ASSET PURCHASE AGREEMENT
by and between
VDC CORPORATION LTD.,
as Seller,
and
ROZEL INTERNATIONAL HOLDINGS LIMITED
as Buyer
December 18, 1997
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is made as of
the 18th day of December, 1997, by and between VDC CORPORATION LTD., a Bermuda
corporation ("Seller") and ROZEL INTERNATIONAL HOLDINGS LIMITED, a British
Virgin Island corporation ("Buyer").
WITNESSETH
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the
terms and conditions hereafter set forth, certain of the assets of Seller as
described herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
agreements and representations and warranties herein contained, and for other
good and legal consideration, the receipt and sufficiency of which is hereby
acknowledged, Seller and Buyer, intending to be legally bound hereby, agree as
follows:
ARTICLE 1
DEFINITIONS
1.1. When used in this Agreement, the following terms, in their singular
and plural forms, shall have the meanings assigned to them below:
"Act" means the Securities Act of 1933, as amended.
"Agreement" is defined in the initial paragraph hereof.
"Assets" means all of the right, title and interest that Seller
possesses and has the right to transfer in and to all of the following described
holdings:
(i) 3,972,877 shares of common stock, par value $.01 per share
("NV Common Stock"), of netValue ("NetValue");
(ii) 100,000 shares of common stock, par value $.01 per share
("Informatix Common Stock"), of Informatix, Inc. ("Informatix");
(iii) $700,000 Note, dated October 18, 1997 (the "Note") owed by
Informatix to Seller; and
(iv) Promissory Notes in the aggregate principal amount of
$200,000 ("NetValue Notes") owed by NetValue to Seller.
"Buyer" is defined in the initial paragraph hereof.
"Claim" means a claim or demand for any and all Liabilities, damages,
losses, obligations, deficiencies, encumbrances, penalties, costs and expenses,
including reasonable attorneys' fees, resulting from, related to or arising out
of (i) any misrepresentation, breach of
2
warranty or non-fulfillment of any obligation of Seller set forth in this
Agreement or in any Related Document; (ii) Seller's ownership of the Assets;
(iii) Seller's failure to comply with the provisions of applicable bulk sales
laws; and (iv) any and all actions, suits, investigations, proceedings, demands,
assessments, audits, judgments and claims arising out of any of the foregoing.
"Closing" and "Closing Date" are defined in Section 6.1.
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means any foreign, federal, state, regional
or local authority, agency, body, court or instrumentality, regulatory or
otherwise, which, in whole or in part, was formed by or operates under the
auspices of any foreign, federal, state, regional or local government.
"Law" means any common law and any federal, state, regional, local or
foreign law, rule, statute, ordinance, rule, order or regulation.
"Liabilities" means liabilities, obligations, claims or debts of
Seller of any type or nature, whether matured, unmatured, contingent or unknown,
including, without limitation, tort, contract or other claims asserted against
Seller which are based on acts or omissions occurring on, before or after the
Closing Date.
"Lien" means any lien, charge, covenant, condition, easement, adverse
claim, demand, encumbrance, security interest, option, pledge, or any other
title defect, easement or restriction of any kind.
"Material Adverse Effect" is defined in Section 4.9(c).
"Permitted Liens" means those Liens to which the Assets are subject
under (i) the federal securities laws of the United States.
"Purchase Price" is defined in Section 3.1.
"Related Documents" means this Agreement and each document or
instrument executed in connection with the consummation of the transactions
contemplated herein.
"Seller" is defined in the initial paragraph of this Agreement.
ARTICLE 2
SALE AND PURCHASE OF ASSETS
2.1. Agreement to Sell and Purchase Assets. Subject to the terms and
conditions hereof and on the basis of and in reliance upon the agreements and
representations and warranties set forth herein, on the Closing Date Seller
shall sell the Assets to Buyer, and Buyer shall purchase the Assets from Seller.
3
2.2. Responsibility for Liabilities. Buyer shall not assume any Liabilities
of Seller by virtue of this Agreement or otherwise.
ARTICLE 3
PAYMENT OF THE PURCHASE PRICE
3.1. Purchase Price.
The purchase price ("Purchase Price") for the Assets shall be
$4,000,000 in cash, or other immediately available funds, which shall paid or
delivered by Buyer in the following manner:
(a) At the Closing, Buyer shall deliver to Seller an amount equal to
Five Hundred Thousand Dollars ($500,000) ("Cash Funds") in
immediately available funds in the form of cash, cashier's check
or wire transfer; and
(b) At the Closing, Buyer shall deliver a Promissory Note payable to
Seller in the aggregate amount of $3,500,000, the form of which
is attached hereto as Exhibit A, ("Promissory Note"); whereby
$300,000 shall be due and payable on June 1, 1998; $1,200,000
shall be due and payable on February 1, 1999; $1,000,000 shall be
due and payable on May 1, 1999 and the remaining $1,000,000 shall
be due and payable on August 1, 1999.
3.2. Adjustment to Purchase Price Sums previously advanced to Seller by
Buyer in the aggregate amount of $500,000, shall constitute initial payments
against the Purchase Price, and shall be applied to the Cash Funds due at the
Closing.
3.3. Pledge of Assets to secure Promissory Note At Closing, the Assets
shall be pledged to Seller, pursuant to the terms of a Pledge Agreement,
attached hereto as Exhibit B, and a Security Agreement, attached hereto as
Exhibit C, to secure the payment of the Promissory Note and the obligations
thereunder.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
4.1. Organization and Standing of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of Bermuda.
Seller has all requisite corporate power and authority to sell the Assets, free
and clear of any and all Liens other than Permitted Liens.
4.2. Encumbrances Created by this Agreement. The execution and delivery of
this Agreement and each of the Related Documents does not, and the consummation
of the transactions contemplated hereby or thereby will not, create any Liens on
any assets (including the Assets) of Seller in favor of third parties.
4
4.3. Authorization and Enforceability. The Seller has the full and
unrestricted legal right, power and authority to enter into this Agreement and
the Related Documents to which it is a party, to carry out the transactions
contemplated hereby and thereby, and to perform the obligations hereunder and
thereunder. All necessary and appropriate action has been taken by Seller with
respect to the execution and delivery of this Agreement and each of the Related
Documents and the performance of its obligations hereunder and thereunder. No
authorization, consent or approval of, or filing with, any third party or
Governmental Authority is necessary for the consummation by Seller of the
transactions contemplated by this Agreement or any Related Document. The
execution and delivery of this Agreement and the Related Documents and the
consummation of the contemplated transactions by Seller will not (a) result in
the breach of any of the terms or conditions of or constitute a default under
the Memorandum of Association or the Bye-Laws of the Seller, (b) violate any Law
or any order, writ, injunction or decree of any Governmental Authority, (c)
conflict with or constitute a default under any agreement or commitment that is
binding upon Seller or (d) result in the acceleration of any indebtedness of
Seller. This Agreement constitutes a valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms.
4.4. Title to Assets. Seller owns and holds of record the entire right,
title and interest in and to all of the Assets, free and clear of any and all
Liens, other than Permitted Liens.
4.5. Litigation. There is no claim, suit, arbitration, investigation,
action, inquiry, review or proceeding pending or threatened against Seller which
(a) affects the validity of this Agreement or any of the Related Documents or
which could prevent or delay the transactions contemplated hereunder or (b)
could reasonably be expected to have a Material Adverse Effect. Seller is not
subject to any judicial injunction or mandate or any administrative order.
4.6. Approval. The Board of Directors of Seller has approved the execution
of this Agreement and the transactions contemplated thereby.
4.7. Brokers' Fees. No broker, finder or other person or entity acting in a
similar capacity has participated on behalf of Seller in connection with the
transactions contemplated by this Agreement. Seller has not incurred any
Liability for brokers' fees, finders' fees, agents' commissions or other similar
forms of compensation in connection with this Agreement or the transactions
contemplated hereby.
4.8. Full Disclosure. No representation or warranty by Seller in this
Agreement and no statement contained in any Disclosure Schedule to this
Agreement contains any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements contained therein, in light of
the circumstances in which they are made, not misleading.
5
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1. Organization and Standing of Buyer. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the British
Virgin Islands.
