LOAN SALE AGREEMENT Dated and Effective as of January 31, 2005 by and between International Microcomputer Software, Inc., SELLER, and Mag Multi Corp., BUYER
EXHIBIT
NO#
Dated
and
Effective as of January 31, 2005
by
and
between
International
Microcomputer Software, Inc.,
SELLER,
and
Mag
Multi
Corp.,
BUYER
THIS
LOAN
SALE AGREEMENT ("Agreement "), is made and entered into as of the 31st
day of
January 2005, by and between International Microcomputer Systems, Inc.
("Seller"), a California corporation, having an address of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇, and Mag Multi Corp. ("Buyer"), a New York corporation, having
an
address of ▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇.
RECITALS
A. Seller
is
the owner of and wishes to sell the Loan (as defined in Article 1 below)
on the
terms
and subject to the conditions set forth herein.
B. Buyer
wishes to purchase the Loan, on the terms and subject to the conditions set
forth herein.
AGREEMENT
NOW,
THEREFORE,
in
consideration of the mutual promises herein set forth and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer agree as follows:
ARTICLE
1
DEFINITIONS
For
purposes of this Agreement, the following terms shall have the meanings
indicated:
Section
1.1 “Agreement”
means
this Loan Sale Agreement, including all Exhibits and Schedules
hereto.
Section
1.2 “Assigned
Rights”
means
all right, title and interest in, to and under the Loan and the Loan Documents,
including, without limitation, all rights to principal, interest, fees, costs
and expenses payable thereunder commencing as of the Closing Date and all
other
rights and claims thereunder.
Section
1.3 “Assignment
of Assigned Rights”
means
the document to be delivered on the Closing
Date by Buyer and Seller, the form of which is attached hereto as Exhibit
A,
whereby
Seller assigns to Buyer, and Buyer accepts from Seller, the Assigned Rights.
Section
1.4 “Business
Day”
means
any day on which Seller is open for business other than a Saturday, a Sunday
or
a state or Federal holiday in the State of New York.
Section
1.5 "Closing"
means
the
occurrence of all acts required by this Agreement to assign and transfer
the
Assigned Rights from Seller to Buyer and for Buyer to accept and assume the
Assigned Rights from Seller.
Section
1.6 “Closing
Date”
means
January 31, 2005, or such other date upon which Buyer and Seller may mutually
agree.
Section
1.7 “Closing
Documents”
means
all documents described herein that are required to be delivered at the Closing
by Seller or Buyer.
Section
1.8 “Collateral”
means,
as the case may be, the real and personal property, guaranty, pledge and/or
other property securing the Loan Note as described in the Loan
Documents.
Section
1.9 “Collateral
Document”
means,
as the case may be, the deed of trust, mortgage, security agreement, UCC
financing statements, guaranty, surety, letter of credit, pledge, certificate,
loan agreement and/or other instruments creating a security interest in,
and/or
a lien, interest or encumbrance upon or in any of the Collateral.
Section
1.10 “Loan”
means
(a) the obligation evidenced by the Loan Note, the Loan Documents and/or
any
amendment thereto; (b) all rights, powers, liens or security interests of
Seller
in or under any Collateral Document; and (c) any judgments founded upon the
Loan
Note or any other Loan Document, to the extent attributable thereto, or
any lien
arising therefrom.
-2-
Section
1.11 “Loan
Documents"
means
all of the agreements, certificates, legal opinions or other documents related
to, or evidencing, the Loan, as obtained at the time of its origination and
any
subsequent modification, including, but not limited to, the Loan Note, the
Collateral Documents, loan agreements, appraisals, guarantees, insurance
certificates, borrower estoppel certifications and credit reports.
Section
1.12 “Loan
Files”
means
all documents, the Loan Note and the Collateral Documents, in the possession
of
Seller pertaining to the Loan.
Section
1.13 “Loan
Note”
means
that certain 15% Promissory Note dated September 18, 2003 evidencing an
indebtedness of the principal sum of $350,000.00 executed by Digital Creative
Development Corporation (“DCDC”), as payor, in favor of Seller, as payee, as
amended by that certain Amendment #1 to15% Promissory Note made as of September
18, 2004 executed by DCDC and Seller.
