the execution and delivery of this Agreement,
Xxxxxxxxx will execute and deliver to the WWWX Board of Directors an irrevocable
stock power with respect to the Shares, in form satisfactory to WWWX.
ARTICLE II
CONDUCT OF BUSINESS
SECTION 2.01. REPORTING. ATM and Intrac shall provide the following
reports to WWWX certified by at least two of the Individual Shareholders in
their corporate capacities as being true and correct: (a) bi-weekly (on the
first business day of each week) written reports, detailing (1) any Material
events, (2) the status of all Material contracts and relationships and
collections thereon, and (3) actions that they and their staff have taken to
advance the interests of ATM and/or Intrac; (b) monthly and quarterly financial
statements, showing variations from budgets with explanations for all
variations, to be provided not later than 15 business days following the close
of the respective periods (c) detailed monthly and quarterly budgets and
projections, together with explanations detailing the basis of such budgets and
projections for the following one year period, to be provided not later than 15
business days following the close of the respective periods. As used in this
Agreement, "MATERIAL" means any event, contract, liability, lien, obligation,
commitment, or other action that may result in the payment or receipt of amounts
in excess of $ 50,000.
3
SECTION 2.02. BOARD MEMBERSHIP. The Individual Shareholders hereby agree
to elect and seat WWWX's two previously selected nominees to the seats on the
board of directors of ATM and Intrac.
SECTION 2.03. BEST EFFORTS. The Individual Shareholders agree to use their
best efforts to develop the business of each of ATM and Intrac as directed by
the Board of Directors of each of ATM and Intrac.
SECTION 2.04. DEFAULT. A "DEFAULT" shall have occurred if:
(a) ATM, Intrac, or any Individual Shareholder violates any term of this
Agreement; or
(b) ATM or Intrac fails to pay any amounts due under any Note in
accordance with its terms.
SECTION 2.05. REMEDIES ON DEFAULT. In addition to any other remedies
available to it, if a Default has occurred, WWWX may
(a) Increase the rate of interest charged on the Notes by 2.5%;
(b) Foreclose on the Shares and, at its option, deposit the Shares in
WWWX's treasury or retire them, in an amount sufficient to repay the
Notes; and
(c) Exercise any other rights and remedies available to WWWX at law or
in equity.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. NOTICES. Each notice, direction, consent, approval, demand,
report, or other communication relating to this Agreement shall be in writing,
shall be hand-delivered or sent by mail (postage prepaid), air courier, or
facsimile transmission to the address under each party's name on their
respective signature page to this Agreement or to such other address or number
as each party shall have last specified by notice to the other parties:
SECTION 3.02 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED
STATES OF AMERICA, WITHOUT REGARD THE CONFLICTS OF LAW OR CHOICE OF LAW
PROVISIONS THEREOF.
SECTION 3.03. SUCCESSION. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the parties hereto; PROVIDED that
no Individual Shareholder may assign or delegate all or any part of their
respective interests or obligations herein or hereunder.
4
SECTION 3.04. INTEGRATION. This Agreement embodies the entire
understanding of the parties hereto, and supersedes all prior negotiations,
understandings, and agreements between them with respect to the subject matter
hereof (except for the provisions of the Shareholders Agreement between the
parties that are not inconsistent with this Agreement).
SECTION 3.05. AMENDMENTS. The provisions of this Agreement may be waived,
supplemented, or amended only by an instrument in writing.
SECTION 3.06. SEVERABILITY. If any provision of this Agreement is
prohibited or held to be invalid, illegal, or unenforceable in any jurisdiction,
the parties hereto agree, to the fullest extent permitted by law, that (i) the
validity, legality, and enforceability of the other provisions of this Agreement
in such jurisdiction shall not be affected or impaired thereby and (ii) any such
prohibition, invalidity, illegality, or unenforceability shall not render such
provision or any of such other provisions prohibited, invalid, illegal, or
unenforceable in any other jurisdiction.