5.2. Authorization and Enforceability. Buyer has all requisite corporate
power and authority to enter into this Agreement and the Related Documents to
which it is a party and to carry out the transactions contemplated hereby and
thereby and to perform its obligations hereunder and thereunder. All necessary
and appropriate action has been taken by Buyer with respect to the execution and
delivery of this Agreement and each of the Related Documents and the performance
of its obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Related Documents and the consummation of the contemplated
transactions by Buyer will not (a) result in the breach of any of the terms or
conditions of, or constitute a default under, the Buyer or (b) violate any Law
or any order, writ, injunction or decree of any Governmental Authority. This
Agreement and any Related Documents to which Buyer is a party constitute valid
and binding obligations of Buyer enforceable against Buyer in accordance with
their respective terms.
5.3. Approval. The Board of Directors of the Buyer has approved the
execution of this Agreement and the transactions contemplated thereby.
5.4. Brokers' Fees. Buyer has not incurred any liability for brokers' fees,
finders' fees, agents' commissions or other similar forms of compensation in
connection with this Agreement or the transactions contemplated hereby.
5.5. Full Disclosure. No representation or warranty by Buyer in this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained therein, in light of
the circumstances in which they are made, not misleading.
ARTICLE 6
CLOSING
6.1. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place upon the execution of this Agreement
by all parties thereto and upon satisfaction of the obligations of Seller and
Buyer below (the "Closing Date").
6.2. Obligations of Seller. At or prior to the Closing, Seller shall
deliver to Buyer, in each case, in form and substance satisfactory to Buyer:
(a) Certificates representing the NV Common Stock duly endorsed with
executed stock powers;
6
(b) Certificates representing the Informatix Common Stock duly
endorsed with executed stock powers;
(c) An executed Assignment of the Note and NetValue Notes, attached
hereto as Exhibits D and E, respectively;
(d) An executed Pledge Agreement, attached hereto as Exhibit B;
(e) An executed Security Agreement, attached hereto as Exhibit C;
(f) Such other instruments of transfer as shall be necessary or
appropriate to vest in the Buyer good and marketable title to the
Assets.
6.3. Obligations of Buyer. At the Closing, Buyer shall deliver:
(a) The Cash Funds in accordance with Article 3 of this Agreement;
(b) The Promissory Note in accordance with Article 3 of this
Agreement;
(c) An executed Pledge Agreement, attached hereto as Exhibit B; and
(d) An executed Security Agreement, attached hereto as Exhibit C.
6.4. Further Documents or Necessary Action. Buyer and Seller each agree to
take all such further actions on or after the Closing Date as may be necessary,
desirable or appropriate in order to confirm or effectuate the transactions
contemplated by this Agreement.
ARTICLE 7
INDEMNIFICATION AND RELATED MATTERS
7.1. Survival of Representations and Warranties. The representations and
warranties contained in this Agreement, the schedules and exhibits hereto, and
any agreement, document, instrument or certificate delivered hereunder,
including the Related Documents, shall survive the Closing Date. This Article 7
constitutes the sole and exclusive remedy of Buyer and Seller with respect to
any subject matter addressed herein, and Buyer and Seller hereby waive and
release the other from any and all claims and other causes of action, including
without limitation claims for contribution, relating to any such subject matter.
7.2. Indemnification by Seller.
(a) Seller agrees to indemnify Buyer against and hold it harmless
from:
(i) all liability, loss, damage or deficiency resulting from
or arising out of any inaccuracy in or breach of any
representation or warranty by Seller in this Agreement, in any
Related Document to which Seller was a signatory or in any other
agreement or document delivered by or on behalf of Seller in
connection with the transactions contemplated by this Agreement;
7
(ii) all liability of Seller not expressly assumed by Buyer;
(iii) all liability, loss, damage or deficiency resulting
from or arising out of any breach or nonperformance of any
obligation made or incurred by Seller in this Agreement, in any
Related Document to which Seller was a signatory or in any other
agreement or document delivered by or on behalf of Seller in
connection with the transactions contemplated by this Agreement;
and
(iv) any and all reasonable costs and expenses (including
reasonable legal and accounting fees) related to any of the
foregoing. In the event that Buyer makes a Claim which is
determined by a court of competent jurisdiction to be without
reasonable basis in law or fact, Buyer shall bear all reasonable
costs and expenses (including court costs and reasonable legal
and accounting fees), incurred by Seller in investigating and
defending against such Claim.
7.3. Indemnification by Buyer. Buyer shall indemnify Seller against and
hold it harmless from:
(a) all liability, loss, damage or deficiency resulting from or
arising out of any inaccuracy in or breach of any representation or
warranty by Buyer in this Agreement in any Related Document or in any other
agreement or document delivered by or on behalf of Buyer in connection with
the transactions contemplated by this Agreement;
(b) all liability, loss, damage or deficiency resulting from or
arising out of any breach or nonperformance of any obligation made or
incurred by Buyer in this Agreement, in any Related Document, or in any
other agreement or document delivered by or on behalf of Buyer in
connection with the transactions contemplated by this Agreement; and
7.4. any and all reasonable costs and expenses (including reasonable legal
and accounting fees) related to any of the foregoing. In the event that Seller
makes a Claim which is determined by a court of competent jurisdiction to be
without reasonable basis in law or fact, Seller shall bear all reasonable costs
and expenses (including court costs and reasonable legal and accounting fees),
incurred by Buyer in investigating and defending against such Claim.
ARTICLE 8
GENERAL
8.1. Entire Agreement. This Agreement, and the exhibits and schedules
hereto (including the Disclosure Schedule), and the agreements specifically
referred to herein set forth the entire agreement and understanding of Seller
and Buyer in respect of the transactions contemplated hereby and supersede all
prior agreements, arrangements and understandings relating to the subject matter
hereof. No representation, promise, inducement or statement of intention has
been made by Seller or Buyer that is not embodied in this Agreement or in the
documents specifically referred to herein and neither Seller nor Buyer shall not
be bound by or
8
liable for any alleged representation, promise, inducement or statement of
intention not so set forth.
8.2. Binding Effect; Benefits; Assignment. All of the terms of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
and against Seller and its successors and authorized assigns, and Buyer and its
successors and authorized assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any other person any rights or remedies
under or by reason of this Agreement except as expressly indicated herein.
Neither Seller nor Buyer shall assign any of their respective rights or
obligations under this Agreement to any other person, firm or corporation
without the prior written consent of the other party, except that Buyer may
assign its rights and obligations under this Agreement to a direct or indirect
wholly-owned subsidiary of Buyer, although Buyer shall remain fully responsible
for all of its obligations under this Agreement.
8.3. Construction. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and shall in no
way restrict or otherwise modify any of the terms or provisions hereof. The
language used in this Agreement shall be deemed to be the language chosen by the
parties to this Agreement to express their mutual intent, and no rule of strict
construction shall be applied against any party.
8.4. Amendment and Waiver. This Agreement may be amended, modified,
superseded or canceled and any of the terms, representations, warranties or
conditions hereof may be waived only by a written instrument executed by Seller
and Buyer or, in the case of a waiver, by or on behalf of the party waiving
compliance.
8.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania as applicable to
contracts made and to be performed in Pennsylvania, without regard to conflict
of laws principles.
8.6. Public Disclosure. Except as required by Law, or in connection with
the solicitation of new investment advisory agreements with Seller's clients,
neither Buyer nor Seller shall make any public disclosure of the existence or
terms of this Agreement or the transactions contemplated hereby without the
prior written consent of the other party, which consent shall not be
unreasonably withheld. In the event that Seller or Buyer determines that the
disclosure of the existence or terms of this Agreement is required by Law, such
party shall so notify the other parties and shall provide to the other party a
copy of any such public disclosure prior to releasing the same.
8.7. Notices. All notices, requests, demands and other communications to be
given pursuant to the terms of this Agreement shall be in writing and shall be
deemed to have been duly given if hand delivered, sent by overnight mail by a
nationally recognized overnight delivery service or mailed first class, postage
prepaid:
(a) If to Seller:
Xxxxxx Xxxxx, President
VDC Corporation Ltd.
X.X. Xxx XX 0000
00 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
Telephone: 00000 000000
Telecopier: 01624 878765
9
(b) If to Buyer:
Xxxxxx Xxxxxx, President
Rozel International Holdings Limited
x/x Xxxxxxxxx Xxxxx
Xxxxx Xxxx - Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxx
Telephone: 00000 000000
Telecopier: 01614 871508
Either party may change its address by prior written notice to the other party.