Section
1.14 “Obligor”
means
Digital Creative Development Corporation, and any other person or entity
obligated for the Loan.
Section
1.15 “Purchase
Price”
means
the sum of Three Hundred Forty-Three Thousand Four Hundred Six Dollars and
25/100 ($343,406.25).
ARTICLE
2
PURCHASE
AND SALE OF THE ASSIGNED RIGHTS
Section
2.1 Agreement
to Sell and Purchase Assigned Rights.
On the
Closing Date, Seller agrees to sell, transfer and assign, and Buyer agrees
to
purchase the Assigned Rights.
Section
2.2 Assignment
of Assigned Rights.
On the
Closing Date, Seller and Buyer shall each execute and deliver to each other
an
Assignment of Assigned Rights in the form of Exhibit
A
hereto,
executed by an authorized representative of Seller and Buyer, which Assignment
of Assigned Rights shall sell, transfer, assign, set-over, convey and delegate
to Buyer the Assigned Rights.
Section
2.3 Consideration
for Assigned Rights.
As
consideration for the transfers and assignments hereunder by Seller, Buyer
shall
pay the Purchase Price to Seller.
ARTICLE
3
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BUYER
Buyer
hereby represents, warrants and covenants as of the date hereof and as of
the
Closing Date that:
Section
3.1 Authorization
and Compliance.
Buyer
is duly and legally authorized to enter into this Agreement and has complied
with all laws, rules, regulations, charter provisions and bylaws to which
it may
be subject, and that the undersigned representative is authorized to act
on
behalf of and bind Buyer to the terms of this Agreement.
Section
3.2 Binding
Obligation of Buyer.
Assuming due authorization, execution and delivery by each other party hereto,
this Agreement and all of the obligations of Buyer hereunder are the legal,
valid and binding obligations of Buyer, enforceable in accordance with the
terms
of this Agreement, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of
creditors' rights generally and by general equity principles (regardless
of
whether such enforcement is considered in a proceeding in equity or at
law).
-3-
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF SELLER
Section
4.1 Authorization
and Compliance.
Seller
is duly and legally authorized to enter into this Agreement and has complied
with all laws, rules, regulations, charter provisions and bylaws to which
it may
be subject, and that the undersigned representative is authorized to act
on
behalf of and bind Seller to the terms of this Agreement.
Section
4.2 Binding
Obligation of Seller.
Assuming due authorization, execution and delivery by each
other party hereto, this Agreement and all of the obligations of Seller
hereunder are the legal, valid and binding obligations of Seller enforceable
in
accordance with the terms of this Agreement, except as such enforcement may
be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general equity
principles (regardless of whether such enforcement is considered in a proceeding
in equity or at law).
Section
4.3 Seller
is
the owner and holder of the Loan Documents and has not previously granted,
assigned, pledged or transferred the Assigned Rights, and there are no
outstanding agreements to sell the Assigned Rights to which Seller is a party,
nor rights of first refusal to purchase the Assigned Rights.
Section
4.4 Seller hereby represents that the outstanding principal balance of the
Loan
is $325,000.00, as of the date hereof, and that the accrued interest thereon
is
$18,406.25, as of the date hereof, and that DCDC, the payor under the Loan
Note,
has no defense, set-off or claim against said indebtedness.
ARTICLE
5
CONDITIONS
PRECEDENT
Section
5. 1 Notwithstanding
anything in this Agreement to the contrary, Buyer's obligation to purchase
the
Assigned Rights and Obligations shall be subject to and contingent upon the
satisfaction of each of the following conditions precedent, prior to or on
the
Closing Date:
(a)
All
Closing Documents necessary to consummate the transactions contemplated in
this
Agreement shall have been executed and delivered by Seller and Buyer as required
by this Agreement.
(b)
Neither Buyer nor Seller shall have terminated this Agreement pursuant to
the
terms of this Agreement.
