CONVERTIBLE NOTE AND WARRANT PURCHASE AGREEMENT by and among Netsol Technologies, Inc., as Issuer and Seller and the Purchasers named herein, as Purchasers with respect to Seller’s and Warrants to Purchase Common Stock September 13, 2011
by and among
Netsol Technologies, Inc., as Issuer and Seller
and
the Purchasers named herein, as Purchasers
with respect to Seller’s
8.25% Convertible Notes
and Warrants to Purchase Common Stock
September 13, 2011
Table of Exhibits and Schedules
Exhibit A Form of 8.25% Convertible Note Due
Exhibit B Form of Warrant
Exhibit C Form of Investor Rights Agreement
Exhibit D Form of Opinion of Seller’s Counsel
Schedule 3.10 Litigation
Schedule 3.11 Absence of Certain Changes
Schedule 3.15 Intellectual Property
Schedule 3.17 Preemptive Rights
Schedule 3.19 Subsidiaries and Investments
Schedule 3.20 Capitalization
Schedule 3.21 Options, Warrants, Rights
Schedule 3.22 Employees, Employment Agreements and Employee Benefit Plans
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This CONVERTIBLE NOTE PURCHASE AGREEMENT (“Agreement”) is dated as of September 13, 2011, by and among NetSol Technologies, Inc., a Nevada corporation (the “Seller”), and each of the persons signatory hereto (each is individually referred to as a “Purchaser” and collectively, the “Purchasers”).
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shares of Common Stock issuable upon exercise of the Warrants are referred to herein as the “Warrant Shares.” The date on which the Closing occurs is the “Closing Date”.
“THE SHARES REPRESENTED BY, OR ACQUIRABLE UPON CONVERSION OF SECURITIES EVIDENCED BY, THIS [NOTE] [CERTIFICATE] HAVE NOT BEEN
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REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH REGISTRATION IS NOT REQUIRED.”
“THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS [NOTE] [CERTIFICATE] IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT DATED AS OF SEPTEMBER 13, 2011, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS [NOTE] [CERTIFICATE] TO THE SECRETARY OF THE COMPANY.”
The Seller represents and warrants to the Purchasers as follows:
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“Related Documents”), and the consummation of the transactions contemplated hereby and thereby (including, but not limited to, the sale and delivery of the Notes and the Warrants, and the subsequent issuance of the Conversion Shares upon conversion of the Notes and the Warrant Shares upon exercise of the Warrants) have been duly authorized, and no additional corporate or stockholder action is required for the approval of this Agreement. The Conversion Shares and Warrant Shares have been duly reserved for issuance by the Seller (without regard to any limitations on issuance or beneficial ownership). This Agreement and the Related Documents have been or, to the extent
contemplated hereby or by the Related Documents, will be duly executed and delivered and constitute the legal, valid and binding agreement of the Seller, enforceable against the Seller in accordance with their terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors, and except as enforceability of its obligations hereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
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(d) result in the creation or imposition of any Lien (as defined below) on any asset of the Seller or its Subsidiaries. For purposes of this Agreement, the term “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, claim or encumbrance of any kind in respect of such asset.
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can demonstrate its knowledge. All material agreements to which the Seller and its Subsidiaries are a party or to which any of their respective property or assets are subject that are required to be filed as Exhibits to the SEC Documents under Item 601 of Regulation S K are included as a part of, or specifically identified in, the SEC Documents.
There are no claims or complaints existing or, to the knowledge of the Seller or its Subsidiaries, threatened for product liability in respect of any product of the Seller or its Subsidiaries, and the Seller and its Subsidiaries are not aware of any basis for the assertion of any such claim.
