Exhibit 10.1
WAIVER AGREEMENT
WAIVER AGREEMENT (the "AGREEMENT"), dated as of February 2, 2001, by
and among Worldwide Xceed Group, Inc. (f/k/a Xceed Inc.), a Delaware
corporation, with its principal place of business located at 000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, (the "COMPANY"), and the investors listed on the SCHEDULE
OF INVESTORS attached hereto (individually, an "INVESTOR" and collectively, the
"INVESTORS").
WHEREAS:
A. The Company, the Investors and certain other entities (the "OTHER
INVESTORS") have entered into that certain Subscription Agreement, dated as of
January 13, 2000 (the "SUBSCRIPTION AGREEMENT"), pursuant to which each of the
Investors purchased from the Company (or subsequently from other of the
Investors) shares of the Company's Series A Cumulative Convertible Preferred
Stock (the "PREFERRED SHARES") which are convertible into shares (the
"CONVERSION SHARES") of the Company's common stock, par value $0.01 per share
(the "COMMON STOCK"), in accordance with the terms of the Company's Certificate
of Designation, Preferences and Rights of Series A Cumulative Convertible
Preferred Stock filed with the Secretary of State of the State of Delaware on
January 13, 2000 (the "CERTIFICATE OF DESIGNATION") and warrants (the "OLD
WARRANTS") to purchase shares of Common Stock.
B. On April 4, 2000, the Company issued additional warrants,
substantially in the form of the Old Warrants, to certain of the Investors and
the Other Investors (the "ADDITIONAL WARRANTS" and, collectively with the Old
Warrants, the "WARRANTS");
C. The Company and each of the Investors, have entered into that
certain Registration Rights Agreement, dated as of January 13, 2000, (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company agreed to
provide certain registration rights under the Securities Act of 1933, as amended
(the "1933 ACT") and the rules and regulations promulgated thereunder; and
D. Each Investor wishes to limit conversions under the Certificate
of Designations and to waive, upon the terms and conditions stated in this
Agreement, certain rights with respect to, and provisions of, the Certificate of
Designation, the Subscription Agreement and the Registration Rights Agreement.
NOW THEREFORE, the Company and each of the Investors, severally and not
jointly, hereby agree as follows:
1. WAIVER
1.1 WAIVER EFFECTIVENESS DATE. The effectiveness (the
"EFFECTIVENESS") of the waivers, covenants, releases and other
agreements in Sections 5 and 14 shall be on a date which is five
(5) business days after the date hereof or such later date as may
be mutually agreed to in writing by the Company and each of the
Investors (the "EFFECTIVENESS DATE"); provided that all
conditions precedent to the obligations of the Investors and the
Company to the Effectiveness set forth herein shall have been
satisfied or waived in writing. In addition, on the Effectiveness
Date, the Investors shall deliver to the Company and the Company
shall redeem all Warrants held by the Investors for cash in the
aggregate equal to $1.00. Assuming that pursuant to the
Subscription Agreement the Company issued such Investor (or the
purchaser from which such Investor acquired the Warrants) the
Warrants held by such Investor free and clear of any taxes,
security interest, liens, encumbrances, claims and demands of any
kind whatsoever, such Investor shall transfer such Warrants to
the Company, free and clear of any restrictions on transfer,
taxes, security interest, liens, encumbrances and demands of any
kind whatsoever.
1.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AT
EFFECTIVENESS. The obligations of the Company in Sections 5 and
14 are subject to the satisfaction at or before the Effectiveness
of each of the conditions set forth below. Each of these
conditions are for the Company's sole benefit and may be waived
in writing by the Company with respect to any or all Investors at
any time in its sole discretion.
(a) ACCURACY OF THE INVESTORS' REPRESENTATIONS AND WARRANTIES.
The representations and warranties of each Investor shall be
true and correct in all material respects as of the date
when made and in all material respects as of the
Effectiveness Date as though made at each such time.
(b) PERFORMANCE BY THE INVESTORS. Each Investor shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with
by such Investor at or prior to the Effectiveness.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which
prohibits or adversely effects any of the transactions
contemplated by this Agreement, and no proceeding shall have
been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated
hereby and thereby.
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(d) WAIVER BY OTHER INVESTORS. Each of the Other Investors shall
have agreed to limit conversions and waive their rights with
respect to the Subscription Agreement, the Registration
Rights Agreement and the Certificate of Designations (the
"TRANSACTIONS DOCUMENTS") on terms substantially similar to
this Agreement.
(e) OFFICER'S CERTIFICATE. The Company shall have received a
certificate, executed by an authorized signatory of each
Investor, dated as of the Effectiveness Date, to the effect
that the conditions set forth in Sections 1.2(a) and 1.2(b)
above are satisfied.
1.3 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTORS AT
EFFECTIVENESS. The obligations of each of the Investors in
Section 14 are subject to the satisfaction at or before the
Effectiveness of each of the conditions set forth below. Each of
these conditions is for each Investor's sole benefit and may be
waived in writing by each such Investor at any time in its sole
discretion (any such waiver shall have effect only with respect
to the waiving Investor).
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company shall be
true and correct in all material respects as of the date
when made and in all material respects as of the
Effectiveness Date as though made at such time.
(b) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with
by the Company at or prior to the Effectiveness.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which
prohibits or adversely effects any of the transactions
contemplated by this Agreement, and no proceeding shall have
been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated
hereby and thereby.
(d) LEGAL OPINION. The Company shall have delivered to the
Investors an opinion of Xxxx and Xxxx LLP, counsel to the
Company, substantially in the form of EXHIBIT C annexed
hereto, dated the Effectiveness Date.
(e) OFFICER'S CERTIFICATE. Each Investor shall have received a
certificate, executed by the Chief Executive Officer of the
Company, dated as of the
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Effectiveness Date, to the effect that the conditions set
forth in Sections 1.3(a) and 1.3(b) above are satisfied.