8.8. Counterparts. This Agreement may be executed in counterparts, each of
which when so executed shall be deemed to be an original and such counterparts
shall together constitute one and the same instrument.
8.9. Expenses. Each party shall pay their own respective expenses, costs
and fees incurred in connection with the negotiation, preparation, execution and
delivery of this Agreement and each of the Related Documents and the
consummation of the transactions contemplated hereby, including, without
limitation, the fees and expenses of their respective legal counsel, accountants
and financial advisors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
VDC CORPORATION LTD.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
President
ROZEL INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
President
10
PROMISSORY NOTE
$ 3,500,000.00 December 18, 1997
FOR VALUE RECEIVED, ROZEL INTERNATIONAL HOLDINGS LIMITED., a British
Virgin Island Corporation (the "Maker"), promises to pay to the order of VDC
CORPORATION LTD., a Bermuda corporation (the "Payee") the amount of Three
Million Five Hundred Thousand Dollars ($3,500,000.00) in accordance with the
terms hereof.
The Maker shall pay interest on any unpaid principal balance hereof from
time to time as may be outstanding from the date hereof which shall accrue at
the rate of eight percent (8%) per annum (the "Interest Rate"). Any amounts
outstanding under this Note, together with all interest accrued thereon and any
penalties due hereunder, shall be payable in lawful money of the United States
at Payee's principal offices at 00 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx or at such
other place or places as Payee shall designate, as follows:
(i) Three Hundred Thousand Dollars ($300,000) shall be payable on June
1, 1998;
(ii) One Million Two Hundred Thousand Dollars ($1,200,000) shall be
payable on February 1, 1999;
(iii) One Million Dollars ($1,000,000) shall be payable on May 1, 1999;
and
(iv) One Million Dollars ($1,000,000) shall be payable on August 1,
1999.
Maker is obligated to make the payments on the above specified due dates
in accordance with the terms of this Note without defalcation or setoff and
without notice or demand, and the failure to receive any notice or demand from
Payee shall not be a defense to, or excuse for, the failure to make such payment
on the due date. Payment under this Note and performance of the terms hereunder
shall be secured, pursuant to a Security Agreement between Maker and Payee,
dated of even date herewith, by those assets subject to the Asset Purchase
Agreement between Maker and Payee, which assets shall be pledged to Payee
pursuant to a Pledge Agreement, dated of even date herewith, to secure the
Maker's obligations under this Note.
Maker shall be in default hereunder upon the occurrence of any of the
following events (an "Event of Default"): (i) the failure to make payment when
due; (ii) the failure of Maker to observe or perform or cause to be observed or
performed any agreement, condition or obligation on Maker's part to be performed
hereunder; (iii) the institution by or against Maker of any bankruptcy,
insolvency, arrangement, debt adjustment or receivership, proceeding which, if
an involuntary bankruptcy petition, remains undismissed for thirty (30) days
after the filing thereof; (iv) the adjudication of Maker as a bankrupt or the
appointment of a trustee or receiver for all or any part of Maker's property;
(v) the making by Maker of an assignment for the benefit of
creditors; (vi) the admission, in writing, by Maker of an inability to pay its
debts as they become due.
Upon the occurrence of any Event of Default, the entire amount
outstanding under this Note shall, at the option of Payee, become immediately
due and payable without presentment, demand or further action of any kind, and
one or more executions may forthwith issue on any judgment or judgments obtained
by virtue of any provision of this Note or otherwise obtained.
The rights and remedies provided herein shall be cumulative and
concurrent and shall not be exclusive of any right or remedy provided by law, in
equity or otherwise. Said rights and remedies may, at the sole discretion of
Payee, be pursued singly, successively or together as often as occasion therefor
shall arise, against Maker. No failure on the part of Payee to exercise any of
such rights or remedies shall be deemed a waiver of any such rights or remedies
or of any Event of Default hereunder.
Upon the occurrence of a default or an Event of Default, Payee shall
have the right, but not the duty, to cure such default or Event of Default, in
part or in its entirety, and all amounts expended or debts incurred by Payee,
including reasonable attorneys' fees, shall be deemed to be advances to Maker,
shall be added to the amount due under this Note, shall be secured by the
security for this Note, if any, and shall be payable by Maker to Payee upon
demand.
THE FOLLOWING SECTION SETS FORTH WARRANTS OF ATTORNEY FOR ANY ATTORNEY
TO CONFESS JUDGMENTS AGAINST MAKER. IN GRANTING THESE WARRANTS OF ATTORNEY TO
CONFESS JUDGMENTS AGAINST MAKER, MAKER HEREBY KNOWINGLY, INTENTIONALLY,
VOLUNTARILY, AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS MAKER MAY HAVE TO
PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS
AND LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND THE UNITED STATES OF AMERICA.
WITHOUT LIMITATION OF THE FOREGOING, MAKER HEREBY SPECIFICALLY WAIVES ALL RIGHTS
MAKER HAS OR MAY HAVE TO NOTICE AND AN OPPORTUNITY FOR A HEARING PRIOR TO
EXECUTION UPON ANY JUDGMENT ENTERED AGAINST MAKER PURSUANT TO THE TERMS HEREOF.
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, MAKER DOES HEREBY
IRREVOCABLY AUTHORIZE AND EMPOWER ANY ATTORNEY OR THE PROTHONOTARY OF ANY COURT
OF RECORD OF BERMUDA OR ELSEWHERE TO APPEAR FOR MAKER IN ANY SUCH COURT, AND
WITH OR WITHOUT A COMPLAINT OR DECLARATION FILED, IN AN APPROPRIATE ACTION
BROUGHT AGAINST MAKER ON THIS NOTE, TO ENTER AND CONFESS JUDGMENT AGAINST MAKER
IN FAVOR OF PAYEE OR ITS SUCCESSORS AND ASSIGNS, FOR THE ENTIRE AMOUNT DUE TO
PAYEE UPON SUCH EVENT OF DEFAULT AS PROVIDED HEREIN, TOGETHER WITH COSTS OF SUIT
AND
2
REASONABLE ATTORNEYS' FEES NOT TO EXCEED ONE THOUSAND DOLLARS ($1,000.00);
AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE A
SUFFICIENT WARRANT. THE AUTHORITY HEREIN GRANTED TO APPEAR, ENTER AND CONFESS
JUDGMENT SHALL NOT BE EXHAUSTED BY ANY ONE OR MORE EXERCISE THEREOF OR BY ANY
DEFECTIVE EXERCISE THEREOF, BUT SHALL CONTINUE AND BE EXERCISABLE FROM TIME TO
TIME UNTIL THE FULL PAYMENT OF ALL AMOUNTS DUE FROM MAKER TO PAYEE HEREUNDER IS
MADE.
MAKER ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF LEGAL COUNSEL IN
THE REVIEW AND EXECUTION OF THIS NOTE AND FURTHER ACKNOWLEDGES THAT THE MEANING
AND EFFECT OF THE FOREGOING PROVISIONS CONCERNING CONFESSION OF JUDGMENT HAVE
BEEN FULLY EXPLAINED TO MAKER BY SUCH COUNSEL, OR, IN THE ALTERNATIVE, MAKER
HEREBY WAIVES THE ASSISTANCE OF LEGAL COUNSEL IN THE REVIEW AND EXECUTION OF
THIS NOTE, AND AS EVIDENCE OF SUCH FACT, AS THE CASE MAY BE, SIGNS HIS/HER
INITIALS.
------------------- -------------------
(initials of Maker) (initials of Maker)
Maker hereby waives the benefit of any laws now or hereafter enacted
providing for any stay of execution, marshalling of assets, exemption from civil
process, redemption, extension of time for payment, or valuation or appraisement
of all or any part of any security for this Note, exempting all or any part of
any other security for this Note or any other property of Maker from attachment,
levy or sale upon any such execution or conflicting with any provision of this
Note. Maker waives and releases Payee and said attorney or attorneys from all
errors, defects and imperfections whatsoever in confessing any such judgment or
in any proceedings relating thereto or instituted by Payee hereunder. Maker
hereby agrees that any property that may be levied upon pursuant to a judgment
obtained under this Note may be sold upon any execution thereon in whole or in
part, and in any manner and order that Payee, in its sole discretion may elect.