(a) Any event that could reasonably be expected to have a Material Adverse Effect on the Seller or any of its Subsidiaries;
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(b) Any amendments or changes in the Articles or Bylaws of the Seller and its Subsidiaries;
(c) Any damage, destruction or loss, whether or not covered by insurance, that would, individually or in the aggregate, have or would be reasonably likely to have, a Material Adverse Effect on the Seller and its Subsidiaries;
(d) Except as set forth in its Recent Reports or on Schedule 3.11(d), any
(i) incurrence, assumption or guarantee by the Seller or its Subsidiaries of any debt for borrowed money other than for equipment leases;
(ii) issuance or sale of any securities convertible into or exchangeable for securities of the Seller other than to directors, employees and consultants pursuant to existing equity compensation or stock purchase plans of the Seller;
(iii) issuance or sale of options or other rights to acquire from the Seller or its Subsidiaries, directly or indirectly, securities of the Seller or any securities convertible into or exchangeable for any such securities, other than options issued to directors, employees and consultants in the ordinary course of business in accordance with past practice;
(iv) issuance or sale of any stock, bond or other corporate security;
(v) discharge or satisfaction of any material Lien, other than current liabilities incurred since June 30, 2010 in the ordinary course of business;
(vi) declaration or making any payment or distribution to stockholders or purchase or redemption of any share of its capital stock or other security;
(vii) sale, assignment or transfer of any of its intangible assets except in the ordinary course of business, or cancellation of any debt or claim except in the ordinary course of business;
(viii) waiver of any right of substantial value whether or not in the ordinary course of business;
(ix) material change in officer compensation except in the ordinary course of business and consistent with past practices; or
(x) other commitment (contingent or otherwise) to do any of the foregoing.
(e) Any creation, sufferance or assumption by the Seller or any of its Subsidiaries of any Lien on any asset (other than Liens existing on the date hereof or in connection with equipment leases and working capital lines of credit set forth on Schedule 3.11(e)) or any making of any loan, advance or capital contribution to or investment in any Person in an aggregate amount which exceeds $25,000 outstanding at any time;
(f) Any entry into, amendment of, relinquishment, termination or non-renewal by the
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Seller or its Subsidiaries of any material contract, license, lease, transaction, commitment or other right or obligation, other than in the ordinary course of business; or
(g) Any transfer or grant of a right with respect to the trademarks, trade names, service marks, trade secrets, copyrights or other intellectual property rights owned or licensed by the Seller or its Subsidiaries, except as among the Seller and its Subsidiaries.
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Intellectual Property (as defined in Section 3.15 hereof), as set forth in the Recent Reports, is true and complete, and no officer, director or other Affiliate of the Seller has any interest in any property, real or personal, tangible or intangible, used in or pertaining to the Seller’s business, including the Seller’s Intellectual Property, other than as set forth in the Recent Reports.
(a) the Seller or a Subsidiary thereof has the right to use or is the sole and exclusive owner of all right, title and interest in and to all foreign and domestic patents, patent rights, trademarks, service marks, trade names, brands and copyrights (whether or not registered and, if applicable, including pending applications for registration) owned, used or controlled by the Seller and its Subsidiaries (collectively, the “Rights”) and in and to each material invention, software, trade secret, technology, product, composition, formula, method of process used by the Seller or its Subsidiaries (the Rights and such other items, the
“Intellectual Property”), and, to the Seller’s knowledge, has the right to use the same, free and clear of any claim or conflict with the rights of others;
(b) no royalties or fees (license or otherwise) are payable by the Seller or its Subsidiaries to any Person by reason of the ownership or use of any of the Intellectual Property except as set forth on Schedule 3.15;
(c) there have been no claims made against the Seller or its Subsidiaries asserting the invalidity, abuse, misuse, or unenforceability of any of the Intellectual Property, and, to its knowledge, there are no reasonable grounds for any such claims;
(d) neither the Seller nor its Subsidiaries have made any claim of any violation or infringement by others of its rights in the Intellectual Property, and to the best of the Seller’s knowledge, no reasonable grounds for such claims exist; and
(e) neither the Seller nor its Subsidiaries have received notice that it is in conflict with or infringing upon the asserted rights of others in connection with the Intellectual Property.
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bound. All of such policies are in full force and effect and are valid and enforceable in accordance with their terms, and the Seller and its Subsidiaries have complied with all material terms and conditions of such policies, including premium payments. None of the insurance carriers has indicated to the Seller or its Subsidiaries an intention to cancel any such policy.
