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EXHIBIT 99.3
LOAN AND SECURITY AGREEMENT
This Loan and Security Agreement is made as of August 6, 1998,
by and between IMARK Technologies, Inc., a Delaware corporation with its
principal office at 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000-0000
("IMARK") and International Advance, Inc., a Delaware corporation ("Advance").
WHEREAS, Advance has extended credit of $400,000 (the "Existing
Credit") to IMARK, which credit is due on demand as of the date hereof;
WHEREAS, IMARK has requested that Advance defer any call with
respect to the Existing Credit and provide to IMARK additional credit in the
principal amount of up to $600,000 (the "Additional Credit"); and
WHEREAS, Advance is willing to defer any call with respect to
the Existing Credit and to provide the Additional Credit (together the "Loan"),
but only upon the terms hereof, including but not limited to receipt of
security for the Existing Credit and the Additional Credit by the grant by
IMARK of a security interest in, and uninhibited access to IMARK's present and
future technologies, and the grant of a security interest in all of IMARK's
other assets; and
WHEREAS, Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx have previously
pledged 400,000 shares of the Common Stock of IMARK to Advance to secure the
Existing Credit and hereby the Loan, and have delivered or simultaneously
herewith are delivering to Advance stock certificates representing such pledged
shares and stock powers duly endorsed in blank;
WHEREAS, IMARK is willing to grant Advance a security interest
in, and uninhibited access to IMARK's present and future technologies, and to
grant a security interest in all of IMARK's other assets; and
WHEREAS, IMARK wishes to evidence the Loan by delivering to
Advance two notes with an aggregate principal amount of up to $1,000,000 each
due October 15, 1998, and each bearing interest at the rate of twelve percent
(12%) per annum, with one note in principal amount of $100,000 also being
convertible into a number of shares of the common stock, par value $0.01 per
share the "Common Stock"), of IMARK equal to 19.9% of the Common Stock then
outstanding.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein and using the defined terms described
in Section 9, the parties agree as follows:
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Section 1. Restructuring of Debt.
1.1 IMARK hereby acknowledges that it is currently
indebted to Advance in the principal amount of $400,000 plus interest.
1.2 From the date hereof through October 10, 1998,
Advance may, at Advance's sole and unfettered discretion, and provided that no
default or Event of Default shall have occurred hereunder, lend to IMARK up to
the principal amount of $600,000. IMARK shall request such additional loans
not more than once every two weeks, by delivering to Advance a borrowing
request accompanied by a detailed description of the uses of all credit
provided by Advance to IMARK through the date of the request and the proposed
uses of the additional funds requested on the date of the borrowing request.
Advance shall not be obligated to provide such additional funds, but this
agreement shall govern the repayment of and security for IMARK's obligation to
repay any funds lent hereunder.
1.3 To evidence the Loan, contemporaneously with the
execution of this Agreement, IMARK is issuing to Advance a convertible
promissory note in the principal face amount of $100,000 in the form of Exhibit
A-1 attached hereto (the "Convertible Note") and a promissory note in the
principal face amount of up to $900,000 in the Form of Exhibit A-2 attached
hereto (together, the "Restructured Notes" or the "Notes").
Section 2. Security Interest.
2.1 Secured Obligations. So long as the Loan or either
of the Restructured Notes or any other Obligation remains outstanding, as
security therefor, IMARK hereby assigns, transfers, pledges and grants to
Advance a continuing general lien upon and a security interest in (a) all of
its Technology and Products, specifically including but not limited to all such
Technology that may be developed on or after the date of this Agreement and (b)
all of its other assets, including but not limited to all Accounts, Chattel
Paper, Inventory, Documents, Equipment, Instruments, General Intangibles (as
such terms are defined in the Uniform Commercial Code as adopted by the State
of Virginia), and all other goods and personal property, including without
limitation, furniture and fixtures, whether tangible or intangible, whether now
existing or hereafter acquired by way of replacement, substitution, addition,
accession or otherwise, and all books and records of account, documents and
papers relating thereto ((a) and (b) collectively, the "Collateral").