The Maker and all other endorsers, sureties and guarantors hereby
jointly and severally waive presentment and demand for payment, notice of
demand, notice of default, notice of dishonor, protest and notice of protest of
this Note, and all other notices in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this Note, and also waive
notice of the exercise of any options on the part of Payee hereunder.
The granting, with or without notice, of any extension or extensions of
time for payment of any sum or sums due hereunder, or for the performance of any
covenant, provision, condition or agreement contained herein or therein, or the
granting of any other indulgence, or the taking or releasing or subordinating of
any security for the indebtedness evidenced hereby, or any other
3
modification or amendment of this Note will in no way release or discharge the
liability of Maker whether or not granted or done with the knowledge or consent
of Maker.
Payee shall not be deemed, by any act of omission or commission, to have
waived any of its rights or remedies hereunder, at law or in equity, unless such
waiver is in writing and signed by Payee, and then only to the extent
specifically set forth in the writing. A waiver as to one event shall not be
construed as continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
In the event any portion of this Note shall be declared by any court of
competent jurisdiction to be invalid or unenforceable, such portion shall be
deemed severable from this Note, and the remaining parts hereof shall remain in
full force and effect, as fully as though such invalid or unenforceable portion
was never part of this Note.
The obligations of Maker hereunder shall be binding on the heirs,
representatives, successors and assigns of Maker and the benefits of this Note
shall inure to Payee, and its heirs, representatives, successors and assigns and
to any holder of this Note.
The outstanding balance due under this Note may be prepaid, in the
aggregate during the term of this Note, in whole or in part, without penalty or
premium. No partial prepayment shall postpone or interrupt payments of the
remaining balance, all of which shall continue to be due and payable at the time
and in the manner set forth above.
All notices and other communications required or given under this Note
shall be in writing and shall be sent by U.S. certified mail, return receipt
requested, or by a nationally recognized overnight courier service, addressed to
Payee or to Maker at their respective addresses as set forth in the Asset
Purchase Agreement between Maker and Payee.
This Note, and all issues arising hereunder, shall be governed by and
construed according to the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has
caused this Promissory Note to be duly executed as of the 18th day of December,
1997.
ROZEL INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx, President
4
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Agreement"), dated December 18, 1997, is
made and entered into by and between ROZEL INTERNATIONAL HOLDINGS LIMITED, a
British Virgin Island corporation (the "Debtor") and VDC CORPORATION LTD., (the
"Secured Party") under that certain Asset Purchase Agreement dated December 18,
1997 (as it may hereafter from time to time be restated, amended, modified or
supplemented, the "Purchase Agreement") by and between the Debtor and the
Secured Party.
WHEREAS, pursuant to the Purchase Agreement, the Secured Party
agreed to sell certain of its assets to Debtor which purchase price included a
Promissory Note in the aggregate amount of $3,500,000; and
WHEREAS, as security for payment under the Promissory Note, and as
required by the Purchase Agreement, the Assets (as such term is defined in the
Purchase Agreement) shall be pledged to the Secured Party in accordance
herewith.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. Defined Terms.
(a) Except as otherwise expressly provided herein, capitalized
terms used in this Agreement shall have the respective meanings assigned to them
in the Purchase Agreement. Where applicable and except as otherwise expressly
provided herein, terms used herein (whether or not capitalized) shall have the
respective meanings assigned to them in the Uniform Commercial Code as enacted
in each applicable jurisdiction and as may be amended from time to time (the
"Code").
(b) "Pledged Collateral" shall mean and include the following: (i)
the property listed on Schedule A attached hereto and made a part hereof, and
all rights and privileges pertaining thereto, including, without limitation, all
securities and additional securities receivable in respect of or in exchange for
such securities, all rights to subscribe for securities incident to or arising
from ownership of such securities, all cash, interest, stock and other dividends
or distributions paid or payable on such securities, and all books and records
pertaining to the foregoing, including, without limitation, all stock record and
transfer books, (ii) any and all other securities hereafter pledged to the
Secured Party to secure the Secured Obligations (as hereinafter defined) of
Debtor, and all rights and privileges pertaining thereto, including, without
limitation, all securities and additional securities receivable in respect of or
in exchange for such securities, all rights to subscribe for securities incident
to or arising from ownership of such securities, all cash, interest, stock and
other dividends or distributions paid or payable on such securities, and all
books and records pertaining to the foregoing, including, without limitation,
all stock record and stock transfer books and (iii) whatever is received when
any of the foregoing is sold, exchanged or otherwise disposed of, including any
proceeds as such term is
1
defined in the Code.
2. Grant of Security Interests.
(a) Debtor, to secure on a first priority basis, the payment and
performance of all of its indebtedness and other obligations of every nature it
owes under the Purchase Agreement, the Promissory Note and all of the Other
Documents (the "Secured Obligations"), hereby grants to the Secured Party a
security interest in all of Debtor's now existing and hereafter acquired and/or
arising right, title and interest in, to and under the Pledged Collateral,
whether now or hereafter existing and wherever located.
(b) Upon the execution and delivery of this Agreement, Debtor has
delivered to and deposited with the Secured Party in pledge, stock certificates
and any other instruments evidencing the Pledged Collateral, together with
undated stock powers signed in blank by Debtor.
3. Further Assurances.
Prior to or concurrently with the execution of this Agreement, and
thereafter at any time and from time to time upon reasonable request of the
Secured Party, Debtor shall execute and deliver to the Secured Party all
financing statements, continuation financing statements, termination statements,
assignments, certificates and documents of title, affidavits, reports, notices,
schedules of account, letters of authority, further pledges, powers of attorney
and all other documents (collectively, the "Security Documents") which the
Secured Party may reasonably request, in form reasonably satisfactory to the
Secured Party, and take such other action which the Secured Party may request,
to perfect and continue perfected and to create and maintain the first priority
status of the Secured Party's security interest in (subject only to Permitted
Liens) the Pledged Collateral and to fully consummate the transactions
contemplated under the Purchase Agreement, the Promissory Note and this
Agreement. Debtor hereby irrevocably makes, constitutes and appoints the Secured
Party (and any of the Secured Party's officers or employees or agents designated
by the Secured Party) as Debtor's true and lawful attorney with power to sign
the name of Debtor on all or any of the Security Documents which the Secured
Party reasonably determines must be executed, filed, recorded or sent in order
to perfect or continue perfected the Secured Party's security interest in the
Pledged Collateral in the event Debtor fails to so execute such documents upon
Secured Party's request. Such power, being coupled with an interest, is
irrevocable until all of the Secured Obligations have been indefeasibly paid in
full and have terminated.
4. Representations and Warranties.
In addition to the representations and warranties of Debtor set forth
in the Purchase Agreement which are incorporated herein by reference, Debtor
hereby represents and warrants to the Secured Party as follows:
2
(a) Debtor has, and will continue to have (or, in the case of
after-acquired Pledged Collateral, at the time Debtor acquires rights in such
Pledged Collateral, will have), title to the Pledged Collateral, free and clear
of all Liens.
(b) The shares of common stock of NetValue and Informatix,
constituting, in part, the Pledged Collateral have been duly authorized and
validly issued to Debtor, and constitute all of the shares of common stock of
NetValue and Informatix owned by Debtor.
(c) The security interests in the Pledged Collateral granted
hereunder are valid, perfected and of first priority.
(d) There are no restrictions upon the transfer of the Pledged
Collateral and Debtor has the power and authority and right to transfer the
Pledged Collateral free of any encumbrances and without obtaining the consent of
any other person. It is acknowledged that a transfer of the Pledged Collateral
by Secured Party following a foreclosure may require compliance with federal and
state securities laws.
(e) Debtor has all necessary power to execute, deliver and perform
this Agreement and all necessary action to authorize the execution, delivery and
performance of this Agreement has been properly taken.
(f) There are no actions, suits, or proceedings pending or, to
Debtor's best knowledge after due inquiry, threatened against or affecting
Debtor with respect to the Pledged Collateral, at law or in equity or before or
by any commission, board, bureau, agency, department or instrumentality, and
Debtor is not in default with respect to any judgment, writ, injunction, decree,
rule or regulation which would adversely affect Debtor's performance hereunder.