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Seller nor the Subsidiaries have granted anti-dilution rights to any person or entity in connection with any outstanding option, warrant, subscription or any other instrument convertible or exercisable for the securities of the Seller or any of its Subsidiaries. Other than the rights granted to the Purchasers under the Investor Rights Agreement and except as set forth on Schedule 3.21, there are no outstanding rights which permit the holder thereof to cause the Seller or the Subsidiaries to file a registration statement under the Securities Act or which permit the holder thereof to include securities of the Seller or any of its
Subsidiaries in a registration statement filed by the Seller or any of its Subsidiaries under the Securities Act, and there are no outstanding agreements or other commitments which otherwise relate to the registration of any securities of the Seller or any of its Subsidiaries for sale or distribution in any jurisdiction.
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withdrawal, suspension or cancellation by order of any state, federal or foreign court of law of any product or service, or (iii) which could have a Material Adverse Effect on the continued operation of any facility of the Seller or its Subsidiaries or which could otherwise cause the Seller or its Subsidiaries to withdraw, suspend or cancel any such product or service from the market or to change the marketing classification of any such product or service. Each product or service provided by Seller or its Subsidiaries has been provided in accordance in all material respects with the specifications under which such product or service normally is and has been provided and the provisions of all
applicable laws or regulations.
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13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Seller’s internal control over financial reporting.
Each Purchaser, for itself only, hereby severally and not jointly, represents and warrants to the Seller as follows:
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rights of creditors and except that enforceability of their obligations thereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
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and conditions of the transaction, and has received any additional information that the Purchaser has requested .
The Purchasers are hereby authorized to deliver a copy of any financial statement or any other information relating to the business, operations or financial condition of the Seller which may have been furnished to the Purchasers hereunder, to any regulatory body or agency having jurisdiction over the Purchasers or to any Person which shall, or shall have right or obligation to succeed to all or any part of the Purchasers’ interest in the Seller or this Agreement.
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(i) accelerated repayment of debt existing on the date hereof;
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(ii)
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the payment of dividends or other distributions on any capital stock of the Seller;
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(iii)
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increased executive compensation or loans to officers, employees, stockholders or directors, unless approved by a disinterested majority of the Board of Directors; or
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(iv) any expenditure not directly related to the business of the Seller.
(a) Except for transactions approved by a majority of the disinterested directors of the
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Board of Directors, neither the Seller nor any of its Subsidiaries shall enter into any transaction with any director, officer, employee or holder of more than 5% of the outstanding capital stock of any class or series of capital stock of the Seller or any of its Subsidiaries, member of the family of any such person, or any corporation, partnership, trust or other entity in which any such person, or member of the family of any such person, is a director, officer, trustee, partner or holder of more than 5% of the outstanding capital stock thereof, with the exception of transactions which are consummated upon terms that are no less favorable than would be available if such transaction had been effected at
arms-length, in the reasonable judgment of the Board of Directors.
(b) The Seller shall timely prepare and file with the Securities and Exchange Commission the form of notice of the sale of securities pursuant to the requirements of Regulation D regarding the sale of the Notes and Warrants under this Agreement.
(c) The Seller shall timely prepare and file such applications, consents to service of process (but not including a general consent to service of process) and similar documents and take such other steps and perform such further acts as shall be required by the U.S. state securities law requirements of each jurisdiction where a Purchaser resides as indicated on such Purchaser’s signature page hereto with respect to the sale of the Notes and Warrants under this Agreement.
(d) Neither the Seller nor any of its Affiliates, nor any Person acting on its or their behalf, shall directly or indirectly make any offers or sales of any securities or solicit any offers to buy any securities under circumstances that would cause the loss of the 4(2) exemption under the Securities Act for the transactions contemplated hereby. Subject to any consent or approval rights of the Purchasers hereunder, in the event the Seller contemplates an offering of its equity or debt securities within six months following the Closing Date, the Seller agrees that it shall notify the Purchasers of such offering (without providing any
material non-public information to any Purchaser without its prior approval) and obtain the prior written consent of Purchasers.
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(c) No Suspension of Trading. From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any suspension of trading of limited duration agreed to by the Seller, which suspension shall be terminated prior to Closing), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any trading market,
nor shall a banking moratorium have been declared either by the United States or New York State authorities, nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Notes and Warrants at the Closing.
1. (i) One or more Notes, in the aggregate principal amount as is to be purchased at the Closing by such Purchaser, registered in the name of such Purchaser; and
(ii) One or more certificates evidencing the Warrants, registered in the name of such Purchaser, pursuant to which such Purchaser shall be entitled to purchase that number of shares of Common Stock as determined herein.