(f) RESERVATION OF SHARES. On or prior to the Effectiveness
Date, the Company shall have duly reserved a number of
Conversion Shares equal to the Maximum Conversion Share
Number (as defined in Section 4.1) to be reserved for
issuance upon conversion of the Preferred Shares.
(g) SECRETARY'S CERTIFICATE. The Company shall have delivered to
the Investors a certificate in form and substance reasonably
satisfactory to each Investor, executed by the secretary of
the Company, certifying as to the truth and accuracy of the
certificate of incorporation of the Company (the
"CERTIFICATE OF INCORPORATION"), as in effect on the
Effectiveness Date, the Bylaws of the Company, as in effect
on the Effectiveness Date, and the resolutions duly adopted
by the Board of Directors authorizing and approving the
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
(h) GOOD STANDING. On or prior to the Effectiveness Date, the
Company shall have delivered to the Investors a long-form
certificate of good standing and tax status of the Company,
certified as of a recent date by the Secretary of State of
the State of Delaware.
2. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor, with respect only to itself, represents and warrants to
the Company that:
2.1 AUTHORITY. This Agreement has been duly authorized and
validly executed and delivered by the Investor and is a legal,
valid and binding obligation of the Investor, enforceable against
the Investor in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws relating to, or affecting generally
the enforcement of, creditors' rights and remedies or by other
equitable principles of general application.
2.2 NO BROKERS. The Investor has taken no action which would
give rise to any claim by any person for brokerage commissions,
finder's fees or similar payments by the Company relating to this
Agreement or the transactions contemplated hereby.
2.3 OWNERSHIP OF PREFERRED SHARES AND WARRANTS. The Investor is
the sole record and beneficial owner of the number of Preferred
Shares and Warrants set forth opposite such Investor's name on
the SCHEDULE OF INVESTORS.
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3. REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to each Investor that:
3.1 EXCHANGE ACT FILINGS. The Company has registered its Common
Stock pursuant to Section 12(b) or 12(g) of the Exchange Act and
is in full compliance with all reporting requirements of the
Exchange Act.
3.2 VALID ISSUANCE OF CAPITAL STOCK.
(a) The Company has an authorized capitalization consisting of
100,000,000 shares of Common Stock and 1,000,000 shares of
preferred stock, par value $0.05 per share. The Company has
issued and outstanding on the date hereof 48,299,054 shares
of Common Stock, of which 20,000 shares are held in
treasury, and 23,115 shares of Series A Preferred Stock. As
of the date hereof, the Company has outstanding the
following securities convertible into (other than its Series
A Preferred Stock) or exercisable or exchangeable for Common
Stock (the "DERIVATIVE SECURITIES"): (i) options to purchase
8,204,861 shares of Common Stock; and (ii) other than the
Warrants, warrants to purchase 4,726,562 shares of Common
Stock.
(b) All of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are
fully paid and non-assessable. Upon conversion of the
Preferred Shares, in accordance with its terms, the
Conversion Shares will be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof, with the holders
thereof being entitled to all rights accorded to holders of
Common Stock. The holders of outstanding shares of capital
stock of the Company are not and shall not be entitled to
preemptive or other rights afforded by the Company to
subscribe for the capital stock or other securities of the
Company as a result of the issuance of Conversion Shares
upon the conversion or exercise thereof.
(c) Other than as set forth in Section 3.2(a) and options and
shares that may be issued pursuant to the Company's stock
option plans as in effect on the date hereof: (i) no shares
of the Company's capital stock are subject to preemptive
rights or any other similar rights or any liens or
encumbrances created or imposed by the Company other than
issued and outstanding shares of Common Stock held in escrow
in connections with the Company's acquisition of each of
Catalyst Consulting Services, Inc., Distributed Systems
Solutions, Inc. and Big Theory LLC; (ii) there are no
outstanding debt securities issued by the Company which are
convertible into Common Stock; (iii) there are no
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outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any
shares of capital stock of the Company (or any subsidiary of
the Company (each hereinafter referred to as a "SUBSIDIARY"
and collectively, the "SUBSIDIARIES"), or contracts,
commitments, understandings or arrangements by which the
Company or any Subsidiary is or may become bound to issue
additional shares of capital stock of the Company or any
Subsidiary or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any Subsidiary
other than shares that may be issuable in connection with
the acquisition of the Company's subsidiary, Pulse
Interactive B.V., based on financial performance; (iv) there
are no agreements or arrangements under which the Company
(or any Subsidiary) has any outstanding obligation to
register the sale of any of their securities under the 1933
Act (except the Registration Rights Agreement, the
registration rights agreement among the Company and certain
shareholders of Zabit & Associates, Inc., the Subscription
Agreement between the Company and Spherion Corporation dated
as of April 27, 2000, the Warrant Agreement between the
Company and Spherion Corporation dated as of November 15,
2000, the Warrant issued to Hilton Hotels Corporation dated
as of October 6, 2000 and pursuant to certain employee stock
option agreements); (v) there are no outstanding securities
of the Company or any Subsidiary which contain any
redemption or similar provisions, and there are no
contracts, commitments, understandings or arrangements by
which the Company or any Subsidiary is or may become bound
to redeem a security of the Company or any Subsidiary; (vi)
there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered
by the issuance of the Conversion Shares as described in
this Agreement; and (vii) the Company does not have any
stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement.
(d) All of the authorized shares of capital stock of each
Subsidiary are owned by the Company, free and clear of any
lien, charge, security interest, encumbrance, adverse claim
or other restriction, and all the issued and outstanding
shares of capital stock of the Subsidiaries are validly
issued and are fully paid, non-assessable and free of
preemptive and similar rights. Except as otherwise set forth
in this Section 3.3 hereto, there are no outstanding
agreements or commitments requiring the Company or any
Subsidiary to issue capital stock or Derivative Securities.
