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EXHIBIT 3
**NOTE: PURSUANT TO INSTRUCTION 2 TO ITEM 601
OF REGULATION S-K, A SCHEDULE OF DETAILS OF VARIOUS
LOAN AND PLEDGE AGREEMENTS DIRECTLY FOLLOWS THIS FORM**
LOAN AND PLEDGE AGREEMENT
This LOAN AND PLEDGE AGREEMENT (this "AGREEMENT") is made as of
January 30, 2001, by and among World Commerce Online, Inc., a Delaware
corporation (the "COMPANY"), and Interprise Technology Partners, L.P., a
Delaware limited partnership ("LENDER").
RECITAL
The Company has requested Lender to lend it up to Five Hundred
Thousand Dollars ($500,000) and Lender 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 LOAN
1.1. THE LOAN. Lender agrees, on the terms and conditions
hereinafter set forth, to make loans to the Company in the aggregate principal
amount of Five Hundred Thousand Dollars ($500,000) (the "LOAN"). The proceeds of
the Loan shall be used by the Company for general working capital purposes.
1.2. THE LENDER NOTE. The Loan shall be evidenced by a Senior
Secured Promissory Note dated the date hereof (the "LENDER NOTE"), representing
the obligation of the Company to repay the Loan, together with interest thereon.
A form of the Lender Note is attached hereto as Exhibit A. The Company
authorizes Lender to endorse the date and amount of the Loan and any prepayment
on the schedule annexed to and constituting a part of the Lender 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
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recording shall not, however, limit or otherwise affect the obligations of the
Company to repay the principal amount of the Loan together with all interest
accruing thereon.
1.3. REPAYMENT. The outstanding principal and interest is
payable immediately upon receipt by the Company of written demand for payment
from Lender at which time all of the outstanding and unpaid principal and
interest shall be immediately due and payable (the "MATURITY DATE"). All
payments of principal and interest shall be made in U.S. Dollars.
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 LENDER WARRANT. The Company shall issue to Lender a
warrant dated the date hereof, in the form attached hereto as Exhibit B (the
"Lender Warrant").
SECTION 2. CONDITIONS PRECEDENT
2.1. DOCUMENTS REQUIRED FOR CLOSING. The obligation of Lender
to make the Loan is subject to the conditions precedent that the Company shall
have delivered to Lender prior to the disbursement of the Loan the following:
(a) THIS AGREEMENT. This Agreement, duly executed by
an authorized officer of the Company and Lender.
(b) THE LENDER NOTE. The Lender Note, duly executed
by an authorized officer of the Company.
(c) THE LENDER WARRANT. The Lender Warrant, duly
executed by an authorized officer of the Company.
(d) OPINION OF COUNSEL. The opinion, addressed to
the Lender, of Xxxxxxxxx Xxxxxxx, P.A., counsel for the Company, dated the date
hereof, concerning corporate existence, authority and enforceability of this
Agreement, the Lender Note and the Lender Warrant.
(e) UCC-1. Copies of UCC-1 Financing Statements
("UCC-1") filed with the Secretary of State of the States of Florida,
California, Delaware and Pennsylvania and listing Lender as the secured party.
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(f) ADDITIONAL MATTERS. All other documents in
connection with the transactions contemplated hereby reasonably requested by
Lender.
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 Lender Note, whether for principal, interest, expenses or otherwise, the
Company hereby grants, transfers and assigns and pledges to Lender all of its
respective right, title and interest in and grants Lender a senior security
interest in the Company's assets as set forth in Schedule 3.1 attached hereto
(the "PLEDGED ASSETS").
3.2 DEFAULT. If the Company defaults in the payment of the
principal or interest under the Lender Note when it becomes due (whether upon
acceleration or otherwise) or any other event of default under the Lender Note
or this Agreement occurs (including the bankruptcy or insolvency of the
Company), Lender 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
Lender under applicable law. Without limiting the foregoing, Lender 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 Lender 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, Lender 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 Lender Note; provided that after payment in full of the
indebtedness evidenced by the Lender 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 Lender. The
Company shall be liable for any deficiency if the remaining proceeds are
insufficient to pay the indebtedness under the Lender Note in full, including
the fees of any attorneys employed by Lender to collect such deficiency.