2. The Investor Rights Agreement, in the form attached hereto as Exhibit C (the “Investor Rights Agreement”), duly executed by the Seller.
3. A legal opinion of counsel to the Seller (“Seller’s Counsel”), in the form attached hereto as Exhibit D.
4. A certificate of the Secretary of the Seller (the “Secretary’s Certificate”), in form and substance satisfactory to the Purchasers, certifying as follows as of the date of such Closing:
(i) that attached to the Secretary’s Certificate is true and complete copy of the Articles of Incorporation of the Seller, as amended, including any certificate of designation;
(ii) that a true copy of the Bylaws of the Seller, as amended to the Closing Date, is attached to the Secretary’s Certificate;
(iii) that attached thereto are true and complete copies of the resolutions of the Board of Directors of the Seller authorizing the execution, delivery and performance of this Agreement and the Related Documents, instruments and certificates required to be executed by it in connection herewith and approving the consummation of the transactions in the manner contemplated hereby including, but not limited to, the authorization and issuance of the Notes and Warrants;
(iv) the names and true signatures of the officers of the Seller signing
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this Agreement and all other documents to be delivered in connection with this Agreement;
(v) such other matters as required by this Agreement; and
(vi) such other matters as the Purchasers may reasonably request.
5. Seller shall have applied to each U.S. securities exchange, interdealer quotation system and other trading market where its Common Stock is currently listed or qualified for trading or quotation for the listing or qualification of the Conversion Shares and the Warrant Shares for trading or quotation thereon in the time and manner required thereby.
6. Such other documents as the Purchasers shall reasonably request.
(e) There shall have been no Material Adverse Effect with respect to the Seller.
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respective successors and assigns, from and against any losses, damages, or expenses which are caused by or arise out of (i) any breach or default in the performance by the Seller of any covenant or agreement made by the Seller in this Agreement or in any of the Related Documents; (ii) any breach of warranty or representation made by the Seller in this Agreement or in any of the Related Documents; (iii) any and all third party actions, suits, proceedings, claims, demands, judgments, costs and expenses (including reasonable legal fees and expenses) incident to any of the foregoing; and (iv) any enforcement of this indemnification.
The Indemnifying Party shall have the right, at its election, to take over the defense or settlement of such claim by giving written notice to the Indemnified Party at least fifteen (15) days prior to the time when an answer or other responsive pleading or notice with respect thereto is required. If the Indemnifying Party makes such election, it may conduct the defense of such claim through counsel of its choosing (subject to the Indemnified Party’s approval of such counsel, which approval shall not be unreasonably withheld), shall be solely responsible for the expenses of such defense and shall be bound by the results of its defense or settlement of the claim. The Indemnifying Party shall not settle any
such claim without prior notice to and consultation with the Indemnified Party, and no such settlement involving any equitable relief or which might have an adverse effect on the Indemnified Party may be agreed to without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld). So long as the Indemnifying Party is diligently contesting any such claim in good faith, the Indemnified Party may pay or settle such claim only at its own expense and the Indemnifying Party will not be responsible for the fees of separate legal counsel to the Indemnified Party, unless the named parties to any proceeding include both parties or representation of both parties by the same counsel would be inappropriate due to conflicts of interest or otherwise. If the Indemnifying Party does not make such election, or having made such election does not, in the reasonable
opinion of the Indemnified Party proceed diligently to defend such claim, then the Indemnified Party may (after written notice to the Indemnifying Party), at the expense of the Indemnifying Party, elect to take over the defense of and proceed to handle such claim in its discretion and the Indemnifying Party shall be bound by any defense or settlement that the Indemnified Party may make in good faith with respect to such claim. In connection therewith, the Indemnifying Party will fully cooperate with the Indemnified Party should the Indemnified Party elect to take over the defense of any such claim. The parties agree to cooperate in defending such third party claims and the Indemnified Party shall provide such cooperation and such access to its books, records and properties as the Indemnifying Party shall reasonably request with respect to any matter for which indemnification is sought
hereunder; and the parties hereto agree to cooperate with each other in order to ensure the proper and adequate defense thereof.