(g) This Agreement has been duly executed and delivered and
constitutes the valid and legally binding obligation of Debtor, enforceable in
accordance with its terms, except to the extent that enforceability of this
Agreement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforceability of creditors'
rights generally or limiting the right of specific performance or by general
equitable principles.
(h) Neither the execution and delivery by Debtor of this Agreement,
nor the compliance with the terms and provisions hereof, will violate any
provision of the articles or certificates of incorporation or similar
organizational documents, bylaws or partnership agreement of Debtor or any law
or conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree or ruling of any court or
arbitration tribunal or any governmental authority to which Debtor is subject or
any provision of any material agreement, understanding or arrangement to which
Debtor is a party or by which Debtor is bound.
3
(i) Debtor's principal place of business and chief executive office
is as set forth on the signature page hereto.
5. General Covenants.
In addition to any covenants and agreements of Debtor set forth in
the Purchase Agreement, the Promissory Note and Other Documents, which are
incorporated herein by this reference, Debtor hereby covenants and agrees as
follows:
(a) Debtor shall do all reasonable acts that may be necessary and
appropriate to maintain, preserve and protect the Pledged Collateral; Debtor
shall be responsible for the risk of loss of, damage to, or destruction of the
Pledged Collateral owned by Debtor, unless such loss is the result of the gross
negligence or willful misconduct of the Secured Party. Debtor shall notify the
Secured Party in writing ten (10) days prior to any change in either the address
and location of Debtor's chief executive office or the address and location of
Debtor's principal place of business.
(b) Debtor shall pay promptly when due all taxes, assessments,
charges and obligations secured by encumbrances and liens now or hereafter
imposed upon or affecting any of the Pledged Collateral, except as otherwise
expressly permitted under the Purchase Agreement.
(c) Debtor shall appear in and defend any action or proceeding of
which Debtor is aware which could reasonably be expected to affect Debtor's
title to, or the Secured Party's interest in, the Pledged Collateral owned by
Debtor and the proceeds thereof; provided, however, that Debtor may settle such
actions or proceedings with respect to the Pledged Collateral Debtor owns with
the consent of the Secured Party, which consent shall not be unreasonably
withheld or delayed.
(d) Debtor shall keep separate, accurate and complete records of
the Pledged Collateral owned by Debtor, disclosing the Secured Party's security
interest hereunder.
(e) Debtor shall permit the Secured Party, its officers, employees
and agents at reasonable times and on reasonable prior notice to inspect all
books and records related to the Pledged Collateral.
(f) During the term of this Agreement, Debtor shall not sell,
assign, transfer, pledge, grant a security interest, place a lien on or
otherwise dispose of the Pledged Collateral except as permitted under the
Purchase Agreement.
4
6. Other Rights With Respect to Pledged Collateral.
In addition to the other rights with respect to the Pledged Collateral
granted to the Secured Party hereunder, at any time and from time to time, after
and during the continuation of an Event of Default, the Secured Party at its
option and at the expense of Debtor, may (a) transfer into its own name, or into
the name of its nominee, all or any part of the Pledged Collateral, thereafter
receiving all dividends, income or other distributions upon the Pledged
Collateral; (b) take control of and manage all or any of the Pledged Collateral;
(c) apply to the payment of any of the Secured Obligations, whether any be due
and payable or not, any moneys, including cash dividends and income from any
Pledged Collateral, now or hereafter in the hands of the Secured Party or any
Affiliate of the Secured Party, on deposit or otherwise, belonging to Debtor, as
the Secured Party, in its sole discretion, shall determine; and (d) do anything
which Debtor is required but fails to do hereunder. The proceeds of any
collection, sale or other disposition of the Pledged Collateral of Debtor, or
any part thereof, shall, after the Secured Party has made all deductions of
expenses, including but not limited to reasonable attorneys' fees and other
expenses incurred in connection with repossession, collection, sale or
disposition of such Pledged Collateral or in connection with the enforcement of
the Secured Party's rights with respect to the Pledged Collateral in any
insolvency, bankruptcy or reorganization proceedings, be applied against the
Secured Obligations, whether or not all the same be then due and payable, in
such manner and order as set forth in the Purchase Agreement and Promissory
Note.
7. Additional Remedies Upon Event of Default.
Upon the occurrence of any Event of Default and while such Event of
Default shall be continuing, the Secured Party shall have, in addition to all
rights and remedies of a secured party under the Code or other applicable Law,
and in addition to its rights under Section 6 above and under the Purchase
Agreement, the Promissory Note and the Other Documents, the following rights and
remedies:
(a) The Secured Party may, after ten (10) days' advance notice to
Debtor, sell, assign, give an option or options to purchase or otherwise dispose
of the Pledged Collateral or any part thereof at public or private sale, at any
of the Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Secured Party may deem commercially
reasonable. Debtor agrees that ten (10) days' advance notice of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. The Secured Party shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Debtor recognizes that the Secured Party may be compelled to resort
to one or more private sales of the Pledged Collateral to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
securities for its own account for investment and not with a view to the
distribution or resale thereof. Debtor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale
5
shall be deemed to have been made in a commercially reasonable manner. The
Secured Party shall be under no obligation to delay sale of any of the Pledged
Collateral for the period of time necessary to permit Debtor to register such
securities for public sale under the Securities Act of 1933, as amended, or
under applicable state securities laws, even if Debtor would agree to do so.
(b) The proceeds of any collection, sale or other disposition of
the Pledged Collateral of Debtor, or any part thereof, shall, after the Secured
Party has made all deductions of expenses, including but not limited to
reasonable attorneys' fees and other expenses incurred in connection with
repossession, collection, sale or disposition of such Pledged Collateral or in
connection with the enforcement of the Secured Party's rights with respect to
the Pledged Collateral in any insolvency, bankruptcy or reorganization
proceedings, be applied against the Secured Obligations, whether or not all the
same be then due and payable, in such manner and order as set forth in the
Purchase Agreement.
8. Secured Party's Duties.
The powers conferred on the Secured Party hereunder are solely to
protect its interest in the Pledged Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any Pledged
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Secured Party shall have no duty as to any Pledged Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Pledged Collateral.
9. No Waiver; Cumulative Remedies.
No failure to exercise, and no delay in exercising, on the part of the
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any further exercise thereof or the exercise of any
other right, power or privilege. The remedies herein provided are cumulative and
not exclusive of any remedies provided under the Purchase Agreement, the
Promissory Note, and the Other Documents or by Law. Debtor waives any right to
require the Secured Party to proceed against any other person or to exhaust any
of the Pledged Collateral or other security for the Secured Obligations or to
pursue any remedy in the Secured Party's power.
10. Assignment.
All rights of the Secured Party under this Agreement shall inure to the
benefit of its successors and assigns. All obligations of Debtor shall bind its
successors and assigns; provided, however, Debtor may not assign or transfer any
of its rights and obligations hereunder or any interest herein.
11. Severability.
Any provision of this Agreement which shall be held invalid or
unenforceable shall be ineffective without invalidating the remaining provisions
hereof.
6
12. Governing Law and Jurisdiction.
This Agreement shall be construed in accordance with and governed by
the internal laws of the Commonwealth of Pennsylvania without regard to its
conflicts of law principles, except to the extent the validity or perfection of
the security interests or the remedies hereunder in respect of any Pledged
Collateral are governed by the law of a jurisdiction other than the Commonwealth
of Pennsylvania. The Debtor hereby irrevocably consents to the exclusive
jurisdiction of the courts of the Commonwealth of Pennsylvania located within
Philadelphia County or the United States District Court for the Eastern District
of Pennsylvania for the resolution of all claims, disputes and controversies
arising hereunder.
13. Notices.
Debtor agrees that all notices, statements, requests, demands and other
communications under this Agreement shall be given to each of the parties at the
address set forth below their names and the manner provided in Section 12 of the
Purchase Agreement.
14. Specific Performance.
Debtor acknowledges and agrees that, in addition to the other rights of
the Secured Party hereunder and under the Purchase Agreement and Promissory Note
because the Secured Party's remedies at law for failure of Debtor to comply with
the provisions hereof relating to the Secured Party's rights (i) to inspect the
books and records related to the Pledged Collateral, (ii) to receive the various
notifications Debtor is required to deliver hereunder, (iii) to obtain copies of
agreements and documents as provided herein with respect to the Pledged
Collateral, (iv) to enforce the provisions hereof pursuant to which Debtor has
appointed the Secured Party its attorney-in-fact, and (v) to enforce the Secured
Party's remedies hereunder, would be inadequate and that any such failure would
not be adequately compensable in damages, Debtor agrees that each such provision
hereof may be specifically enforced.