(c)
Seller’s
delivery to Buyer of a certificate executed and delivered by DCDC to Seller
confirming DCDC’s
unqualified consent to Seller’s
assignment of (i) the Loan Note, as amended; (ii) the Pledge and Security
Agreement dated as of September 18, 2003 by and between DCDC, as Pledgor,
and
Seller, as second party; (iii) Assignment Separate From Certificate dated
September 18, 2004, executed by DCDC in favor of Seller, with respect to
400,000
shares of the Common Stock of Seller represented by Certificate No. MS 14780
(the “IMSI
Shares”);
(iv)
Assignment of UCC-1 Statement granted by DCDC in favor of Seller respecting
(a)
the IMSI Shares and (b) the Certificates representing the IMSI Shares, together
with executed blank stock powers; (v) Assignment Separate From Certificate
dated
September 18, 2004, executed by DCDC in favor of Seller with respect to 304,250
shares of the Preferred Stock of Access Propeller Holdings, Inc. represented
by
Certificate No. PA-4 (the “APHI
Shares”);
and
(vi) Assignment of the UCC-1 Statement granted by DCDC in favor of Seller
respecting (a) the APHI Shares, and (b) the Certificates representing the
APHI
Shares, together with executed blank stock powers.
-4-
(d)
Seller’s
delivery to Buyer of an opinion of counsel of IMSI satisfactory to Seller
as
required by Section 7 of the Loan Note.
Section
5.2 Failure
or Waiver of Conditions Precedent.
In the
event any of the
conditions
set forth in Section
5.1 do
not
occur as of the Closing Date, or have not been waived in writing by Buyer
or
Seller, respectively, the party for whose benefit the failed condition exists
may terminate this Agreement by written notice to the other party, and neither
party shall have any further obligation to the other, other than as a result
of
a breach by Seller or Buyer as the case may be, or as stated in this
Agreement.
ARTICLE
6
CLOSING
Section
6.1 Closing.
The
Closing shall occur on the Closing Date and, upon the agreement of Seller
and
Buyer, shall be conducted either by mail or in person at the place designated
by
Buyer and reasonably acceptable to Seller.
Section
6.2 Deliveries
by Seller.
At
Closing, Seller shall deliver to Buyer the following:
(a) a
counterpart Assignment and Assumption of Assigned Rights, executed by
Seller;
(b)
UCC-3
assignment statements executed by Seller assigning Seller's security interests
in the Collateral created pursuant to the UCC-1 statements executed by DCDC
in
favor of Seller;
(c)
the
original Loan Note endorsed to the order of Buyer, together with an allonge
therefor;
(d)
Assignment of the Pledge and Security Agreement dated as of September 18,
2003
by and between DCDC, as pledgor, and Seller, as second party;
(e)
Assignment of Assignment Separate From Certificate with respect to the ISMI
Shares;
(f)
Assignment of Assignment Separate from Certificate with respect to the APHI
Shares;
(g)
Certificates representing the ISMI Shares;
(h)
Certificates representing the APHI Shares; and
(i)
the
documents set forth in Section 5.1 above, if not previously provided to
Buyer.
-5-
Section
6.3 Delivery
of Collateral Documents
Seller
agrees to make available to Buyer at Buyer’s
place
of business on the Closing Date each original Collateral Document in Seller's
possession affecting the Loans, together with copies of the contents of the
Loan
Files.
Section
6.4 Closing
Costs.
Seller
and Buyer shall each pay the fees and expenses of their respective legal
counsel
incurred in connection with this transaction. On the Closing Date, Buyer
shall
deposit with the Seller, by wire transfer of immediately available funds,
the
Purchase Price.
ARTICLE
7
BREACH
OF THE AGREEMENT
Section
7.1 Seller's
Breach.
If
Seller breaches this Agreement, and Buyer does not close the transactions
contemplated hereunder
or such breach is discovered after Closing, Seller shall be allowed a reasonable
opportunity to cure the breach. If the breach cannot be cured Buyer may,
at
Buyer's option, pursue all of Buyer's rights and remedies that Buyer may
have
under this Agreement and at law and/or in equity, and Buyer shall be entitled
to
a return of the Deposit.
Section
7.2 Buyer's
Breach.
If
Buyer defaults under this Agreement, Seller's sole and exclusive remedy at
law
shall be to terminate this Agreement.
Section
7.3 Survival.
The
parties agree that Seller's and Buyer's warranties and representations contained
in this Agreement and in any document
(including any certificate) executed pursuant to this Agreement shall survive
the Closing.
