WAIVER AND AMENDMENT AGREEMENT
Exhibit
10.1
This
WAIVER AND AMENDMENT
AGREEMENT (this “Waiver”) is entered into as of June 6, 2008 by and
between ENTERCONNECT INC., a Nevada corporation (the “Company”), and the
Investors on the Schedule of Investors attached hereto (the "Investors”), with
reference to the following facts:
WHEREAS, the Company entered
into that certain Securities Purchase Agreement, dated as of December 20, 2007
(the “Existing Securities Purchase Agreement”) by and among the Company and the
Investors, whereby the Company issued, among other things, certain Senior
Secured Convertible Notes (the "Notes”) convertible into the Company’s common
stock, par value $0.001 per share (the “Common Stock”), in accordance with the
terms of the Notes.
WHEREAS, as of May 29, 2008,
the Company failed to meet certain requirements set forth in Section 2(g) of the
Registration Rights Agreement (the “Initial Effectiveness
Deadline”).
WHEREAS, the Company has
requested that the Investors, as holders of the Notes, waive such
default and, subject to the terms hereof, the Investors have agreed to waive
such Default on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in
consideration of the premises set forth above, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Defined
Terms. Capitalized terms used and not otherwise defined in this Waiver shall
have the meanings given to them in the Agreement.
2. Waiver
of Effectiveness Failure. The Investors hereby waive any Event of
Default (as defined in the Notes) arising as a result of the Effectiveness
Failure (as that term is defined under the Registration Rights Agreement) as a
result of the Registration Statement not having been declared effective on or
before the Initial Effectiveness Deadline (the “Waiver Defaults”).
3. Reaffirmation
of Obligations. The Company hereby confirms and agrees that, (i) the Agreement,
the Registration Rights Agreement, the Securities, the Security Documents and
each other Transaction Document is, and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects, and (ii) the
execution, delivery and effectiveness of this Waiver shall not operate as an
amendment of any right, power or remedy of the Investors under any Transaction
Document, nor constitute an amendment of any provision of any Transaction
Document.
4. Amendments to
Registration Rights Agreement.
(a)
Ratifications. Except as otherwise expressly provided herein, the Existing
Securities Purchase Agreement and each other Transaction Document is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, except that on and after the Closing Date (i) all references in
the Existing Securities Purchase Agreement to “this Agreement”, “hereto”,
“hereof”, “hereunder” or words of like import referring to the Securities
Purchase Agreement shall mean the Existing Securities Purchase Agreement as
amended by this Agreement, (ii) all references in the other Transaction
Documents to the “Securities Purchase Agreement”, “thereto”, “thereof”,
“thereunder” or words of like import referring to the Securities Purchase
Agreement shall mean the Existing Securities Purchase Agreement as amended by
this Waiver, and (iii) all references in the other Transaction Documents to the
“Registration Rights Agreement”, “thereto”, “thereof”, “thereunder” or words of
like import referring to the Registration Rights Agreement shall mean the
Registration Rights Agreement as amended by this Waiver.
(b)
Amendment to Registration Rights Agreement. The Registration Rights
Agreement is hereby amended as follows:
(i) “Initial
Effective Deadline” means the date (i) in the event that the Initial
Registration Statement is not subject to a full review by the SEC, ninety (90)
calendar days after the Closing Date or (ii) in the event that the Initial
Registration Statement is subject to a full review by the SEC, two-hundred and
forty (240) calendar days after the Closing Date.
(ii)
“Initial Required Registration Amount” for the Registration Statement means
2,369,176 Warrant Shares issued and issuable pursuant to the Warrants as of the
trading day immediately preceding the applicable date of determination, all
subject to adjustment as provided in Section 2(e) (without regard to any
limitations on conversion of the Notes or exercise of the
Warrants).”
5. REPRESENTATIONS
AND WARRANTIES No Event of Default. The Company represents and warrants to the
Investors that after giving effect to the terms of this Waiver and the Other
Agreements (as defined below), no Event of Default (as defined in the Notes)
shall have occurred and be continuing as of the date hereof.
6. Upon
execution of Waivers by the Company and the Required Holders, this Waiver shall
become effective as of the date first written above (the “Effective
Date”).