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3.3 ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate
power to own its properties and assets and to carry on its
business as now being conducted. Each Subsidiary is a corporation
duly organized, validly existing and in good standing under the
laws of its respective state of organization, with the requisite
corporate power to own its properties and assets and to carry on
its business as now being conducted. The Company and each
Subsidiary is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which
the nature of the business conducted or property owned by it
makes such qualification necessary other than those jurisdictions
in which the failure so to qualify would not have a Material
Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material
adverse effect on the business, operations, properties, cash
flows, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole and any condition
or situation which would prohibit or otherwise materially
adversely interfere with the ability of the Company to enter into
and perform its obligations under the Transaction Documents.
3.4 AUTHORIZATION; ENFORCEMENT. (a) The Company has the
requisite corporate power and authority to enter into and perform
this Agreement, to issue the Conversion Shares in accordance with
the terms hereof and to perform its obligations under the
Certificate of Designation and its Certificate of Incorporation;
(b) the execution and delivery of this Agreement and the
consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action, and no further consent or authorization of the Company or
its Board of Directors or stockholders is required; (c) this
Agreement has been duly executed and delivered by the Company;
and (d) this Agreement constitutes legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with its terms.
3.5 NO BROKERS. The Company has not taken any action which would
give rise to a claim by any person for brokerage commissions,
finder's fees or similar payments by any Investor relating to
this Agreement or the transactions contemplated hereby.
3.6 NO CONFLICTS. The execution, delivery and performance of
this Agreement and consummation of the transactions contemplated
hereby (including the conversion of the Preferred Shares and the
issuance of the Conversion Shares upon conversion of the
Preferred Shares) do not and will not: (i) result in a violation
of the Certificate of Incorporation, as in effect on the date
hereof, and the Company's Bylaws, as in effect on the date hereof
(the Certificate of Incorporation and the Company's Bylaws are
collectively referred to herein as the "CHARTER DOCUMENTS"); or
(ii) result in the creation of any lien, charge, security
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interest or encumbrance upon any of the assets of the Company or
any Subsidiary pursuant to the terms or provisions of or,
conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture, credit facility or
instrument to which the Company or any Subsidiary is a party, or
result in a violation of any federal, state, local or foreign
law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations) applicable to
the Company or any Subsidiary or by which any property or asset
of the Company or any Subsidiary is bound or affected, except, in
the case of clause (ii) for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a
Material Adverse Effect. The Company is not required under
federal, state or local law, rule or regulation in the United
States to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental or
self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance
with the terms hereof .
3.7 EXCHANGE ACT REPORTS. The Company has filed all reports
required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, since August 31, 1995
(the foregoing materials being collectively referred to herein as
the "EXCHANGE ACT REPORTS"). Except for this Agreement and
similar transactions between the Company and the Other Investors,
which information will be publicly disclosed by the Company on or
before 8:30 a.m. Eastern Time, on the second business day
following the date of execution of this Agreement, but not later
than the Company's first public announcement of the execution of
this Agreement or the transactions contemplated by this
Agreement, by means of the filing of a Form 8-K pursuant to
Section 5.2 hereof, the Company has not provided to the Investors
any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company
but which has not been so disclosed. As of their respective
dates, the Exchange Act Reports complied in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder and other
applicable federal, state and local laws, rules and regulations,
and none of the Exchange Act Reports contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The Company has filed (including
filing such documents by incorporation by reference) all
agreements or documents to which the Company is a party that are
required to be filed as exhibits to the Exchange Act Reports.
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3.8 EFFECTIVENESS OF SEC FILINGS. The SEC has not issued any
stop order or other order suspending the effectiveness of any
registration statement filed by the Company or the Subsidiary
under the Exchange Act or the 0000 Xxx.
3.9 COMPLIANCE WITH INSTRUMENTS, ETC. The Company (or the manner
in which it conducts its business) is not in breach or violation
of, or in default under, any term or provision of its Charter
Documents.
4. COVENANTS OF EACH INVESTOR
4.1 CONVERSION OF PREFERRED SHARES. The Investors shall not
submit conversion notices for, and the Company shall not have the
obligation to issue shares of Common Stock for the conversion of,
Preferred Shares in excess of that number of Preferred Shares
which, in the aggregate, would result in the issuance of more
than 8,500,000 shares of Common Stock (the "MAXIMUM CONVERSION
SHARE NUMBER"); provided, however, that this limitation shall not
apply in the event that the Effectiveness shall not have occurred
on or before the date which is five (5) business days after the
date of this Agreement (or such later date as mutually agreed in
writing by the Company and each of the Investors). The Investors
shall not transfer any of the Preferred Shares or Warrants or any
rights in the Preferred Shares or Warrants to any person or
entity unless such transferee shall first have agreed in writing
to be bound by the provisions of this Agreement as if such
transferee were a party hereto and any assignment in violation of
this sentence shall be null and void. If the Company shall at any
time subdivide (by stock split, stock dividend, recapitalization
or otherwise) or combine (by reverse stock split, recombination
or otherwise) its outstanding shares of Common Stock into a
greater or lesser number of shares, the Maximum Conversion Share
Number in effect immediately prior to such subdivision or
combination shall be proportionately adjusted to reflect such
subdivision or combination, as the case may be. Upon delivery by
the Company to the Investors of an aggregate of number of shares
of Common Stock equal to the Maximum Conversion Share Number upon
conversion of Preferred Shares by Investors after the date of
this Agreement and in the event that he Effectiveness shall have
occurred on or before the date which is five (5) business days
after the date of this Agreement (or such later date as mutually
agreed in writing by the Company and each of the Investors), each
Investor shall promptly deliver to the Company all stock
certificates representing the remaining Preferred Shares (the
"REMAINING PREFERRED SHARES"). Assuming that pursuant to the
Subscription Agreement the Company issued such Investor (or the
purchaser from which the Investor acquired the Remaining
Preferred Shares) the Remaining Preferred Shared held by such
Investor free and clear of any taxes, security interest, liens,
encumbrances, claims or demands of any kind whatsoever, at the
time the Remaining Preferred Shares are delivered to the Company
pursuant to this Section 4.1, such Investor shall
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hold the Remaining Preferred Shares, and shall transfer such
Remaining Preferred Shares, duly endorsed in blank, to the
Company, free and clear of any restrictions on transfer, taxes,
security interest, liens, encumbrances and demands of any kind
whatsoever.