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With regard to claims of third parties for which indemnification is payable hereunder, such indemnification shall be paid by the Indemnifying Party upon the earlier to occur of: (i) the entry of a judgment against the Indemnified Party and the expiration of any applicable appeal period, or if earlier, five (5) days prior to the date that the judgment creditor has the right to execute the judgment; (ii) the entry of an unappealable judgment or final appellate decision against the Indemnified Party; or (iii) a settlement of the claim. Notwithstanding the foregoing, the reasonable expenses of counsel to the Indemnified Party shall be reimbursed on a current basis by the Indemnifying Party. With regard to other
claims for which indemnification is payable hereunder, such indemnification shall be paid promptly by the Indemnifying Party upon demand by the Indemnified Party.
“Breach Event” means either:
(i) Any breach of any warranty or representation of the Seller as of the date made in this Agreement, any Related Agreement or any other agreement delivered herewith, which breach, or the facts and circumstances concerning such breach, has or is reasonably likely to have a Material Adverse Effect; or
(ii) Any breach by the Seller of any material covenant or obligation under this Agreement, any Related Agreement or any other agreement delivered herewith, and which breach, if capable of being cured, has not been cured within ten (10) days after notice of such breach has been given by the holders of a majority of principal amount of Notes to the Seller.
The Seller and the Purchasers have expressly negotiated this Section 7.4, and have agreed that in light of the circumstances existing at the time of execution of this Agreement, the liquidated damages expressed herein represent a reasonable estimate of the harm likely to be suffered by the Purchasers upon the occurrence of a Breach Event.
8.1 Further Assurances. Each party agrees to cooperate fully with the other parties and to execute such further instruments, documents and agreements and to give such further written assurances as may be reasonably requested by any other party to better evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Agreement, and further agrees to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable
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under applicable law to consummate and make effective the transactions contemplated hereby, to obtain all necessary waivers, consents and approvals, to effect all necessary registrations and filings, and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement.
8.2 Fees and Expenses. The parties hereto shall pay their own costs and expenses in connection herewith. The Seller shall pay all fees and expenses of any placement agents, finders and escrow agents in connection with the transactions contemplated by this Agreement pursuant to a separate agreement between such parties.
8.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a
business day or later than 5:00 p.m. (New York City time) on any business day, (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight courier service such as Federal Express, or (d) actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:
If to the Purchasers at each Purchaser’s address set forth on such Purchaser’s signature page hereto, or with respect to the Seller, addressed to:
NetSol Technologies, Inc.
00000 Xxxxxxxxx Xxxx,
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such notice. Copies of notices to any Purchaser shall be sent to the addresses, if any, listed on such Purchaser’s signature page hereto, with a copy to:
Xxxxx X. Xxxxxxx, P.C.
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Unless otherwise stated above, such communications shall be effective when they are received by the addressee thereof in conformity with this Section. Any party may change its address for such communications by giving notice thereof to the other parties in conformity with this Section.
8.4 Governing Law. All questions concerning the construction, validity, enforcement
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and interpretation of this Agreement shall be governed by and enforced in accordance with the laws of the State of New York without reference to the conflicts of laws principles thereof.
8.5 Jurisdiction and Venue. This Agreement shall be subject to the exclusive jurisdiction of the Xxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of New York and if such court does not have proper jurisdiction, the State Courts of New York County, New York. The parties to this Agreement agree that any breach of any term or condition of this Agreement shall be deemed to be a breach occurring in the State of New York by virtue of a failure to perform an act required to be performed in the State of New York and irrevocably and expressly agree to submit to the jurisdiction of the
Xxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of New York and if such court does not have proper jurisdiction, the State Courts of New York County, New York for the purpose of resolving any disputes among the parties relating to this Agreement or the transactions contemplated hereby. The parties irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, or any judgment entered by any court in respect hereof brought in New York County, New York, and further irrevocably waive any claim that any suit, action or proceeding brought in Xxxxxxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxx of New York and if such court does not have proper jurisdiction, the State Courts of New York County, New York has been brought in an inconvenient
forum. Each of the parties hereto consents to process being served in any such suit, action or proceeding, by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 8.5 shall affect or limit any right to serve process in any other manner permitted by law.