7. Disclosure
of Transactions and Other Material Information. On or before 5:30 p.m., New York
City time, on or before the third Business Day following the date of this
Waiver, the Company shall file a Current Report on Form 8-K describing the terms
of the transactions contemplated by this Waiver in the form required by the 1934
Act and attaching this Waiver as an exhibit to such filing (including all
attachments, the “8-K Filing”). From and after the filing of the 8-K Filing with
the SEC, no Investor shall be in possession of any material, nonpublic
information received from the Company, any of its Subsidiaries or any of their
respective officers, directors, employees or agents, that is not disclosed in
the 8-K Filing.
8. Remedies.
The Investor and each holder of the Securities shall have all rights and
remedies set forth in the Transaction Documents and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law. Any Person
having any rights under any provision of this Waiver shall be entitled to
enforce such rights specifically (without posting a bond or other security), to
recover damages by reason of any breach of any provision of this Waiver and to
exercise all other rights granted by law. Furthermore, the Company recognizes
that in the event that it fails to perform, observe, or discharge any or all of
its obligations under this Waiver, any remedy at law may prove to be inadequate
relief to the Investor. The Company therefore agrees that the Investor shall be
entitled to seek temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages and without posting a bond or
other security.
9. Independent
Nature of Investors’ Obligations and Rights. The obligations of the Investors
under this Waiver or any other Transaction Document are several and not joint
with the obligations of any other Investor, and the Investors shall not be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document or Other Waiver. Nothing contained
herein or in this Waiver, any Other Waiver or any other Transaction Document,
and no action taken by the Investor pursuant hereto, shall be deemed to
constitute the Investor and other Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investor and other Investors are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Waiver, any
Other Waiver or any other Transaction Document and the Company acknowledges that
the Investors are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Waiver, any Other Waiver
and any other Transaction Document. The Company and the Investor confirm that
the Investor has independently participated in the negotiation of the
transactions contemplated hereby with the advice of its own counsel and
advisors. The Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Waiver, any Other Waiver or out of any other Transaction Documents, and it shall
not be necessary for any other Investor to be joined as an additional party in
any proceeding for such purpose.
10. MISCELLANEOUS.
(a)
Counterparts. This Waiver may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile
signature.
(b)
Headings. The headings of this Waiver are for convenience of reference and shall
not form part of, or affect the interpretation of, this Waiver.
(c)
Severability. If any provision of this Waiver shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Waiver in that jurisdiction
or the validity or enforceability of any provision of this Waiver in any other
jurisdiction.
(d)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Waiver shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Waiver and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS WAIVER OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) No
Third Party Beneficiaries. This Waiver is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.
(f)
Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Waiver and the consummation of the transactions contemplated
hereby.
(g) No
Strict Construction. The language used in this Waiver will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party.
(h)
Entire Agreement; Effect on Prior Agreements; Amendments. Except for the
Transaction Documents in effect prior to this Waiver (to the extent any such
Transaction Document is not amended by this Waiver), this Waiver supersedes all
other prior oral or written agreements between the Investor, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Waiver 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 the Investor makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Waiver may be amended other than by an instrument in writing signed by the
Company. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Notes or holders of the Warrants, as the case may be. The
Company has not, directly or indirectly, made any agreements with any of the
Investors relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction
Documents.
(i)
Successors and Assigns. This Waiver shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns in accordance
with the terms of the Existing Securities Purchase Agreement.
(Signature
pages follows)
IN WITNESS WHEREOF, each Buyer
and the Company have caused their respective signature page to this Securities
Purchase Agreement to be duly executed as of the date first written
above.
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COMPANY:
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By:
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/S/ Xxx
Xxxxxxxxx
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Name: Xxx
Xxxxxxxxx
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Title: Chairman
& Chief Executive
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Officer
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BUYERS:
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HIGHBRIDGE
INTERNATIONAL LLC
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By:
Highbridge Capital Management, LLC
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Its
Trading Manager
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By:
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/s/ Xxxx
Xxxxxxxxx
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Name:
Xxxx Xxxxxxxxx
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Title:
Authorized Person
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