5. COVENANTS OF THE COMPANY
5.1 EXCHANGE ACT REGISTRATION. The Company will use its best
efforts: (a) to cause its Common Stock to continue to be
registered under Section 12(b) or 12(g) of the Exchange Act; (b)
to comply in all material respects with its reporting and filing
obligations under the Exchange Act; and (c) not to take any
action or file any document (whether or not permitted by the
Exchange Act or the rules and regulations thereunder) to
terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under the Exchange Act.
5.2 FILING OF CURRENT REPORT ON FORM 8-K. On or before
8:30 a.m., Eastern Time, on the second business day following the
date of execution of this Agreement, but not later than the
Company's first public announcement of the execution of this
Agreement or the transactions contemplated by this Agreement, the
Company shall file with the SEC a Current Report on Form 8-K in a
form reasonably acceptable to the Investors describing the terms
of this Agreement, including, without limitation, by including as
exhibits to such Form 8-K this Agreement. In addition, on or
before 8:30 a.m., Eastern Time on the second business day
following the Effectiveness Date, but not later than the
Company's first public announcement thereof, the Company shall
file with the SEC a Current Report on Form 8-K in a form
reasonably acceptable to the Investors describing the terms of
the transaction consummated at the Effectiveness or that the
Effectiveness did not occur, as the case may be.
5.3 EXPENSES; FEES. Subject to Section 8 below, at the
Effectiveness, the Company shall pay a nonacountable expense
allowance of $1,730 to HFTP Investment L.L.C. (an Investor) or
its designee(s) and $50,270 to Gaia Offshore Master Fund, Ltd.
(an Investor) or its designee(s), by wire transfer of immediately
available funds in accordance with each such Investor's written
wire instructions.
6. PAYMENT SET ASIDE
To the extent that the Company makes a payment or payments to any
Investor hereunder or pursuant to the Subscription Agreement, Registration
Rights Agreement or the Certificate of Designation or any Investor enforces or
exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a
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trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action) by the court of competent jurisdiction in a final
non-appealable judgment, then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force or effect as if such payment had not been made or
such enforcement or set-off had not occurred.
7. WAIVER OF CERTAIN RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT
Provided that the Effectiveness Date occurs on or before the date which
is five (5) business days after the date of this Agreement (or such later date
as may be mutually agreed in writing by the Company and each Investor), each
Investor severally waives any right it may have (i) to receive any payments
pursuant to Section 2(c) of the Registration Rights Agreement and (ii) to
receive a reduction in the Conversion Price (as defined in the Certificate of
Designations) of the Preferred Shares in the event of an Excess Blocking Period
(as defined in the Registration Rights Agreement) pursuant to Section 5A(b) of
the Registration Rights Agreement. Notwithstanding the foregoing, the waiver
contained in this Section 7 shall be void and of no further force or effect on
or after the first date after the Effectiveness Date on which there occurs a
Conversion Default (as defined below).
For purposes of this Agreement, a "CONVERSION DEFAULT" shall be deemed
to have occurred in the event that the Company (1) notifies an Investor directly
in writing or pursuant to a public disclosure, including but not limited to a
press release, that the Company cannot or does not intent to issue shares of
Common Stock upon conversion of the Preferred Shares tendered in accordance with
the Certificate of Designation; or (2) fails to issue shares of Common Stock for
any reason to an Investor prior to the tenth (10th) business day after the date
of receipt by the Company of a Conversion Notice (as defined in the Certificate
of Designation) delivered by an Investor in accordance with the Series A
Certificate of Incorporation or, in the case of a Merger Conversion Election
Conversion pursuant to Section 10 on the Merger Transaction Closing Date,
including, without limitation, because the Company (x) does not have a
sufficient number of shares of Common Stock or other securities authorized and
available or (y) is otherwise prohibited by applicable law or by the rules and
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Company or its
securities from issuing all of the Common Stock which is to be issued to an
Investor.
8. WAIVER OF CERTAIN RIGHTS UNDER THE CERTIFICATE OF DESIGNATIONS
8.1 RIGHTS TO DIVIDENDS AND OTHER DISTRIBUTIONS. Provided that
the Effectiveness Date occurs on or before the date which is five
(5) business days after the date of this Agreement (or such later
date as may be mutually agreed in writing by the Company and each
Investor), each Investor severally agrees to waive its right (a)
to receive dividends on the Preferred Shares pursuant to Section
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2 of the Certificate of Designation and (b) to any adjustment for
dividends and other distributions pursuant to Section 9(c) of the
Certificate of Designation; provided, however, that each Investor
who holds Preferred Shares shall be entitled to any dividends or
other distributions by the Company to the same extent as if such
Investor had converted its Preferred Shares into Common Stock
(except as may be limited by Section 4.1) on the record date for
such dividend or other distribution, and payments thereof shall
be made concurrently with the dividend or other distribution to
the holders of Common Stock. Notwithstanding the foregoing, the
waiver contained in this Section 8.1 shall be void and of no
further force or effect on and after the first day after the
Effectiveness Date on which there occurs a Conversion Default.
8.2 RIGHTS TO PREVENT THE ISSUANCE OF PARITY SECURITIES.
Provided that the Effectiveness Date occurs on or before the date
which is five (5) business days after the date of this Agreement
(or such later date as may be mutually agreed in writing by the
Company and each Investor), each Investor severally agrees to
waive its right to prevent the issuance of (a) any Parity
Securities (as defined in the Certificate of Designations) or (b)
any capital stock that ranks senior to the Preferred Shares in
respect of dividends, each as provided in clause (iii) of Section
3(b) of the Certificate of Designation. Notwithstanding the
foregoing, the waiver contained in this Section 8.2 shall be void
and of no further force or effect on or after the first date
after the Effectiveness Date on which there occurs a Conversion
Default.