ARTICLE
8
NOTICES
Unless
otherwise provided for herein, all notices and other communications required
or
permitted hereunder shall be in writing (including a writing delivered by
facsimile transmission and simultaneously sent by regular mail) and shall
be
deemed to have been duly given (a) when delivered, if sent by registered
or
certified mail (return receipt requested), (b) when delivered, if delivered
personally or by facsimile or (c) on the second following Business Day, if
sent
by overnight mail or overnight courier, in each case to the parties at the
following addresses (or at such other addresses as shall be specified by
like
notice):
| If to the Buyer: | Mag Multi Corp. |
| ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | |
| Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| Fax No. ▇▇▇-▇▇▇-▇▇▇▇ | |
| with a copy to: | ▇▇▇▇▇▇▇▇ Weprin & Ustin LLP |
| ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | |
| Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. | |
| Fax No. ▇▇▇-▇▇▇-▇▇▇▇ | |
|
-
and -
|
|
|
▇▇▇▇▇▇
& ▇▇▇▇▇▇
|
|
| ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇▇ | |
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ | |
| Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. | |
| Fax No. ▇▇▇-▇▇▇-▇▇▇▇ | |
| If to the Seller: | International Microcomputer Software, Inc. |
| ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ | |
| ▇▇▇▇▇ ▇▇▇ | |
| ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
| Attention: Mr. ▇▇▇▇ ▇▇▇▇ | |
| Fax No. ▇▇▇-▇▇▇-▇▇▇▇ | |
|
-
and -
|
|
| ▇▇▇▇▇▇ & Diamond | |
| ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| ▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |
| Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Fax no. (415) 882 - 5400 | |
| with a copy to: | _______________________________ |
-6-
ARTICLE
9
MISCELLANEOUS
PROVISIONS
Section
9.1 Severability.
Each
part of this Agreement is intended to be severable. If any term, covenant,
condition or provision hereof is unlawful, invalid, or unenforceable for
any
reason whatsoever, and such illegality, invalidity, or unenforceability does
not
affect the remaining parts of this Agreement, then all such remaining parts
hereof shall be valid and enforceable and have full force and effect as if
the
invalid or unenforceable part had not been included.
Section
9.2 Rights
Cumulative; Waivers.
The
rights of each of the parties under this Agreement are cumulative and may
be
exercised as often as any party considers appropriate. The right of each
of the
parties hereunder shall not be capable of being waived or varied otherwise
than
by an express waiver or variation in writing. Any failure to exercise or
any
delay in exercising any of such rights shall not operate as a waiver or
variation of that or any other such right. Any defective or partial exercise
of
any of such right shall not preclude any other or further exercise of that
or
any other such right. No act or course of conduct or negotiation on the part
of
any party shall in any way preclude such party from exercising any such right
or
constitute suspension or any variation of any such right.
Section
9.3 Headings.
The
headings of the Articles and Sections contained in this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of
this
Agreement or any provision hereof.
Section
9.4 Construction.
Unless
the context otherwise requires, singular nouns and pronouns, when used herein,
shall be deemed to include the plural of such noun or pronoun and a pronoun
of
one gender shall be deemed to include the equivalent pronoun of the other
gender.
Section
9.5 Prior
Understandings.
This
Agreement supersedes any and all prior discussions and agreements between
Seller
and Buyer with respect to the purchase of the Loans and other matters contained
herein, and this Agreement contains the sole and entire understanding between
the parties hereto with respect to the transactions contemplated
herein.
Section
9.6 Integrated
Agreement.
This
Agreement and all Schedules and Exhibits hereto constitute the final complete
expression of the intent and understanding of Buyer and Seller. This Agreement
shall not be altered or modified except by a subsequent 'writing, signed
by
Buyer and Seller.
Section
9.7 Counterparts.
This
Agreement may be executed by fax (if promptly followed by the original) and
in
any number of counterparts, each of which shall constitute one and the same
instrument, and either party hereto may execute this Agreement by signing
any
such counterpart.
Section
9.8 Survival.
Each
and every covenant hereinabove made by the parties to this Agreement shall
survive the Closing, and shall not merge into the Closing Documents, but
instead
shall he independently enforceable for such period.
Section
9.9 Governing
Law.