15. Dividends; Voting Rights in Respect of the Pledged Collateral.
So long as no Event of Default shall occur and be continuing under the
Purchase Agreement, Debtor may exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement, the Purchase Agreement, the
Promissory Note or Other Documents; provided, however, that Debtor will not
exercise or will refrain from exercising any such right, as the case may be, if
such action would be inconsistent with the covenants and obligations of Debtor
under the Purchase Agreement and the Other Documents or would have a material
adverse effect on the value of any Pledged Collateral. So long as no Event of
Default has occurred and is continuing, any lawful dividends paid in cash to
Debtor in respect of the Pledged Collateral may be used or applied by Debtor for
any purpose permitted by the Purchase Agreement.
16. Entire Agreement; Amendments.
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
relating to a grant of a
7
security interest in the Pledged Collateral by Debtor. This Agreement may not be
amended or supplemented except by a writing signed by the Secured Party and
Debtor.
17. Counterparts.
This Agreement may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.
18. Descriptive Headings.
The descriptive headings which are used in this Agreement are for the
convenience of the parties only and shall not affect the meaning of any
provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
SECURED PARTY:
VDC CORPORATION LTD.
By: /s/ Xxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxx, President
DEBTOR:
ROZEL INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx, President
[SEAL]
Principal Place of Business:
----------------------------
Tropic Isle Building
Wickhams Cay
Road Town
Tortola
British Virgin Islands
Chief Executive Office:
-----------------------
Tropic Isle Building
Wickhams Cay
Road Town
Tortola
British Virgin Islands
8
SCHEDULE A
TO
PLEDGE AGREEMENT
Description of Pledged Collateral
Type and Amount of Ownership
(i) 3,972,877 shares of common stock, par value $.01 per share, of
netValue, Inc.;
(ii) 100,000 shares of common stock, par value $.01 per share of
Informatix, Inc.;
(iii) $700,000 Note, dated October 18, 1997 owed by Informatix, Inc. to
VDC Corporation Ltd.; and
(iv) Promissory Notes in the aggregate principal amount of $200,000
owed by netValue, Inc. to VDC Corporation Ltd.
9
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is dated December 18, 1997 and is made between
Rozel International Holdings Limited, a British Virgin Island corporation
("Grantor") and VDC Corporation Ltd. ("Secured Party") pursuant to the Purchase
Agreement referred to below.
WITNESSETH THAT:
WHEREAS, pursuant to that certain Asset Purchase Agreement dated
December 18, 1997 (as it may hereafter be amended or otherwise modified from
time to time, the "Purchase Agreement") between Grantor and the Secured Party,
the Grantor has agreed to purchase certain assets of Grantor, which purchase
price for such assets includes a Promissory Note in the aggregate amount of
$3,500,000 ("Promissory Note");
WHEREAS, the obligations of the Secured Party to pay the Promissory Note
pursuant to the Purchase Agreement are subject to the condition, among others,
that Grantor secure its obligations to the Secured Party under the Purchase
Agreement and Promissory Note by the grant of security interests in the
Collateral, as defined and more fully set forth herein; and
WHEREAS, Grantor is (or will be with respect to after-acquired property)
the legal and beneficial owner and holder of the Collateral (as defined in
Section 1 hereof), and has agreed to grant security interests in such Collateral
to the Secured Party on the terms and conditions set forth herein.
NOW, THEREFORE, intending to be legally bound hereby and for value
received, the parties hereto covenant and agree as follows:
1. Definitions. Terms which are defined in the Purchase Agreement and
not otherwise defined herein are used herein as defined therein. In addition to
the words and terms defined elsewhere in this Security Agreement, the following
words and terms shall have the following meanings, respectively, unless the
context otherwise clearly requires:
(a) "Code" shall mean the Uniform Commercial Code of each state as
enacted and in effect on the date hereof in each applicable jurisdiction, and as
the same may subsequently be amended from time to time.
(b) "Collateral" shall mean, all of Grantor's right, title and
interest in, to and under the following described property, whether now owned or
hereafter acquired (words and terms defined in the Code shall have the same
meanings when used herein):
(i) 3,972,877 shares of common stock, par value $.01 per share
("NV Common Stock"), of netValue ("NetValue");
(ii) 100,000 shares of common stock, par value $.01 per share
("Informatix Common Stock"), of Informatix, Inc. ("Informatix");
(iii) $700,000 Note, dated October 18, 1997 (the "Note") owed by
Informatix to VDC Corporation Ltd.; and
(iv) Promissory Notes in the aggregate principal amount of
$200,000 ("NetValue Notes") owed by NetValue to VDC Corporation Ltd.
The NV Common Stock, Informatix Common Stock, the Note and the NetValue
Notes, collectively, shall be referred to as the "Securities". The term
"Collateral" as it applies to the NV Common Stock and Informatix Common Stock
shall also include all rights and privileges pertaining thereto, including,
without limitation, all securities and additional securities receivable in
respect of or in exchange for such securities, all rights to subscribe for
securities incident to or arising from ownership of such securities, all cash,
interest, stock and other dividends or distributions paid or payable on such
securities, and all books and records pertaining to the foregoing, including,
without limitation, all stock record and transfer books, and whatever is
received when any of the foregoing is sold, exchanged or otherwise disposed of,
including any proceeds as such term is defined in the Code.
(c) "Secured Indebtedness" shall mean (i) all obligations, whether
of principal, interest, fees, expenses or otherwise, of Grantor to Secured
Party, whether now existing or hereafter incurred, under the Purchase Agreement,
Promissory Note or any of the Other Documents as any of the same may from time
to time be amended, modified or supplemented, together with any and all
extensions, renewals, refinancings or refundings thereof in whole or in part by
the Secured Party, (ii) all out-of-pocket costs, expenses and disbursements,
including reasonable attorneys' fees and legal expenses, incurred by the Secured
Party in the collection of any of the obligations referred to in subclause
1(c)(i) above; and (iii) any advances made, subsequent to an Event of Default,
by the Secured Party, for the reasonable maintenance, preservation, protection
or enforcement of, or realization upon, the Collateral, including advances for
taxes and the like and reasonable expenses incurred to sell or otherwise realize
on, or prepare for sale or other realization on, any of the Collateral.
2. Assignment and Grant of Security Interests. As security for the due
and punctual payment and performance of the Secured Indebtedness in full,
Grantor hereby agrees that the Secured Party shall have, and Grantor hereby
grants to and creates in favor of the Secured Party, for the benefit of the
Secured Party, to secure all of the Secured Indebtedness, a continuing first
priority security interest in and to Grantor's Collateral. Without limiting the
generality of Section 4 below, Grantor further agrees that with respect to each
item of Collateral as to which (i) the creation of valid and enforceable
security interests is not governed exclusively by the Code or (ii) the
perfection of valid and enforceable security interests therein under the Code
cannot be accomplished by the Secured Party taking possession thereof or by the
filing in appropriate locations of appropriate Code financing statements
executed by the Grantor, Grantor will at its expense execute and deliver to the
Secured Party such documents, agreements, notices, assignments and instruments
and take such further actions as may be reasonably requested by the Secured
Party from time to time for the purpose of creating a valid and perfected first
priority
2
lien on such item, enforceable against the Grantor and all third parties to
secure the Secured Indebtedness.
3. Representations and Warranties. Except as otherwise set forth in the
Purchase Agreement, Grantor represents, warrants and covenants to the Secured
Party that:
(a) Grantor is the legal and beneficial owner and holder of the
Collateral and Grantor has and will continue to have good and marketable title
to the Collateral which Grantor purports to own or which is reflected as owned
in its books and records.
(b) The Grantor has received value from the Secured Party for
Grantor's grant of security interests hereunder and, except for the security
interests granted to and created in favor of the Secured Party hereunder, all of
the Collateral is and will continue to be free and clear of all liens, except
the Permitted Lien.