2.2 Obligation(s). "Obligation(s)" shall mean all
amounts that may be owed by IMARK to Advance under the Note or this Agreement
or otherwise.
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Section 3. Representations and Warranties.
IMARK represents, warrants and agrees that:
3.1 Information. All information delivered or to be
delivered to Advance pursuant to the replacement and restructure of debt
evidenced by the Replaced Notes is true, correct and complete in all material
respects.
3.2 Ownership of Technology and Collateral. Except as
disclosed in SCHEDULE 3.2, IMARK is the legal and equitable owner of the
Collateral, free and clear of any lien, claim, charge, license, security
interest or encumbrance of any kind and has good right and lawful authority to
pledge, assign the Collateral (including to deliver the use of the Technology)
in the manner hereby done or contemplated; and no consent or approval of any
person, entity, governmental body or regulatory authority is or will be
necessary to the validity of the rights created under this Agreement as to the
Technology or the Collateral.
3.3 Non-Infringement. IMARK warrants that the Technology
does not infringe any patent, trade secret or copyright of any third party.
IMARK hereby indemnifies Advance against and agrees to hold Advance harmless
against any cost, expense, claim or liability arising from any claim of any
such infringement.
3.4 Financial Statements. IMARK has previously delivered
to Advance its unaudited balance sheet as of June 30, 1998 and its unaudited
income statement for the twelve months ended June 30, 1998. Each of such
statements was prepared in accordance with generally accepted accounting
principles ("GAAP"), consistently applied, and such statements present fairly,
in all material respects, the financial position of IMARK as of June 30, 1998
and the results of IMARK's operations for the twelve month period described
herein, subject to normal year-end audit adjustments.
3.5 Interim Period. During the period from July 1, 1998
through the date hereof, except for transactions with Advance, IMARK has not
(a) entered into any transaction outside of the ordinary course of IMARK'
business, (b) incurred any long-term debt, or (c) issued any of its capital
stock or any rights (including warrants and options) to purchase any of its
capital stock.
3.6 Authorization. The Board of Directors of IMARK has
taken all corporate action necessary to approve, execute, deliver and perform
the Restructured Notes, this Agreement, and the License Agreement delivered to
Advance on the date hereof. Except as set forth on Schedule 3.6, no consents
of any person, private entity or governmental entity are required in order for
IMARK to enter into the above agreements or to perform its obligations
thereunder.
3.7 Execution. This Agreement has been duly and validly
executed and delivered by IMARK and constitutes the valid and binding agreement
of IMARK enforceable against IMARK in accordance with its terms.
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3.8 Corporate Existence, Power and Good Standing. IMARK
is a corporation duly organized, validly existing and in good standing under
the laws of Delaware. IMARK has the power and authority to own and lease its
properties and to carry on its business as and where such business is now being
conducted. IMARK is qualified to do business as a foreign corporation in
Virginia, and is not required to be qualified in any other jurisdiction where
failure to so qualify would have a material adverse effect on the business or
financial condition of IMARK or its assets.
3.9 No Conflict; No Consents. Except as set forth on
Schedule 3.9, the execution, delivery and performance of this Agreement by
IMARK does not and will not:
(a) conflict with or result in a breach of the Articles of
Incorporation or Bylaws of IMARK;
(b) conflict with or result in a breach of any contract or
commitment to which IMARK is a party or by which it is bound, or result in the
right of acceleration or any similar right of any other party under any such
contract or commitment;
(c) violate or conflict with any laws, ordinances, codes, rules,
regulations, judgments, orders or decrees of governmental, administrative or
judicial authorities applicable to IMARK or any of its businesses or
properties;
(d) require any authorization, consent, order, permit, license or
approval of, or notice to, or filing, registration or qualification with, any
governmental, administrative or judicial authority; or
(e) require any notice to, filing with or authorization,
registration, consent or approval of any Person (other than a governmental
agency) pursuant to any contracts, agreement, indentures, credit agreements,
leases or otherwise.