8.3 RIGHTS TO REDEMPTION UPON AN EXTRAORDINARY TRANSACTION.
Provided that the Effectiveness Date occurs on or before the date
which is five (5) business days after the date of this Agreement
(or such later date as may be mutually agreed in writing by the
Company and each Investor), each Investor severally agrees not to
exercise its right to (a) redeem the Preferred Shares pursuant to
Section 5(a) of the Certificate of Designation as of the
effective date of an Extraordinary Transaction (as defined in
Section 4 of the Certificate of Designation), except with respect
to an Extraordinary Transaction described in clause (i) of
Section 4 of the Certificate of Designation or (b) an adjustment
of the Ceiling Price (as defined in the Certificate of
Designation) pursuant to clause (iii) of Section 5(d) of the
Certificate of Designation; provided, however, that no Investor
shall have the right to require the redemption of the Preferred
Shares if, with respect to such Extraordinary Transaction, the
Company has delivered a Notice of Merger Conversion in accordance
with Section 10 and complies with its obligations under Section
10. Notwithstanding the foregoing, the waiver contained in this
Section 8.3 shall be void and of no further force or effect on
and after the first date after the Effectiveness Date on which
there occurs a Conversion Default.
8.4 RIGHTS TO ADJUSTMENT UPON THE ISSUANCE OF DERIVATIVE
SECURITIES.
12
Provided that the Effectiveness Date occurs on or before the date
which is five (5) business days after the date of this Agreement
(or such later date as may be mutually agreed in writing by the
Company and each Investor), each Investor severally agrees not to
exercise its right to adjust the Conversion Period or Conversion
Price (each as defined in the Certificate of Designation) of the
Preferred Shares upon the issuance of Derivative Securities (as
defined in the Certificate of Designation), as set forth in
Section 9(c) of the Certificate of Designation. Notwithstanding
the foregoing, the waiver contained in this Section 8.4 shall be
void and of no further force or effect on and after the first
date after the Effectiveness Date on which there occurs a
Conversion Default.
8.5 RIGHTS TO PENALTIES UNDER SECTION 11 OF THE CERTIFICATE OF
DESIGNATION. Provided that the Effectiveness Date occurs on or
before the date which is five (5) business days after the date of
this Agreement (or such later date as may be mutually agreed in
writing by the Company and each Investor), each Investor
severally agrees not to exercise its right to redeem its
Preferred Shares or receive penalties pursuant to Section 11(c)
or Section 11(d) of the Certificate of Designation.
Notwithstanding the foregoing, the waiver contained in the
immediate preceding sentence of this Section 8.5 shall be void
and of no further force or effect on and after the first date
after the Effectiveness Date on which there occurs a Conversion
Default. Provided that the Effectiveness Date occurs on or before
the date which is five (5) business days after the date of this
Agreement (or such later date as may be mutually agreed in
writing by the Company and each Investor), the Company waives
each Investors compliance with the last sentence of Section 11(b)
of the Certificate of Designation.
8.6 RIGHTS TO EXTEND THE MATURITY DATE UPON SUSPENSION OF
REGISTRATION STATEMENT. Provided that the Effectiveness Date
occurs on or before the date which is five (5) business days
after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and each Investor),
each Investor severally agrees not to exercise its right to
extend the Maturity Date (as defined in the Certificate of
Designation) of the Preferred Shares as provided in Section 17 of
the Certificate of Designation. Notwithstanding the foregoing,
the waiver contained in this Section 8.6 shall be void and of no
further force or effect on and after the first date after the
Effectiveness Date on which there occurs a Conversion Default.
8.7 RIGHT UPON A TRIGGERING EVENT. Provided that the
Effectiveness Date occurs on or before the date which is five (5)
business days after the date of this Agreement (or such later
date as may be mutually agreed in writing by the Company and each
Investor), each Investor severally (i) agrees not to exercise its
right to redeem its Preferred Shares pursuant to Section 5(b)
upon the occurrence of a Triggering Event (as defined in the
Certificate of Designation), except with
13
respect to a Triggering Event described in clause (c) or clause
(e) of the definition of "Triggering Event" in Section 19 of the
Certificate of Designation with respect to which such Investor
has complied with Section 4.1 of this Agreement, and (ii) waives
its right to receive any adjustment pursuant to the last sentence
of Section 5(b) of the Certificate of Designation.
Notwithstanding the foregoing, the waiver contained this Section
8.7 shall be void and of no further force or effect on and after
the first date after the Effectiveness Date on which there occurs
a Conversion Default.
8.8 RIGHT TO REQUEST ISSUANCE OF SHARES IN ELECTRONIC
FORMAT (I.E., DWAC). Provided that the Effectiveness Date occurs
on or before the date which is five (5) business days after the
date of this Agreement (or such later date as may be mutually
agreed in writing by the Company and each Investor), each
Investor severally agrees to waive its right to request that
shares be issued in electronic format (i.e., DWAC) upon the
conversion of Preferred Shares in the event that the Company's
transfer agent does not offer or does not promptly make available
service for such electronic delivery of shares. If an Investor
requests that the Company cause shares to be issued in electronic
format (i.e., DWAC), then the delivery of the Conversion Notice
(as defined in the Certificate of Designation) shall be deemed to
be a representation by the Investor that it has complied with
Section 4.1. Notwithstanding the foregoing, the waiver contained
in this Section 8.8 shall be void and of no further force or
effect on and after the first date after the Effectiveness Date
on which there occurs a Conversion Default
9. WAIVER OF CERTAIN RIGHTS UNDER THE SUBSCRIPTION AGREEMENT
Provided that the Effectiveness Date occurs on or before the date which
is five (5) business days after the date of this Agreement (or such later date
as may be mutually agreed in writing by the Company and each Investor), each
Investor severally (i) agrees not to exercise its right to prevent the Company
from declaring a dividend or other distribution as provided in Section 5.10 of
the Subscription Agreement , (ii) agrees to waive the Company's compliance with
Sections 5.1 and 5.2 of the Subscription Agreement , but solely with respect to
the number of shares in excess of the number of shares of Common Stock the
Investors are entitled to receive upon conversion of the Preferred Shares in
accordance with Section 4.1 of this Agreement, and (iii) agrees to waive the
Company's compliance with Sections 5.5 and 5.9 of the Subscription Agreement.