SECTION 3.07. NO WAIVER. (a) No failure or delay by WWWX in exercising any
right, power, or remedy shall operate as a waiver thereof or otherwise impair
any of its rights, powers, or remedies. No single or partial exercise of any
such right, power, or remedy shall preclude any other or further exercise
thereof or the exercise of any other legal right, power, or remedy. No waiver of
any such right, power, or remedy shall be effective unless given in writing.
(b) The rights, powers, and remedies provided for herein are cumulative
and are not exclusive of any other right, power, or remedy provided by law or in
any other document. The assertion or employment of any right, power, or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion of any other
appropriate right, power, or remedy.
SECTION 3.08. COOPERATION. Each party hereto shall take all actions within
its power, and execute all such documents, as may be appropriate or desirable:
(i) to give full effect to the rights and obligations hereunder of the parties
hereto; and (ii) in furtherance thereof, to complete the transfer to WWWX of all
rights to which WWWX may be entitled hereunder or under any other document,
including without limitation, all rights with respect to the Shares.
SECTION 3.09. WAIVER OF JURY TRIAL. ATM, INTRAC, ROTHSTEIN, SETTINERI,
LEVI, AND WWWX EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING
OUT OF THIS AGREEMENT, OR ANY DOCUMENT OR AGREEMENT ENTERED INTO IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 3.10. INDEMNITY. ATM and Intrac (each an "INDEMNITOR"), jointly
and severally, shall, at all times, indemnify and hold harmless (collectively,
the "INDEMNITY") WWWX and each of WWWX's directors, officers, employees, agents,
counsel, and advisors (each, an "INDEMNIFIED PERSON") in connection with any
loss, claim (including the cost of defending against such claim), damage,
liability, penalty, or other expense which an Indemnified Person may incur or to
which an Indemnified Person may become subject arising out of or relating to
this Agreement (each, a "LOSS"). The Indemnity shall not apply to the extent
that a court or arbitral tribunal with
5
jurisdiction over the subject matter of the Loss and over WWWX and each other
Indemnified Person who has a Loss in connection therewith, and at which WWWX and
such other Indemnified Person had an adequate opportunity to defend its
interests, determines that such Loss resulted from the gross negligence or
willful misconduct of the Indemnified Person. The Indemnity (i) shall survive
the expiration or other termination of this Agreement, the repayment of the
Note, and the provision of any subsequent or additional indemnity by any Person
and (ii) is independent of and in addition to any other agreement to pay any
amount to WWWX, and any exclusion of an obligation to pay any amount under this
Section shall not affect the requirement to pay such amount under any other
section hereof or under any other agreement. The requirement in this Section
that costs of defense be borne by the Indemnitors shall not vest in them the
right or power to control the defense of any Indemnified Person. Each Indemnitor
agrees not to assert, and not to cause or permit any other Indemnitor to assert,
on any theory of liability, any claim against any Indemnified Person for
special, indirect, consequential, or punitive damages.
SECTION 3.11. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original and all of which together shall constitute one and the same instrument.
[Balance of this page intentionally left blank]
S-1
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed and delivered on its behalf by its duly authorized representative as of
the date first above written.
THE INTRAC GROUP, LTD.
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
Notice Address:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax (000) 000-0000
ATM SERVICE, LTD.
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
Notice Address:
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Fax (000) 000-0000
[Signature Page to Funding Agreement]
S-2
/s/ XXXXXX X. XXXXXXXXX
---------------------------
XXXXXX X. XXXXXXXXX
Notice Address:
0 Xxxxxxxx Xxxxx, XX 00
Xxxxxx, XX 00000
Fax (000) 000-0000
/s/ XXXX X. XXXX
---------------------------
XXXX X. XXXX
Notice Address:
000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Fax (000) 000-0000
WORLDWIDE WEB NETWORX
CORPORATION
/s/Xxxxxx X. Xxxxx
By: -------------------------
Name: Xxxxxx X. Xxxxx
Title: President and CEO
Notice Address:
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Fax (000) 000-0000
[Signature Page to Funding Agreement