3.10 Litigation. Except as set forth on SCHEDULE 3.10 and
except for claims resulting from IMARK's failure to pay its creditors in a
timely fashion, no claim, suit, action, governmental investigation or
litigation, or legal, administrative, arbitration or other proceeding of any
kind (domestic or foreign) is pending or threatened against, relating to or
involving IMARK (whether as plaintiff or defendant), or its property or
business, nor does IMARK know of any ground for any such claim, suit, IMARK,
investigation, litigation or proceeding. Except as set forth on SCHEDULE 3.10,
IMARK is not subject to any outstanding order, writ or decree of any court or
other governmental authority (domestic or foreign).
3.11 SEC Documents. IMARK is a corporation subject to the
reporting requirements of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx
Xxx"). IMARK has filed all required reports, schedules, forms, statements, and
other documents with the Commission since August 13, 1996 (the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act or the
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Exchange Act, as the case may be, and the rules and regulations of the
Commission promulgated thereunder applicable to such SEC Documents, and none of
the SEC Documents contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. The financial statements of IMARK included in the
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the
case of unaudited financial statements, as permitted by SEC Form 10-Q) applied
on a consistent basis during the periods involved (except as may be indicated
in the notes thereto) and fairly present the financial position of IMARK as of
the date thereof and its statements of operations, changes in shareholders'
equity and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set
forth in the SEC Documents, to IMARK's knowledge, IMARK does not have any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) required by GAAP to be set forth on a balance sheet of IMARK or
in the notes thereto, other than liabilities and obligations incurred in the
ordinary course of business consistent with the past practice and experience
since March 31, 1998.
Section 4. Covenants.
4.1 Payment Covenant. IMARK will pay all amounts due
under the Restructured Notes in accordance with their terms and provisions.
4.2 Board Representation. Until both of the Restructured
Notes are satisfied in full, IMARK will use its best efforts to cause up to two
designees of Advance to be elected to IMARK's Board of Directors. Without
limiting the generality of the foregoing, IMARK shall:
(a) increase the size of the current Board of Directors
by up to two positions and shall appoint Advance's designee or
designees to a vacancy created by this increase;
(b) nominate and support the election of up to two
designees of Advance as part of management's proposed directors
at any meeting of shareholders called for the purpose of
electing directors; and
(c) in any election of directors, solicit proxies of
shareholders for the purpose of electing Advance's designees and
vote any shareholder's proxy which IMARK's management has the
discretion to vote for the election of Advance's designees.
In the event that notwithstanding such best efforts, Advance's
designee is not elected to IMARK's Board, or in the event that Advance notifies
IMARK that it does not wish its designees to serve on IMARK's Board, then,
until both the Restructured Notes are fully paid, IMARK shall invite (with
suitable prior written notice) up to two Advance designees (or one
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designee if an Advance designated director is on the Board) to each meeting of
IMARK's Board of Directors, to each meeting of each committee of IMARK's Board
of Directors, and shall invite at least two representatives of Advance to each
meeting of IMARK's shareholders. IMARK shall provide to any Advance designees
the same information as the information which any director of IMARK receives or
is entitled to receive. Furthermore, IMARK shall give Advance reasonable prior
written notice of any action proposed to be taken by IMARK's Directors or
shareholders upon the receipt of a requisite number of signed consents.
4.3 Maintenance of Collateral. IMARK will maintain the
Collateral as is appropriate to protect IMARK against loss from fire, theft,
computer failure or other casualty and will not waste or destroy the Collateral
or any part of it and will defend the Collateral against the claims and demands
of all third persons. Nothing in this Section will prohibit IMARK from
destroying or not pursuing work in progress which IMARK determines to be
commercially impractical.