3.3 COSTS AND ATTORNEYS' FEES. All costs and expenses
(including court costs and 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.
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3.4 PAYMENT OF INDEBTEDNESS AND RELEASE OF PLEDGED ASSETS.
Upon payment in full of the indebtedness evidenced by the Lender Note, Lender
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 (other than liens and security interests in favor of Participating
Creditors as defined in the Intercreditor Agreement dated as of December 6,
2000, by and among Interprise Technology Partners LP, Drax Holdings, LP, Viscaya
Investments, Inc., DC Investment Partners Exchange Fund, L.P., Xxxx Xxxxxxx and
Xxxxxx and Xxxx Xxxxx and the Company), and the Company hereby covenants that,
until such time as all of the outstanding principal of and interest on the
Lender 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 under substantially similar terms as
those set forth in this agreement, or (ii) sell or otherwise transfer any
Pledged Assets or any interest therein, other than in the ordinary course of the
Company's business.
3.6 FURTHER ASSURANCES. The Company agrees that at any time
and from time to time upon the written request of Lender the Company shall
execute and deliver such further documents (including UCC financing statements)
and do such further acts and things as Lender may reasonably request in order to
effect the purposes of this Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES. In addition to the
representations and warranties contained in Section 3.5 above, in order to
induce Lender to enter into this Agreement, the Company represents and warrants
to Lender that:
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 Lender Note and the Lender
Warrant, and (c) to issue the Lender Warrant and Warrant Stock (as defined in
the Lender Warrant).
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4.2. DUE AUTHORIZATION; NON-CONTRAVENTION. The execution and
delivery by the Company of this Agreement, the Lender Note, the Lender 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 Lender Note and the Lender
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 Lender Warrant in
accordance with its terms as contemplated therein, the Warrant Shares (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 Shares 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
Shares 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 Lender Note have been acquired.
Compliance with the terms of this Agreement and the Lender 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 Lender 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 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 Preferred Stock, par value $.001 per share,
and 91,802 are designated as
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Series C Preferred Stock, par value $.001 per share. The Company has 16,283,647
shares of Common Stock, 4,250,000 shares of Series A Convertible Preferred
Stock, 5,000,000 shares of Series B Preferred Stock and 91,802 shares of Series
C Preferred Stock issued and outstanding. Except as set forth in Schedule 4.7
attached hereto, the Company does not have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock or containing
any profit participation features, nor does it have outstanding any rights or
options to subscribe for or to purchase its capital stock or any stock or
securities convertible into or exchangeable for its capital stock or any stock
appreciation rights or phantom stock plans. The Company is not be 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. Except at set forth in Schedule 4.8 attached
hereto, 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 Lender Note.
SECTION 5. COVENANTS
In addition to the covenants contained in Section 3.5 above, the
Company covenants and agrees that, from the date hereof until the Maturity Date
and for so long as the Loan remains outstanding and unpaid, in whole or in part,
or any other amount is owing to Lender under this Agreement, unless Lender shall
otherwise consent in writing, the Company will promptly give notice to Lender 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:
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(a) NONPAYMENT. The Company shall fail to make, on
or before 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 ten (10)
business days after such default.
(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) there 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 Lender the amount of the Loan 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, Lender may proceed to
protect and enforce his rights as holder of the Lender 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 Lender Note, and such further amounts as shall be
sufficient to cover the costs and expenses of collection (including, without
limitation, court costs and reasonable counsel fees and disbursements), or to
enforce any other legal or equitable right of the holder of the Lender Note. In
addition, Lender 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
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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 CUMULATIVE. No remedy conferred in this
Agreement or the Lender Note upon Lender 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.
(c) REMEDIES NOT WAIVED. No course of dealing
between the Company and Lender and no delay or failure in exercising any rights
hereunder or under the Lender Note in respect thereof, shall operate as a waiver
of any of the rights of Lender
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 Lender:
Interprise Technology Partners, L.P.