(c) Grantor has full power to enter into, execute, deliver and carry
out this Security Agreement and to perform its obligations hereunder and all
such actions have been duly authorized by all necessary proceedings on its part.
This Security Agreement has been duly and validly executed and delivered by
Grantor. This Security Agreement constitutes the legal, valid and binding
obligations of Grantor, enforceable against it in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforceability of creditors' rights generally or limiting the right of specific
performance.
(d) Neither the execution and delivery of this Security Agreement
nor compliance with the terms and provisions hereof (i) will conflict with or
result in any breach of the terms and conditions of the articles of
incorporation, bylaws or equivalent documents of Grantor or of any law or of the
Termination Agreement or any material agreement or instrument to which Grantor
is a party or by which it is bound or to which it is subject, (ii) will
constitute a default under any of the documents referred to in clause 3(d)(i)
above or (iii) will result in the creation or enforcement of any lien (other
than the Permitted Lien) whatsoever upon any Collateral (now or hereafter
acquired) of Grantor.
4. Further Assurances. Grantor will, from time to time, at its expense,
faithfully preserve and protect the Secured Party's security interests in the
Collateral as continuing first priority perfected security interests, and will
do all such other acts and things and will, upon request therefor by the Secured
Party, execute, deliver, file and record all such other documents and
instruments, including financing statements, security agreements, pledges,
assignments, documents and powers of attorney with respect to the Collateral,
and pay all filing fees and taxes related thereto as the Secured Party in its
reasonable discretion may deem necessary or advisable from time to time in order
to preserve, perfect or protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any of the Collateral. Without limiting
the generality of the foregoing, to the extent Article 9 of the Code does not
govern the creation and/or perfection of the security interests intended to be
created hereunder, Grantor agrees to execute and deliver
3
such further documents and instruments and do such further acts as the Secured
Party may from time to time require.
5. Covenants. Grantor covenants and agrees that, (a) it will not sell,
assign or otherwise dispose of any portion of the Collateral; (b) it will obtain
and maintain sole and exclusive possession of its Collateral; (c) it will keep
materially accurate and complete books and records concerning the Collateral and
such other books and records as may be required under the Purchase Agreement;
(d) it will promptly furnish to the Secured Party such information and documents
relating to the Collateral as the Secured Party may reasonably request in order
to confirm the status of the Secured Party's security interests in such
Collateral; (e) it will not take or omit to take any actions, the taking or the
omission of which might result in a material adverse alteration or impairment of
the Collateral or in a violation of this Security Agreement; and (f) it will
execute and deliver to the Secured Party and record such supplements to this
Security Agreement and additional assignments as the Secured Party reasonably
may request to evidence and confirm the security interests herein contained.
6. Preservation of Security Interests. Grantor assumes full
responsibility for taking and hereby agrees to take any and all necessary steps
to preserve and defend the Secured Party's right, title and security interests
in and to the Collateral against the claims and demands of all persons. The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in the Secured Party's possession if, prior
to the existence of an Event of Default, the Secured Party takes such action for
that purpose as such Grantor shall reasonably request in writing, provided that
such requested action will not, in the judgment of the Secured Party, impair the
security interests in the Collateral created hereby or the Secured Party's
rights in, or the value of, such Collateral, and provided further that such
written request is received by the Secured Party in sufficient time to permit
the Secured Party to take the requested action.
7. Secured Party's Rights with Respect to the Collateral. At any time
and from time to time, whether or not an Event of Default shall have occurred,
and without notice to or consent of the Grantor, the Secured Party may, at its
option, do any or all of the following: (a) do anything which the Grantor is
required but fails to do hereunder, and in particular the Secured Party may, if
the Grantor fails to do so, (i) insure or take any reasonable steps to protect
the Collateral, (ii) pay any or all taxes, levies, expenses and costs arising
with respect to the Collateral, or (iii) pay any or all premiums payable on any
policy of insurance required to be obtained or maintained hereunder, and add any
amounts paid under this Section 7 to the principal amount of the Promissory
Note, and other liabilities of Grantor secured by this Security Agreement; (b)
inspect the Collateral at any reasonable time; and (c) pay any amounts the
Secured Party reasonably elects to pay or advance hereunder on account of
insurance, taxes or other costs, fees or charges arising in connection with the
Collateral, either directly to the payee(s) of such cost, fee or charge,
directly to the Grantor, or to such payee(s) and Grantor, jointly.
8. Remedies on Default. If there shall have occurred and be continuing
an Event of Default under the terms of the Purchase Agreement, then the Secured
Party shall have such rights
4
and remedies with respect to the Collateral or any part thereof and the proceeds
thereof as are provided by the Code and such other rights and remedies with
respect thereto which it may have at law or in equity or under this Security
Agreement, including to the extent not inconsistent with the provisions of the
Code or any other applicable Law, the right to take over and collect the
Collateral which consists of amounts owing to Grantor to the extent not
prohibited by applicable law. To this end, the Secured Party shall have the
right to (a) transfer all or any part of any of the Collateral into the Secured
Party's name or into the name of its nominee or nominees and thereafter receive
all cash, stock and other dividends or distributions paid or payable in respect
thereof, and otherwise act with respect thereto as the absolute owner thereof;
(b) notify the obligors on any of the Collateral, whether accounts or otherwise,
to make payment thereon directly to the Secured Party, whether or not the
Grantor was theretofore making collections thereon; (c) take control of and
manage the Collateral; (d) apply to the payment of the Secured Indebtedness,
whether it be due and payable or not, any moneys, including cash dividends and
income from the Collateral, now or hereafter in the hands of the Secured Party,
on deposit or otherwise, belonging to Grantor, in accordance with Section 9
hereof; (e) endorse the name of the Grantor upon any checks or other evidences
of payment or any document or instrument that may come into the possession of
the Secured Party as proceeds of or relating to such Grantor's Collateral; (f)
demand, xxx for, collect, compromise and give acquittances for the Collateral;
(g) prosecute, defend or compromise any action, claim or proceeding with respect
to the Collateral; and (h) take such other action as the Secured Party may deem
appropriate, including extending or modifying the terms of payment of the
debtors of Grantor. In addition, upon the occurrence of an Event of Default but
subject to any restrictions set forth in the Termination Agreement, Grantor, at
the request of the Secured Party, shall assemble all or any portion of the
Grantor's Collateral at such locations as the Secured Party shall designate
which are reasonably convenient to Grantor, and the Secured Party may sell,
assign, give an option or options to purchase or otherwise dispose of all or any
part of the Collateral at any public or private sale at such place or places and
at such time or times and upon such terms, whether for cash or on credit, and in
such manner, as the Secured Party may determine, and apply the proceeds so
received in accordance with Section 9 hereof. Written notice of sale mailed by
certified mail, return receipt requested, to the Grantor, at least ten (10) days
prior to such sale shall be deemed reasonable notice.
In the event of a breach by Grantor in the performance of any of the
terms of this Security Agreement, the Secured Party may demand specific
performance of this Security Agreement and seek injunctive relief and may
exercise any other remedy, available at law or in equity, it being recognized
that the remedies of the Secured Party at law may not fully compensate the
Secured Party for the damages it may suffer in the event of a breach hereof.
9. Application of Proceeds. The proceeds of the Collateral shall be
applied in accordance with the terms of the Purchase Agreement. Grantor shall be
liable for any deficiency if the proceeds of any sale, assignment, giving of an
option or options to purchase or other disposition of the Collateral is
insufficient to pay all amounts to which the Secured Party is entitled.
5
10. Attorneys-in-Fact. After an Event of Default the Grantor hereby
irrevocably appoints the Secured Party, its officers, employees and agents, or
any of them, as attorneys-in-fact, with full power of substitution, for Grantor
for the purpose of carrying out the provisions of this Security Agreement and
taking any action and executing, delivering, filing and recording any
instruments which the Secured Party may deem necessary or advisable to
accomplish the purposes hereof, which power of attorney being given for security
is coupled with an interest and irrevocable. The Grantor hereby ratifies and
confirms and agrees to ratify and confirm all action taken by the Secured Party,
its officers, employees or agents pursuant to the foregoing power of attorney.
11. Indemnity and Expenses.
(a) The Grantor unconditionally agrees to indemnify the Secured
Party from and against any and all claims, losses and liabilities arising out of
or resulting from this Security Agreement (including enforcement of this
Security Agreement), except claims, losses or liabilities resulting from the
gross negligence or willful misconduct of the Secured Party.