4.4 Perfecting Security Interest. IMARK agrees to perform
any and all steps requested by Advance to perfect the security interest granted
herein by way of filing notices of lien, financing statements, continuation
statements or amendments thereto, and grants to Advance the right to sign on
behalf of IMARK and file any of the above in which IMARK's signature is
required. Where Collateral or any of the proceeds thereof are in the hands of
third parties, agents or custodians of IMARK, IMARK shall, after default and on
Advance's request, notify such third parties, agents or custodians of Advance's
security interest therein, and instruct them to hold the same for Advance's
account and subject to Advance's instructions. IMARK will also execute
Financing Statements to be filed in the State of Virginia and the Circuit Court
of the County of Fairfax that will give notice of Advance's rights under the
License Agreement between IMARK and Advance.
4.5 Payment of Charges by IMARK. IMARK shall pay prior
to delinquency all taxes, charges, liens and assessments against the
Collateral. Upon IMARK's failure to pay, Advance at its option may pay any
tax, charge, lien or assessment and shall be the sole judge of the legality or
validity thereof and the amount necessary to discharge the same. Such payment
by Advance shall be reimbursed by IMARK immediately upon demand, with interest
thereon from the date of payment by Advance at the maximum rate of interest
permitted by applicable law with respect to IMARK.
4.6. Collateral Control; Insurance. IMARK shall provide
Advance promptly with any information (in addition to the insurance policies
described below) concerning the Collateral which shall be reasonably required
by Advance. So long as no event of default exists under this Agreement, IMARK
shall be entitled to receive and collect, compromise and settle all proceeds of
the Collateral. Upon a default under this Agreement, IMARK's right to collect
said proceeds shall be terminated and IMARK shall hold all of said proceeds in
trust for the account of Advance in a separate lock box or specifically
designated account, and shall deliver the same to Advance in the identical form
received. IMARK shall maintain appropriate policies of insurance, insuring all
of IMARK's chattels and real property as shall be required by Advance,
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which policies shall be in form satisfactory to Advance and shall be issued by
insurers licensed and authorized to issue such policies.
4.7 Reservation of Shares. IMARK covenants that it will
at all times reserve and keep available out of its authorized Common Stock,
solely for the purpose of issue upon exercise of the Convertible Note, such
number of shares of Common Stock as shall then be issuable upon conversion of
the Convertible Note. IMARK covenants that all shares of Common Stock which
shall be issuable upon conversion of the Convertible Note shall be duly and
validly issued and fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue.
4.8 Negative Covenants. During the term of this
Agreement, IMARK shall not (without Advance's prior written consent):
(a) take any action which will interfere or conflict in
any respect with Advance's interest in the Technology as
contemplated herein; or
(b) take or permit any action that may impair the value
or security of any Collateral, including to sell, assign,
mortgage or grant a security interest or suffer any lien against
any of the Collateral unless the Advance shall have signed a
subordination agreement acceptable to Advance.
4.9 Financial Statements. IMARK shall deliver to Advance
the following:
(a) within 30 days after the end of each monthly
accounting period of IMARK, an unaudited financial report that
includes a profit and loss statement for such month, together
with a cumulative profit and loss statement from the first day
of the current fiscal year to the last day of such month which
reports shall be prepared in accordance with GAAP except for
footnotes customarily required by GAAP and normal year-end
adjustments.
4.10 Non-Disturbance. IMARK shall obtain the written
agreement of each person who presently holds a security interest in any
Collateral, if any, (in the form of an intercreditor agreement acceptable to
Advance) to the effect that, so long as Advance is not in default under the
License Agreement, such security holder's lien shall be subordinate to
Advance's lien and such securityholder not interfere with the exercise by
Advance of its rights under this Agreement or the License Agreement (a
"Non-Disturbance Agreement").