Notwithstanding the foregoing, the waiver contained in this Section 9 shall be
void and of no further force or effect on and after the first date after the
Effectiveness Date on which there occurs a Conversion Default.
10. AGREEMENT WITH RESPECT TO MANDATORY CONVERSION OF THE PREFERRED SHARES
14
ACCELERATION OF MANDATORY CONVERSION UPON MERGER TRANSACTION COMPANY'S
OPTION. Provided that the Effectiveness Date has occurred on or prior to the
date which is five (5) business days after the date of this Agreement (or such
later date as may be mutually agreed in writing by the Company and each
Investor), at any time on or after the date the Company discloses a pending,
proposed or intended Merger Transaction (as defined below), the Company shall
have the right, in its sole discretion, to require that each Investor, but not
less than all of the Investors, convert its Preferred Shares up to the
limitation set forth in Section 4.1 ("MERGER CONVERSION ELECTION"); provided
that the Conditions to Merger Conversion (set forth below) are satisfied or
waived by all of the Investors. The Company shall exercise its right to make a
Merger Conversion Election by providing each Investor written notice ("NOTICE OF
MERGER CONVERSION") by facsimile and overnight courier, after the public
disclosure of such proposed, pending or intended Merger Transaction and at least
25 trading days prior to the date of consummation of the Merger Transaction
("MERGER TRANSACTION CLOSING DATE"). The Notice of Merger Conversion shall state
the anticipated Merger Transaction Closing Date. If the Company makes a Merger
Conversion Election in compliance with this Section 10.1 and the Conditions to
Merger Conversion are satisfied or waived by all of the Investors, except to the
extent restricted by Section 15 of the Certificate of Designation or Section 4.1
of this Agreement, on the Merger Transaction Closing Date each Investor will be
deemed to have submitted a Conversion Notice (as defined in the Certificate of
Designation) in accordance with Section 6 of the Certificate of Designation for
a number of Preferred Shares equal to the lesser of (I) all the Preferred Shares
held by such Investor which remain outstanding on such date, and (II) the
maximum number of Preferred Shares which such holder could convert on the Merger
Transaction Closing Date taking into account the restrictions in Section 15 of
the Certificate of Designation and Section 4.1 of this Agreement. All Investors
shall promptly after the Merger Transaction Closing Date surrender all stock
certificates representing the Preferred Shares, duly endorsed for cancellation,
to the Company. If the Company fails to provide Conversion Shares with respect
to any Preferred Shares in accordance with Section 6 of the Certificate of
Designation, then the Merger Conversion Election shall be null and void with
respect to such Preferred Shares and the holder of such Preferred Shares shall
be entitled to all the rights of a holder of outstanding Preferred Shares set
forth in this Certificate of Designations. "CONDITIONS TO MERGER CONVERSION"
shall mean the following conditions: (i) on each day during the period beginning
on and including the date the Company delivers a Notice of Merger Conversion and
ending on and including the Merger Transaction Closing Date, the Registration
Statement (as defined in each Registration Rights Agreement) is effective and
available for the sale of all the Registrable Securities (as defined in each
Registration Rights Agreement) (subject to the limitation in Section 4.1 of this
Agreement) or all the shares of Common Stock issuable upon conversion of the
Preferred Shares (subject to the limitation in Section 4.1 of this Agreement)
then outstanding are immediately available for resale by each Investor pursuant
to Rule 144(k) under the 1933 Act; (ii) during the period beginning on the date
on which the Company delivers a Notice of Merger Conversion and ending on and
including the Merger Transaction Closing Date, there shall not have occurred an
event constituting a Conversion Default; (iii) during the period beginning on
the date on which the Company delivers a Notice of Merger Conversion and ending
on and including the Merger Transaction Closing Date, the Company shall have
delivered
15
the required number of shares of Common Stock (as set forth in Section 6 of the
Certificate of Designation) upon conversion of Preferred Shares (subject to the
limitation set forth in Section 4.1 of this Agreement) to each Investor within
five (5) business days after the Company's receipt of any Conversion Notice and,
if required by Section 6(b)(iii) of the Certificate of Designation,
certificate(s) evidencing the Preferred Shares being converted, or after receipt
of the affidavit, agreement and indemnification as set forth in Section 17 of
the Certificate of Designation; (iv) the Company shall have delivered notice of
the conversion to the Other Investors of their Preferred Shares on terms and
conditions substantially similar to those contained in this Section 10; and (v)
the Company has satisfied all of the conditions to the conversions with the
Other Investors, as set forth in the Company's agreements with such Investors,
which conditions shall be substantially similar to those in this Section 10.
Notwithstanding the above, any Investor may convert its Preferred Shares
(including Preferred Shares selected for conversion), subject to the limitation
set forth in Section 4.1 of this Agreement, into Common Stock pursuant to
Section 6 of the Certificate of Designation on or prior to the date immediately
preceding the Merger Transaction Closing Date. For purposes of this agreement
"MERGER TRANSACTION" shall mean any merger, consolidation or other business
combination of the Company, with or into any other corporation, entity or person
(whether or not the Company is the surviving corporation) or there occurs any
other corporate reorganization or transaction or series of related transactions,
and as a result thereof the shareholders of the Company pursuant to such merger,
consolidation, reorganization or other transaction own in the aggregate less
than 50% of the voting power and common equity of the ultimate parent
corporation or other entity surviving or resulting from such merger,
consolidation, reorganization or other transaction.
11. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law or choice of law, except for matters arising under the 1933
Act or the Exchange Act which matters shall be construed and interpreted in
accordance with such laws. The Company and the Investors hereby agrees that all
actions or proceedings arising directly or indirectly from or in connection with
this Agreement shall be litigated only in the state or federal courts located in
the City of Wilmington, County of New Castle, State of Delaware. The Company and
each Investor consents to the jurisdiction and venue of the foregoing courts and
consent that any process or notice of motion or other application to either of
said courts or a judge thereof may be served inside or outside the State of
Delaware by registered mail, return receipt requested, directed to the such
party at its address set forth in this Agreement (and service so made shall be
deemed complete five (5) days after the same has been posted as aforesaid) or by
personal service or in such other manner as may be permissible under the rules
of said courts. The parties hereto hereby waive any right to a trial by jury in
connection with any litigation pursuant to this Agreement and the transactions
contemplated hereby.
12. ASSIGNMENT; ENTIRE AGREEMENT; AMENDMENT
16
12.1 ASSIGNMENT. Neither this Agreement nor any rights hereunder
may be assigned by either party without the prior written consent
of the other party hereto; provided, however, that the Company
may assign its rights and obligations under this Agreement in
connection with a transaction described in Section 4(i) of the
Certificate of Designation and any Investor may assign its rights
under this Agreement to an affiliate of such Investor who agrees
to be bound by the terms hereof. To the extent that any party
assigns this Agreement with the prior written consent of the
other or any Investor assigns this Agreement as permitted herein
to an affiliate of such Investor, the provisions of this
Agreement, the Subscription Agreement, the Certificate of
Designation and the Registration Rights Agreement shall inure to
the benefit of, be binding upon, and be enforceable by and
against any such assignee. Notwithstanding anything to the
contrary contained herein or any other Transaction Document, any
Investor shall be entitled to pledge the Securities in connection
with a bona fide margin account or other loan secured by the
Securities.
12.2 Except for the Subscription Agreement, the Registration
Rights Agreement and the Certificate of Designation, this
Agreement supersedes all other prior oral or written agreements
between the Investors, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed
herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to
the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor
any Investor makes any representation, warranty, covenant or
undertaking with respect to such matters.
12.3 No provision of this Agreement may be amended other than by
an instrument in writing signed by the Company and the Investors
which hold at least a majority of the Preferred Shares then held
by Investors, and no provision hereof may be waived other than by
an instrument in writing signed by the party against whom
enforcement is sought. No such amendment shall be effective to
the extent that it applies to less than all of the holders of the
Preferred Shares then outstanding.
12.4 The Company has not, directly or indirectly, made any
agreements with any Investors relating to the terms or conditions
of the transactions contemplated by this Agreement except as set
forth in this Agreement.
13. PUBLICITY
The Company and the Investors shall consult with each other in issuing
any press releases or otherwise making public statements with respect to the
transactions contemplated hereby and no party shall issue any such press release
or otherwise make any such public statement without
17
the prior written consent of the others, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law or applicable law, to the extent a party
determines in good faith that it is legally obligated to do so, in which such
case the disclosing party shall provide the other parties with prior notice of
such public statement. The Company shall not publicly or otherwise disclose the
names of any of the Investors without each such Investor's prior written consent
unless otherwise required by law, in which case the Company shall inform such
Investor of such disclosure in writing prior to making such disclosure.
14. MUTUAL GENERAL RELEASE
14.1 In consideration of the Company entering into this Agreement
and the release set forth in Section 14.2, effective as of the
Effectiveness (the "EFFECTIVE TIME") each Investor, severally and
not jointly, on behalf of itself and its heirs, executors,
administrators, devisees, trustees, partners, directors,
officers, shareholders, employees, consultants, representatives,
predecessors, principals, agents, parents, associates,
affiliates, subsidiaries, attorneys, accountants, successors,
successors-in-interest and assignees (collectively, the "INVESTOR
RELEASING PERSONS"), hereby waives and releases, to the fullest
extent permitted by law, but subject to Section 14.3 below, any
and all claims, rights and causes of action, whether known or
unknown (collectively, the "INVESTOR CLAIMS"), that any of the
Investor Releasing Persons had or currently has as of the
Effective Time against (i) the Company, (ii) any of the Company's
current or former parents, shareholders, affiliates,
subsidiaries, predecessors or assigns, or (iii) any of the
Company's or such other persons' or entities' current or former
officers, directors, employees, agents, principals, investors,
signatories, advisors, consultants, spouses, heirs, estates,
executors, attorneys, auditors and associates and members of
their immediate families other than any attorney or law firm that
delivered an opinion in connection with the Closing (as defined
in the Subscription Agreement) (collectively, the "COMPANY
RELEASED PERSONS"), including, without limitation, Investor
Claims arising out of or relating to the Subscription Agreement,
the Registration Rights Agreement, the Warrants and the
Certificate of Designation (collectively, the "RELEASED
DOCUMENTS").
14.2 In further consideration of the Investors entering into this
Agreement and the release set forth in Section 14.1, effective as
of the Effective Time, the Company on behalf of itself and its
heirs, executors, administrators, devisees, trustees, partners,
directors, officers, shareholders, employees, consultants,
representatives, predecessors, principals, agents, parents,
associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively,
the "COMPANY RELEASING PERSONS"), hereby waives and releases, to
the fullest extent permitted by law, but subject to Section 14.3
below, any and all claims, rights and causes of action, whether
known or unknown
18
(collectively, the "COMPANY CLAIMS"), that any of the Company
Releasing Persons had or currently has as of the Effective Time
against (i) the Investors, (ii) any of the Investors' respective
current or former parents, shareholders, affiliates,
subsidiaries, predecessors or assigns, or (iii) any of the
Investors' or such other persons' or entities' current or former
officers, directors, employees, agents, principals, investors,
signatories, advisors, consultants, spouses, heirs, estates,
executors, attorneys, auditors and associates and members of
their immediate families (collectively, the "INVESTOR RELEASED
PERSONS"), including, without limitation, any Company Claims
arising out of or relating to the Released Documents.