0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx
Xxxxx, XX 00000
Attention: X.X. Xxxxxxxxx
Fax: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: X. Xxxxx Xxxx
Fax: (000) 000-0000
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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 Xxxxxxx, P.A.
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxx
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.
7.2. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or the Lender 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. The Company shall reimburse Lender
for its reasonable fees and expenses (including its reasonable fees and expenses
of its counsel and other advisors) which Lender has incurred in connection with
the transaction. In addition, the Company agrees to pay, and hold Lender
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
Articles of Incorporation and the Company's Bylaws, and the consummation of the
transactions contemplated hereby and thereby (including, but not limited to,
court costs and 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
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incurred by Lender 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, the filing of the UCC-1 or the issuance, delivery, or
acquisition of any shares of Stock upon exercise of the Lender Warrant.
7.4. INDEMNIFICATION. The Company will indemnify and hold
harmless Lender 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 Lender Note, the
Lender 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 Lender 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 Lender
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.
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 Lender 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 Lender.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of the undersigned has caused this
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/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
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Title: Chief Financial Officer
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Interprise Technology Partners, L.P.
By: /S/ XX XXXXXXXXX
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Name: Xxxx Xxxxxx Xxxxxxxxx
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Title: Principal
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SCHEDULE 3.1
PLEDGED ASSETS
(i) All accounts receivable, accounts, chattel paper, contracts, contract
rights (including, without limitation, royalty agreements, license
agreements and distribution agreements), documents, instruments, money,
cash or cash equivalents, deposit accounts and general intangibles,
including, without limitation, returns, repossessions, books and records
relating thereto, equipment containing said books and records, computer
hardware, furniture, and all investment property including securities
and securities entitlements;
(ii) All goods including, without limitation, equipment and inventory
(including, without limitation, all export inventory);
(iii) All guarantees and other security therefor;
(iv) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or
not the same also constitutes a trade secret, now or hereafter existing,
created, acquired or held (collectively, the "Copyrights");
(v) Any and all trade secrets, and any and all intellectual property rights
in computer software and computer software products now or hereafter
existing, created, acquired or held;
(vi) Any and all design rights which may be available to Debtor now or
hereafter existing, created, acquired or held;
(vii) Any and all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same
(collectively, the "Patents");
(viii) Any and all trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Debtor connected
with and symbolized by such trademarks (collectively, the "Trademarks");
(ix) Any and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but
not the obligation, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
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(x) All licenses or other rights to use any of the Copyrights, Patents or
Trademarks, and all license fees and royalties arising from such use to
the extent permitted by such license or rights;
(xi) All amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents; and
(xii) All proceeds and products of any kind of or from any of the foregoing,
including without limitation all payments under insurance or any
indemnity or warranty payable in respect of any of the foregoing.
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SCHEDULE OF LOAN AND PLEDGE AGREEMENTS
The following schedule of details of various loan and pledge agreements
is provided in accordance with Instruction 2 to Item 601 of Regulation S-K. A
total of eight (8) separate loans have been made pursuant to loan and pledge
agreements substantially identical in all material respects to this warrant
dated January 30, 2001, except with respect to the details provided in the table
below, by Interprise Technology Partners, L.P. ("ITP") to World Commerce Online,
Inc. (the "Issuer").
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DATE OF LOAN MATURITY DATE LOAN AMOUNT
------------ ------------- -----------
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August 14, 2000 (1) April 12, 2001 $5,000,000
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October 2, 2000 April 12, 2001 $1,000,000
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November 9, 2000 April 12, 2001 $500,000
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December 5, 2000 April 12, 2001 $500,000
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December 20, 2000 April 12, 2001 $500,000
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December 28, 2000 April 12, 2001 $2,750,000
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January 3, 2001 Payable On Demand $450,000
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February 15, 2001 (2) Payable On Demand $400,000
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(1) The loan and pledge agreement, dated August 14, 2000, by and between the
Issuer and ITP filed as an exhibit to the Issuer's Form 8-K filed on
August 22, 2000 has been amended.
(2) This loan and pledge agreement is not yet executed, but both the Issuer
and ITP have agreed on the terms of the loan and anticipate that the
agreement will be executed on or about February 26, 2001.
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