4.11 Ratification of Subscription Agreement. IMARK and
Advance each agree to use their best efforts to perform their respective
obligations under the Subscription Agreement dated as of June 15, 1998 (the
"Subscription Agreement") between IMARK and Advance and to consummate the
transactions thereunder. IMARK also agrees, in lieu of obtaining a waiver of
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the requirement of shareholder approval of the transactions contemplated by the
Subscription Agreement, to promptly take all steps necessary or desirable to
obtain shareholder approval of such transactions prior to October 15, 1998
including but not limited to promptly filing a preliminary proxy statement with
the Securities and Exchange Commission and using its best efforts thereafter to
cause such preliminary Proxy Statement to be approved by the SEC and
distributed to its shareholders. It is anticipated that if IMARK is able to
timely obtain shareholder approval and satisfy the conditions precedent
contained in the Subscription Agreement, the closing of the transactions
contemplated by the Subscription Agreement will be the source of repayment of
the Restructured Notes; however, IMARK shall remain bound to repay the
Restructured Notes in accordance with their terms whether or not the
transactions contemplated by the Subscription Agreement are consummated.
Section 5. Duties of Advance.
5.1 Duty of Care. Advance shall use reasonable care in
the custody and the preservation of the Technology in Advance's possession.
5.2 Confidentiality. Advance covenants and agrees that
at all times it will keep secret all Technology designated by IMARK to be
confidential and that, except as contemplated or permitted by the License
Agreement, it will not divulge the same to any person, firm or corporation
without prior written consent of IMARK. The provisions of this Section 5.2
shall not apply to information which is or becomes part of the public domain
from sources other than Advance, information which Advance has in its
possession or knowledge (other than as provided to Advance by IMARK) as of the
date of this Agreement, information which Advance receives from third parties
owing no obligation of confidentiality to IMARK, and information which Advance
independently develops subsequent to the date of this Agreement. Advance
covenants and agrees to take all precautions reasonably necessary to ensure
that persons purchasing, leasing or using the Technology are made aware that
title to the Technology resides in IMARK for any purpose other than use in
connection with Advance's products, and such users may not copy (except as
permitted in agreements between IMARK and Advance), disclose, attempt to
disassemble or decompose software which implements the Technology.
Notwithstanding the foregoing, it is understood that in the event of any
inconsistency between the provision of this Section 5.2 and the provisions of
any other confidentiality agreement between Advance and IMARK, the provisions
of such other agreement shall govern, except that no provision in this
Agreement is intended to preclude Advance from incorporating IMARK's Technology
and/or products into products sold by Advance or to require Advance to obtain
confidentiality agreements (other than such confidentiality agreements as
Advance is able to obtain from its customers in the ordinary course of its
business) from customers who purchase products from Advance which incorporate
IMARK's Technology or Products or both, or from sublicensing the Technology
pursuant to the License Agreement.
5.3 Non-liability of Advance. So long as Advance has not
breached its obligations under Section 5.2 above or under any other
Confidentiality Agreement with IMARK, Advance shall not be responsible in any
way for any depreciation in the value of the Technology, nor shall any duty or
responsibility whatsoever rest upon Advance to take necessary steps to
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preserve rights against prior parties or to enforce rights in the Technology by
legal proceedings or otherwise.
5.4 Xxxxxxx Xxxxxxx. Advance covenants that it will not,
and it will inform its officers, directors, employees, advisors or affiliates
that they may not, trade in shares of IMARK while in possession of material
non-public information.
Section 6. Default.
6.1 Events of Default. IMARK shall be in default under
this Agreement and it shall be deemed to constitute an Event of Default
hereunder if any of the following events or conditions occurs:
(a) Default in the payment of any amount due under the
Restructured Notes or any other Obligation.
(b) If any warranty, representation, or statement made or
furnished to Advance by or in behalf of IMARK proves to have
been false in any material respect when made or furnished or as
of the date on which this Agreement is executed.