14.3 The Company and each of the Investors acknowledge that each
of the releases set forth in Sections 14.1 and 14.2 above does
not affect (a) any claim which any Company Releasing Person or
Investor Releasing Person may have under this Agreement and
Section 6 or Section 7 of the Registration Rights Agreement; (b)
any claim which any Company Releasing Person may have under
Section 4.1 of the Subscription Agreement; (c) any claim which an
Investor Releasing Person may have with respect to (i) Section 6A
of the Subscription Agreement, (ii) any breach by the Company of
any of its representations and warranties set forth in any of
Sections 3.3, 3.4(a), 3.4(b), 3.5, 3.7 or 3.14 or the first
sentence of Section 3.9 of the Subscription Agreement or (iii)
Section 10.3 of the Subscription Agreement with respect to the
matters described in the immediately preceding clauses (i) and
(ii); (d) subject to waivers contained in Sections 7, 8 and 9,
any continuing or future obligation under the Certificate of
Designation, Registration Rights Agreement and the following
Sections of the Subscription Agreement: 5, 6, 6A, 7, 8, 9, 10.1,
12 and 13; and (e) any matter set forth in the Acknowledgement
Letter, dated as of the date of this Agreement, delivered by the
Chief Executive Officer of the Company to each Investor.
15. TERMINATION
In the event that the Effectiveness shall not have occurred with
respect to an Investor on or before the date which is five (5) business days
after the date of this Agreement (or such later date as may be mutually agreed
in writing by the Company and each Investor) (the "TERMINATION DATE") due to the
Company's or such Investor's failure to satisfy the conditions set forth in
Sections 1.1, 1.2 and 1.3 above (and the nonbreaching party's failure to waive
such unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section
15, the Company shall remain obligated to reimburse HFTP Investment L.L.C. and
Gaia Offshore Master Fund, Ltd. (provided that each is not a breaching party)
for the expenses described in Section 5.3 above. Subject to the terms and
conditions of this Agreement, each of the Company and the Investors will use its
best efforts to take, or cause to be taken, all
19
actions and to do, or cause to be done, all things necessary or desirable to
satisfy the conditions to the other party's obligation to cause the
Effectiveness to occur on or before the Termination Date.
16. NOTICES, ETC.; INDEMNITY
16.1 NOTICES. Any notice, demand or request required or permitted
to be given by either the Company or the Investors pursuant to
the terms of this Agreement shall be in writing and will be
deemed to have been delivered (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) upon
delivery by a nationally recognized delivery service, in each
case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:
If to the Company:
Worldwide Xceed Group, Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx,
Chief Legal Officer
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx
If to an Investor, to it at the address and facsimile number
set forth on the Schedule of Investors, with copies to Investor's
representatives as set forth on the Schedule of Investors, or at
such other address and/or facsimile number and/or to the
attention of such other person as the recipient party has
specified by written notice given to each other party five days
prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent,
waiver or other communications, (B) mechanically or
electronically generated by the sender's facsimile machine
containing the time, date, recipient
20
facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause
(i), (ii) or (iii) above, respectively.
16.2 INDEMNIFICATION. Each party shall indemnify the other
against any loss, cost or damages (including reasonable
attorney's fees and expenses) incurred as a result of such
parties' breach of any representation, warranty, covenant or
agreement in this Agreement.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
18. SURVIVAL; SEVERABILITY
The representations, warranties, covenants and agreements of the
parties hereto shall survive the Effectiveness notwithstanding any due diligence
investigation conducted by or on behalf of the Investors. In the event that any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force or effect without said provision; provided that no such
severability shall be effective if it materially changes the economic benefit of
this Agreement to any party.
19. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
[Remainder of Page Intentionally Left Blank]
21
IN WITNESS WHEREOF, the Company and the Investors have caused this
Waiver Agreement to be duly executed as of the date first written above.
COMPANY: INVESTORS:
WORLDWIDE XCEED GROUP, INC. HFTP INVESTMENT L.L.C.
By: /s/ Xxxxxx X. Xxxxxxx By: Promethean Asset
---------------------------- Management, L.L.C.
Name: Xxxxxx X. Xxxxxxx Its: Investment Manager
--------------------------
Title: Chief Executive Officer
By: /s/ Xxxxx X. X'Xxxxx, Xx.
------------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Title: Managing Member
GAIA OFFSHORE MASTER FUND, LTD.
By: Promethean Asset Management, L.L.C.
Its: Investment Manager
By: /s/ Xxxxx X. X'Xxxxx, Xx.
------------------------------------
Name: Xxxxx X. X'Xxxxx, Xx.
Title: Managing Member
22
SCHEDULE OF INVESTORS
NUMBER OF NUMBER
INVESTOR ADDRESS PREFERRED OF
INVESTOR'S NAME AND FACSIMILE NUMBER SHARES WARRANTS
------------------------- ------------------------------------
HFTP Investment L.L.C. c/o Promethean Asset Management, 241 15,273
L.L.C.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. X'Xxxxx, Xx.
Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Residence: New York
(REPRESENTATIVES)
Promethean Investment Group,
L.L.C.
000 Xxxxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. X'Xxxxx, Xx.
Xxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxxx Xxxxxx Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx,
Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
------------------------- ------------------------------------
GAIA Offshore Master Fund, c/o Promethean Asset Management, 7,000 645,818
Ltd. L.L.C.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. X'Xxxxx, Xx.
Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Residence: New York
(REPRESENTATIVES)
Promethean Investment Group,
L.L.C.
000 Xxxxxxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. X'Xxxxx, Xx.
Xxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Xxxxxx Xxxxxx Zavis
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx,
Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Totals