This
Agreement shall be construed, and the rights and obligations of the Seller
and
the Buyer hereunder determined, in accordance with the law of the State of
New
York.
Section
9.10 Expenses.
Except
as expressly set forth to the contrary in this Agreement, each party hereto
shall be responsible for and bear all of its own respective expenses, including
without limitation, expenses of legal counsel, accountants, and other advisors,
incurred at any time in connection with pursuing or consummating this Agreement
and the transactions contemplated thereby.
-7-
Section
9.11 Brokers.
Each
party to this Agreement represents and warrants to the other that, in connection
with the sale and purchase of the Loan, the party so representing and warranting
has not dealt with any broker, agent or finder, and there is no commission,
charge or other compensation due on account thereof. Buyer and Seller shall
indemnify and hold each other harmless against and from any inaccuracy in
such
representation. The rights, obligations, warranties and representations of
the
parties hereto under the provisions of this Section
9.11
survive
Closing or any termination of this Agreement before Closing.
Section
9.12 Further
Assurances.
Each
party shall provide to the other party such other information regarding the
Loans or the Collateral as the other party may reasonably request, and each
party shall execute and deliver such other documents, deliver such other
items
and take such other actions as may be reasonably requested to allow the
completion and consummation (or termination, as appropriate) of all tasks
and
the transactions contemplated by this Agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first above written.
BUYER:
Mag Multi Corp.
By:
Name:
Title:
SELLER:
International Microcomputer Software, Inc.
By:
Name:
Title:
-8-
EXHIBIT
AFORM OF ASSIGNMENT OF ASSIGNED
RIGHTS AND OBLIGATIONS
This
Assignment and Assumption of Assigned Rights and Obligations is entered into
by
and between International Microcomputer Software, Inc. ("Assignor") and Mag
Multi Corp. ("Assignee").
RECITALS
Assignor
and Assignee entered into that certain Loan Sale Agreement effective January
31,
2005 (the "Loan Sale Agreement").
The
Loan
Sale Agreement provides for the sale and transfer by Assignor to Assignee
of
certain Assigned Rights and Obligations (such term and all other capitalized
terms used herein and not otherwise defined herein have the definitions ascribed
to them in the Loan Sale Agreement).
In
exchange for the Purchase Price set forth in the Loan Sale Agreement and
such
other good and valuable consideration as provided in the Loan Sale Agreement,
Assignor hereby agrees to sell to Assignee the Assigned Rights and Obligations
as set forth in the Loan Sale Agreement and pursuant to the terms, conditions
and provisions hereof.
NOW,
THEREFORE, premises considered:
Assignor
hereby transfers, assigns and conveys all right, title, interest and obligations
in, to and under the Loans and the Loan Documents set forth on Schedule
1
hereto,
including, without limitation, all rights to principal, interest, fees, costs
and expenses payable thereunder after the Closing Date and all other rights
and
claims thereunder.
|
Dated:
January 31, 2005
|
ASSIGNOR:
By:
Its:
ASSIGNEE:
By:
Its:
-9-
SCHEDULE
1
ASSIGNMENT
OF ASSIGNED RIGHTS AND OBLIGATIONS
1. 15%
Promissory Note dated September 18, 2003, evidencing an indebtedness in
the
principal sum of $350,000.00 executed by Digital Creative Development
Corporation (“DCDC”), as payor, in favor of Assignor, as payee, as amended by
that certain Amendment #1 to 15% Promissory Note made as of September 18,
2004;
2. UCC-1
Financing Statement from DCDC to Assignor;
3. Certificate
of DCDC;
4. Pledge
and
Security Agreement dated as of September 18, 2003 by and between DCDC, as
Pledgor, and Assignor, as second party;
5. Assignment
Separate From Certificate dated September 18, 2004, executed by DCDC in favor
of
Assignor;
6. 400,000
shares of the Common Stock of Assignor represented by Certificate ▇▇. ▇▇
▇▇▇▇▇;
7. Assignment
Separate From Certificate dated September 18, 2004 executed by DCDC in favor
of
Assignor; and
8. 304,250
shares of the Preferred Stock of Access Propeller Holdings, Inc. represented
by
Certificate No. PA-4.
-10-