(c) Failure of IMARK to perform any covenant made in this
Agreement which failure continues for a period of thirty (30)
days after IMARK receives written notice from Advance specifying
such default.
(d) Loss, theft, substantial damage, destruction, sale,
license, encumbrance, or the making of any levy, seizure, or
attachment of or on the Collateral.
(e) IMARK (i) shall generally not, or be unable to, or
shall admit in writing its inability to, pay its debts as such
debts become due; (ii) shall make an assignment for the benefit
of creditors, petition or apply to any tribunal for the
appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute
of any jurisdiction, whether now or hereafter in effect; (iv)
shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it, in which
an adjudication or appointment is made or order for relief is
entered, or which petition, application or proceeding remains
undismissed for a period of 60 days or more; (v) by any act or
omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or
order for relief or
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the appointment of a custodian, receiver or trustee for all or
any substantial part of its property; or (vi) shall suffer any
such custodianship, receivership or trusteeship to continue
undischarged for a period of 30 days or more.
(f) Breach by IMARK of any of its obligations under the
Subscription Agreement or any other agreement between the
parties.
6.2 Rights in the Event of Default. Upon the occurrence
of an Event of Default and at any time thereafter:
(a) Acceleration. Advance may declare the outstanding
principal of the Restructured Notes, all interest thereon and
all other Obligations to be forthwith due and payable, whereupon
the Restructured Notes, all such interest and all such
Obligations shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by IMARK.
(b) Set off. Advance may withhold from any amount due
from Advance to IMARK under the License Agreement an amount or
amounts equal to the amount of any Obligation that is due and
payable by IMARK under this Agreement. This right of set off
shall not be deemed to be exclusive of any other right or remedy
of Advance, nor shall Advance be required to exhaust any other
remedy before exercising its right of set off hereunder,
provided, however, that if the Event of Default is an event
described in Section 8.1(f) of this Agreement, Advance hereby
waives any right of setoff with respect to amounts due under the
License Agreement and any claim allowable under Section 503(b)
of the Bankruptcy Code arising from IMARK's performance of or
failure to perform the License Agreement.
(c) Direct Recourse. Advance may institute suit directly
against IMARK to collect any Obligations without first
foreclosing on or liquidating any Collateral.
(d) Deficiency. Advance may hold IMARK liable for any
deficiency that may remain after the sale of any Collateral.
(e) Other Creditor Remedies. If an Event of Default
described in Section 6.1(d) shall have occurred, Advance may
also exercise any right or remedy available to a secured
creditor under the Uniform Commercial Code or under any other
law of any
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jurisdiction; provided, however, that if Advance should
foreclose its security interest in the Collateral, it may only
(i) retain the Collateral, or (ii) sell it as part of a sale of
Advance.
(f) Collection of Expenses. Advance may collect from
IMARK (i) all reasonable fees and disbursements of Advance's
attorneys incurred in obtaining advice or representation
relating to the collection or enforcement of any Obligation and
(ii) all reasonable expenses of, or in anticipation of,
litigation including fees and expenses of witnesses, experts and
stenographers and the cost to obtain or produce appraisals. All
such collection fees and expenses shall be due and payable upon
demand and shall be an Obligation secured by all Collateral.
(g) Other Remedies. Advance may exercise any other rights
or remedies it may have under any other agreement with IMARK or
Obligation.
(h) Advance shall have the right to use the Technology in
the conduct of its business and may incorporate the Technology
in products it sells, subject to payment to IMARK for such use
on terms consistent with the best terms and conditions (from the
perspective of a customer) offered to any other customer of
IMARK for the same or similar products or technologies, and the
right to sublicense the Technology subject to the payment of the
Royalties described therein, In each case, payment may be
applied against the Restructured Notes.