(b) The Grantor unconditionally agrees upon demand to pay to the
Secured Party the amount of any and all reasonable and necessary out-of-pocket
costs, expenses and disbursements, including fees and expenses of its counsel,
which the Secured Party may incur in connection with (i) the administration of
this Security Agreement, (ii) the custody, preservation, use or operation of, or
the sale of, collection from, or other realization upon, the Collateral, (iii)
the exercise or enforcement of any of the rights of the Secured Party hereunder
or (iv) the failure by the Grantor to perform or observe any of the provisions
hereof.
12. Security Interest Absolute; Waiver of Notices. All rights of the
Secured Party hereunder, all security interests hereunder, and all obligations
of the Grantor hereunder shall be absolute and unconditional, irrespective of:
(a) any lack of validity or enforceability of the Purchase Agreement, Promissory
Note or any of the Other Documents; (b) any change in the time, manner or place
or payment of, or in any other term of, all or any of the Secured Indebtedness
or any other amendment or waiver of or any consent to any departure from the
Purchase Agreement, Promissory Note or any of the Other Documents; (c) any
exchange, release or non-perfection of any other Collateral; or (d) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, any Grantor or any third party mortgagors, pledgors or grantors of
security interests. Grantor waives any and all notice with respect to acceptance
by the Secured Party of this Security Agreement, the provisions of the Purchase
Agreement, Promissory Note or any of the Other Documents or any other note,
instrument or agreement relating to the Secured Indebtedness, and any default in
connection with the Secured Indebtedness. Grantor waives any presentment,
demand, notice of dishonor or nonpayment, protest, notice of protest and any
other notice of any kind in connection with the Secured Indebtedness.
13. Termination. Upon payment in full of the Secured Indebtedness and
termination of the Purchase Agreement and Promissory Note, this Security
Agreement shall terminate and be of no further force and effect, and the Secured
Party, at the Grantor's expense, shall thereupon
6
promptly return to Grantor the Collateral and such other documents delivered by
Grantor hereunder as may then be in the Secured Party's possession. Upon any
such termination, the Secured Party will, at the Grantor's expense, execute and
deliver to the Grantor such documents as that Grantor shall reasonably request
to evidence such termination.
14. Modifications, Amendments and Waivers. Any and all agreements
amending or changing any provision of this Security Agreement or the rights of
any of the Secured Party or the Grantor, and any and all waivers or consents to
Events of Default or other departures from the due performance of the Grantor
hereunder shall be made only pursuant to the provisions of the Purchase
Agreement.
15. No Implied Waivers; Cumulative Remedies. No course of dealing and no
failure or delay on the part of the Secured Party in exercising any right,
remedy, power or privilege hereunder shall operate as a waiver thereof or of any
other right, remedy, power or privilege of the Secured Party hereunder; and no
single or partial exercise of any such right, remedy, power or privilege shall
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights and remedies of the Secured Party
under this Security Agreement are cumulative and not exclusive of any rights or
remedies which it may otherwise have.
16. Notices. All notices, statements, requests, demands and other
communications given to or made upon the Grantor, the Secured Party in
accordance with the provisions of this Security Agreement shall be given or made
as provided in Section 12 of the Purchase Agreement.
17. Severability.
(a) Grantor agrees that the provisions of this Security Agreement
are severable, and in an action or proceeding involving any state or federal
bankruptcy, insolvency or other law affecting the rights of creditors generally:
(i) if any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision in this Agreement in
any jurisdiction;
(ii) if this Security Agreement would be held or determined to
be void, invalid or unenforceable on account of the amount of the aggregate
liability of Grantor under this Security Agreement, then, notwithstanding any
other provision of this Security Agreement to the contrary, the aggregate amount
of such liability shall, without any further action by the Secured Party,
Grantor or any other person, be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in such action or
proceeding.
(iii) If the grant of any security interest hereunder by Grantor
is held or determined to be void, invalid or unenforceable, in whole or in part,
such holding or
7
determination shall not impair or affect the validity and enforceability of any
clause or provision not so held to be void, invalid or unenforceable.
18. Governing Law. This Security Agreement shall be deemed to be a
contract under the laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State, without reference to its conflicts of law principles, except as required
by mandatory provisions of law and except to the extent that the validity or
perfection of security interests hereunder, or remedies hereunder with respect
to the Collateral, is governed by the laws of a jurisdiction other than the law
of the Commonwealth of Pennsylvania.
19. Successors and Assigns. This Security Agreement shall be freely
assignable and transferable by the Secured Party in connection with the
assignment or transfer of the Secured Indebtedness; provided, however, the
duties and obligations of the Grantor may not be delegated or transferred by the
Grantor, without the written consent of the Secured Party. The rights and
privileges of the Secured Party shall inure to their benefit and the benefit of
its respective successors and assigns (as permitted under the Purchase
Agreement) and the duties and obligations of the Grantor shall bind the Grantor
and its respective successors and assigns.
20. Counterparts. This Security Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed and delivered, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
21. Consent to Jurisdiction; Waiver of Jury Trial. The Grantor hereby
irrevocably consents to the exclusive jurisdiction of the courts of Bermuda and
waives personal service of any and all process upon it and consents that all
such service of process be made by certified or registered mail directed to the
Grantor at the addresses set forth or referred to in Section 16 hereof and
service so made shall be deemed to be completed upon actual receipt thereof. The
Grantor waives any objection to jurisdiction and venue of any action instituted
against it as provided herein and agrees not to assert any defense based on lack
of jurisdiction or venue, AND THE SECURED PARTY WAIVES TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM WITH RESPECT TO THIS SECURITY AGREEMENT
TO THE FULL EXTENT PERMITTED BY LAW.
WITNESS the due execution hereof as of the day and year first above
written.
ROZEL INTERNATIONAL HOLDINGS
LIMITED
By: /s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx, President
VDC CORPORATION LTD.
By: /s/ Xxxxxx Xxxxx
----------------------------
Xxxxxx Xxxxx, President
9
ASSIGNMENT
The undersigned (the "Assignor") hereby assigns all of its right, title
and interest in and to a certain promissory note in the principal amount of
$700,000 dated October 18, 1997 by and between the Assignor as "Payee" and
Informatix, Inc., as "Maker" to Rozel International Holdings Limited (the
"Assignee").
This Assignment and any other documents delivered in connection
herewith and the rights and obligations of the parties hereto and thereto shall
be for all purposes governed by and construed and enforced in accordance with
the internal laws of the Commonwealth of Pennsylvania without giving effect to
its conflicts of law principles.
IN WITNESS WHEREOF, the parties, intending to be legally bound hereby,
have executed this Assignment as of the 18th day of December, 1997.
ATTEST: ASSIGNOR:
VDC CORPORATION LTD.
By: /s/ Xxxxxx Xxxxx
----------------------------- -------------------------------
Title: Xxxxxx Xxxxx, President
ATTEST: ASSIGNEE:
ROZEL INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx Xxxxxx
----------------------------- -------------------------------
Title: Xxxxxx Xxxxxx, President
ASSIGNMENT
The undersigned (the "Assignor") hereby assigns all of its right, title
and interest in and to certain promissory notes in the aggregate principal
amount of $200,000 by and between the Assignor as "Payee" and netValue, Inc., as
"Maker" to Rozel International Holdings Limited (the "Assignee").
This Assignment and any other documents delivered in connection
herewith and the rights and obligations of the parties hereto and thereto shall
be for all purposes governed by and construed and enforced in accordance with
the internal laws of the Commonwealth of Pennsylvania without giving effect to
its conflicts of law principles.
IN WITNESS WHEREOF, the parties, intending to be legally bound hereby,
have executed this Assignment as of the 18th day of December, 1997.
ATTEST: ASSIGNOR:
VDC CORPORATION LTD.
By: /s/ Xxxxxx Xxxxx
----------------------------- -------------------------------
Title: Xxxxxx Xxxxx, President
ATTEST: ASSIGNEE:
ROZEL INTERNATIONAL HOLDINGS LIMITED
By: /s/ Xxxxxx Xxxxxx
----------------------------- -------------------------------
Title: Xxxxxx Xxxxxx, President