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writing signed by the Seller and at least 75% in interest of the Purchasers, and such waiver or amendment, as the case may be, shall be binding upon all Purchasers. The waiver by a party of any breach hereof or default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default. This Agreement may not be amended or supplemented by any party hereto except pursuant to a written amendment executed by the Seller and at least 75% in interest of the Purchasers. No amendment shall be effected to impact a Purchaser in a disproportionately adverse fashion without the consent of such individual Purchaser.
[Signature Page Follows]
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SELLER:
NETSOL TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxx
______________________________
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
PURCHASER:
THE TAIL WIND FUND LTD.
By: CIM INVESTMENT MANAGEMENT LTD.,
as investment manager
By: /s/ Xxx Xxx
Name:
Title:
Address:
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx XX0X 0XX
Attn: Xxx Xxx
Telephone: 000-00-000-000-0000
Facsimile: 011-44-207-468-7657
Email: x.xxx@xxxxxxxxx.xxx
Residence/Jurisdiction of Organization: B.V.I.
Principal Amount of Investment/Purchase Price: $3,600,000.00
Number of Warrant Shares: 1,267,606
PURCHASER:
SOLOMON STRATEGIC HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx, Director
Address:
c/o Xxxxxx X. XxxXxxxxx
Greenlands
The Red Gap
Xxxxxxxxxx, XX0 0XX, Xxxxxxx Xxxxx
Telephone: x000 (00) 0000 000000
Facsimile: x000 (00) 0000 000000
Email: xxxxxxxxx_xxx@xxxx.xxx
Residence/Jurisdiction of Organization: B.V.I.
Principal Amount of Investment/Purchase Price: $400,000.00
Number of Warrant Shares: 140,845
Schedule 3.1
Seller’s Subsidiaries
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1.
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NTPK (THAILAND) Company Limited.; Bangkok, Thailand
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2.
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NetSol Technologies Ltd. located in Lahore, Pakistan (60.52% interest).
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3.
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NetSol Connect (Pvt) Limited located in Karachi, Pakistan.
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4.
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NetSol Abraxas, Inc., located in Adelaide, Australia.
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5.
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NetSol Technologies Ltd. located in London, England.
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6.
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NetSol Technologies Europe, Ltd., Located in Horsham, England
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7.
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NetSol-Innovation (Pvt) Limited, Located in Lahore, Pakistan.(50.1% interest)
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8.
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NetSol Technologies North America, Inc., Located in Alameda, California
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9.
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NetSol Technologies Beijing, a wholly owned subsidiary being formed in Beijing, PRC.
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Seller’s Investments
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1.
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Atheeb NetSol Saudi Company Limited, located in in the Kingdom of Saudi Arabia
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2.
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A to be formed joint venture company with Brasil Invest Group to be named NetSol Brasil Invest to be formed in Brazil.
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3.9
The Convertible Notes issued by the Company on or about August 11, 2009 were due on or about August 11, 2011, and, accordingly are past due.
3.10
None
Schedule 3.11 (b), (d) and (e)
(b) None
(d) Seller has received subscriptions to purchase shares of common stock from accredited, non-U.S. individuals for a total purchase of 714,286 shares of common stock for total consideration of $500,000. Such shares will be issued no later than September 20, 2011.
(e)
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*
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A secure line of credit collateralized by Certificates of Deposit with Habib American Bank.
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·
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The Company’s subsidiary, NetSol PK, entered into a term finance facility from Askari Bank to finance the construction of a new building. The total amount of the facility is Rs. 200,000,000 or approximately $2,319,378 (secured by the first of Rs. 580 million over the land, building and equipment of the company). The interest rate is 3% above the six-month Karachi Inter Bank Offering Rate. As on June 30, 2010,
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the subsidiary had used Rs. 100,000,000 or approximately $1,159,689 of which $724,806 was shown as long term liabilities and the remainder of $434,883 as current maturity. As of the year ended June 30, 2011, the Company has used Rs. 75,000,000 or approximately $869,767 of which $434,884 is shown as long term liabilities and the remainder of $434,883 as current maturity.
Schedule 3.15
None
Schedule 3.17
None
Schedule 3.18
None
Schedule 3.19
See Schedule 3.1
Schedule 3.20
None
Schedule 3.21
None
Schedule 3.22
None