(i) ADVANCE MAY ENFORCE ITS RIGHTS UNDER THIS AGREEMENT
WITHOUT RESORT TO PRIOR JUDICIAL PROCESS OR JUDICIAL HEARING,
AND IMARK EXPRESSLY WAIVES, RENOUNCES AND KNOWINGLY RELINQUISHES
ANY LEGAL RIGHT WHICH MIGHT OTHERWISE REQUIRE ADVANCE TO ENFORCE
ITS RIGHTS BY JUDICIAL PROCESS. IN SO PROVIDING FOR A
NON-JUDICIAL REMEDY, IMARK RECOGNIZES AND CONCEDES THAT SUCH A
REMEDY IS CONSISTENT WITH THE USAGE OF THE TRADE, IS RESPONSIVE
TO COMMERCIAL NECESSITY AND IS THE RESULT OF BARGAINING AT ARM'S
LENGTH. NOTHING IN THIS AGREEMENT IS INTENDED TO PREVENT IMARK
OR ADVANCE FROM RESORTING TO JUDICIAL PROCESS AT EITHER PARTY'S
OPTION;
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(j) Delay. Advance may delay exercising or omit to
exercise any right or remedy under this Agreement without
waiving that or any other past, present or future right or
remedy, except in writing signed by Advance.
(k) Waivers. Advance may remedy any default and may waive
any default without waiving the default remedied or without
waiving any other prior or subsequent default.
(l) Cooperation. IMARK hereby agrees to cooperate fully
with Advance in order to permit Advance to utilize the
Technology.
6.3 IMARK Rights. If Advance has breached its
obligations to IMARK under the Subscription Agreement, IMARK may set off its
damages against any amounts due to Advance under the Restructured Notes.
Section 7. Advance. If IMARK fails to perform any
agreement contained herein, Advance may itself perform or cause performance of,
such agreement, and the expense of Advance incurred in connection therewith
shall be payable by IMARK and secured by this Agreement.
Section 8. Conditions Precedent. Simultaneously with
execution of this Agreement, and prior to the first borrowing under the
Additional Credit, IMARK shall deliver to Advance the following documents:
(a) the Restructured Notes executed by IMARK;
(b) executed Form UCC-1's in form appropriate for filing
in the jurisdictions listed in Section 4.4 and all other
jurisdictions in which filing is necessary to perfect the
security interests created hereunder;
(c) such other documents as are required to be filed to
perfect any other security interests created hereunder;
(d) an opinion letter of Xxxxxxxxx Xxxxxxx reasonably
acceptable to Advance with respect to due incorporation, due
authorization, enforceability and perfection of security
interests;
(e) Subordination and Non-Disturbance Agreements in form
reasonably acceptable to Advance from all secured creditors of
IMARK, including but not limited to those listed on Schedule
3.2; and
(f) the borrowing request described in Section 1.2.
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Section 9. Miscellaneous.
9.1 Assignment Prohibited. This Agreement and/or the
rights granted hereunder may not be assigned by IMARK without the prior written
consent of Advance, which consent may be withheld for any reason or for no
reason at all.
9.2 Term of Agreement. The term of this Agreement shall
commence on the date of this Agreement and end upon full payment of the
Restructured Notes; provided, however, that all warranties, representations and
indemnities shall survive the termination of this Agreement.
9.3 Headings. Headings used in this Agreement are to
facilitate reference only, do not form a part of this Agreement, and shall not
in any way affect the interpretation hereof.
9.4 Pronouns. The pronouns used in this instrument are
in the masculine gender but shall be construed as feminine or neuter as
occasions may require.
9.5 Parties. "Advance" and "IMARK" as used in this
Agreement include the successors, representatives, receivers, and assigns of
those parties.
9.6 Applicable Law. The law governing this secured
transaction shall be that of the Commonwealth of Virginia.
9.7 Entire Agreement. This Agreement and all schedules
and exhibits annexed hereto constitute the entire agreement among the parties
respecting the subject matter hereof and supersedes all prior agreements among
the parties relative to the subject matter hereof. This Agreement may not be
modified or amended except by a writing which states that it is an amendment to
this Agreement and which is signed by a duly authorized representative of each
of the parties.
9.8 Notices. All notices required or permitted to be
given hereunder shall be in writing and shall be valid and sufficient if
dispatched either (i) by telex, cable or facsimile transceiver, with confirming
letter mailed promptly thereafter in accordance with clause (ii) hereof, or
(ii) by reputable overnight express mail courier or by certified mail, postage
prepaid, return receipt requested, deposited in any post offices in the United
States, as the case may be, if to IMARK addressed to the address set forth on
the first page of this Agreement or if to Advance to 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxx XX0X0XX, with a copy to Xxxx Xxxxxxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC,
00 Xxxxxxxxxx Xxxxxx, XX 00000, or to such other addresses as may be
provided, from time to time. Either party may change its address by notice
given to the other party in the manner set forth above. When sent by cable or
facsimile as aforesaid, notices given as herein provided shall be considered to
have been received when sent; otherwise, notices shall be considered to have
been received only upon delivery or attempted delivery during normal business
hours.
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9.9 Severability. In the event of any of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such provision shall not affect the validity,
legality or enforceability of any other terms or provisions of this Agreement
and, to the extent permitted by applicable law, a valid, legal and enforceable
provision substantially similar to the invalid, illegal or unenforceable
provision shall be substituted in lieu thereof.
9.10 Time Waiver. IMARK agrees that in performing any act
under this Agreement and the Note, time shall be of the essence and that
Advance's acceptance of partial or delinquent payments, or failure of Advance
to exercise any right or remedy shall not be a waiver of any obligation of
IMARK or right of Advance or constitute a waiver of any other similar default
subsequently occurring.
9.11 Arbitration. All disputes arising out of or relating
to this Agreement or the transactions contemplated by this Agreement may upon
the request of either party, be settled by arbitration conducted in accordance
with the rules then in effect of the American Arbitration Associations ("AAA")
by a panel of three arbitrators selected by the AAA, at least one of whom must
have substantial experience in computer hardware and software technology
licensing. The arbitration shall be conducted in New Jersey and the decision
and award of the arbitrators shall be final and binding on the parties and a
judgment upon such decision or award may be entered in any court of competent
jurisdiction. The parties shall pay equal shares of the costs and expenses of
the arbitration proceeding but each party shall pay its own legal fees and
other costs.
Section 10. Certain Terms.
10.1 The following terms shall have the meaning specified
in this section for all purposes of this Agreement.
(a) Collateral. "Collateral" shall have the meaning
specified in Section 2.1.
(b) Common Stock. "Common Stock" shall mean shares of
common stock, $0.01 par value per share, authorized by IMARK's
Articles of Incorporation.
(c) Event of Default. "Event of Default" shall mean any
of the events enumerated in Section 6.1.
(d) License Agreement. "License Agreement" shall mean
that certain technology license agreement between IMARK and
Advance dated August __, 1998 as the same may be amended.
(e) Product. "Product" shall mean a hardware, firmware or
software implementation of a version of the Technology.
(f) Technology. "Technology" shall mean all
internet-based and CD-ROM-based electronic commerce services
capabilities whether already developed or
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hereafter developed, or made, owned, discovered or licensed on a
sub-licensable basis by IMARK, including, without limitation,
all versions of NET-MAX and CD-MAX, other software, hardware,
firmware, custom and semi-custom components, algorithms,
know-how, trade secrets, confidential information, Source codes,
object codes, designs, plans, specifications, magnetic media and
other forms of recorded information.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as set forth below, all as of
the date first set forth above.
IMARK TECHONOLOGIES, INC. INTERNATIONAL ADVANCE, INC.
By: /s/ XXXXXX X. XXXXXXXX By: /s/ XXXXXX XXXXXX
-------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxx Xxxxxx
Title: President Title: President
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