TERM DEBT - CONVERTIBLE DEBT EXCHANGE AGREEMENT
Exhibit
10.1
This TERM DEBT – CONVERTIBLE DEBT
EXCHANGE AGREEMENT (this "Agreement") is
entered into as of March 31, 2010, by and between Zanett, Inc., a Delaware
corporation (the "Company") and
Rockport Investments Ltd. (the "Investor").
RECITALS
WHEREAS, on February 28, 2010,
the Investor and Xxxxx Xxxxxxxx ("Xx. Xxxxxxxx")
entered into an arrangement whereby (i) the Investor agreed to purchase from Xx.
Xxxxxxxx, and Xx. Xxxxxxxx agreed to sell to the Investor, those two certain
promissory notes held by Xx. Xxxxxxxx in an aggregate principal amount equal to
$5,325,000 (the "Promissory Notes"),
and (ii) the Investor agreed to assume from Xx. Xxxxxxxx, and Xx. Xxxxxxxx
agreed to assign to the Investor, all of Xx. Xxxxxxxx'x rights under that
certain line of credit to extend credit to the Company up to $3,000,000 (the
"Line of
Credit"), in each case extinguishing in full all obligations owing by the
Company to Xx. Xxxxxxxx thereunder in favor of repayment obligations owing to
the Investor.
WHEREAS, the Company wishes to
refinance its obligations now owing to the Investor in respect of the Promissory
Notes and the Line of Credit in a transaction with the Investor in which the
Company will issue convertible debt of the Company to the Investor (the "Company Convertible
Debt") in exchange for the Promissory Notes and the Line of Credit, on
the terms and conditions set forth herein;
NOW, THEREFORE, in
consideration of the foregoing recitals and for good and other valuable
consideration hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE
I
EXCHANGE
OF PROMISSORY NOTES AND LINE OF CREDIT
FOR
COMPANY CONVERTIBLE DEBT
Section
1.1 Authorization. The Company has
authorized the issuance of the Company Convertible Debt to the Investor as
contemplated hereby.
Section
1.2 Issuance
of Convertible Debt and Delivery of Promissory Note and Line of
Credit. Subject to
Section 5.1 hereof, at the Closing (as defined in Section 1.3 below), the
Company shall issue to the Investor the Company Convertible Debt in the
aggregate principal amount of Seven Million One Hundred Thirty One Thousand Nine
Hundred Eighty Three Dollars and No Cents ($7,131,983.00) and the Investor shall
deliver to the Company the Promissory Notes and the agreement evidencing the
Line of Credit. The issuance of the Company Convertible Debt shall be
deemed to be made in full and indefeasible satisfaction of the Company's
obligations under the Promissory Notes and the Line of Credit.
C.G.
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D.H.
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Section
1.3 Closing. The
closing of the issuance of the Company Convertible Debt and the exchange of the
Promissory Note and Line of Credit pursuant to this Agreement (the "Closing") shall take
place at the offices of the Company at 10:00 a.m. local time, on March 31, 2010,
or such earlier date upon which each of the conditions set forth in Sections
5.1(a) and 5.1(b) have been satisfied or waived, or at such other time or place
as the Company and the Investor may mutually agree (such date is hereinafter
referred to as the "Closing
Date").
ARTICLE
II
AMENDMENT
OF PROMISSORY NOTES AND LINE OF CREDIT; FORBEARANCE
Section
2.1 Amendment
of Promissory Notes.
(a)
Section 1 of the Promissory Note issued by Zanett Commercial
Solutions, Inc., a wholly-owned subsidiary of the Company, to the Investor (as
successor to Xx. Xxxxxxxx) on March 15, 2009 in the aggregate principal amount
of $4,575,000 is hereby amended and restated in its entirety to read as
follows:
"1. Maturity
Date. The principal balance of this Note and all accrued
interest thereon shall be due and payable on March 31, 2010 (the "Maturity Date")."
(b)
Section 1 of the Promissory Note issued by Zanett
Commercial Solutions, Inc., a wholly-owned subsidiary of the Company, to the
Investor (as successor to Xx. Xxxxxxxx) on March 15, 2009 in the aggregate
principal amount of $750,000 is hereby amended and restated in its entirety to
read as follows:
"1. Maturity
Date. The principal balance of this Note and all accrued
interest thereon shall be due and payable on March 31, 2010 (the "Maturity
Date")."
(c)
Section 2 of the Loan Agreement between the Company and the
Investor (as successor to Xx. Xxxxxxxx) effective as of February 21, 2007 is
hereby amended and restated in its entirety to read as follows:
"2. Maturity
Date. The outstanding balance of this Note and all accrued
interest thereon shall be due and payable on March 31, 2010 (the "Maturity
Date")."
Section
2.2 Forbearance. The
Investor agrees that until April 1, 2010, it shall not exercise or attempt to
exercise any right or remedy otherwise available to the Investor as an unsecured
creditor of the Company, including, without limitation filing any action or
proceeding against the Company (the forbearance from such actions by the
Investor being herein referred to as the “Forbearance
Covenant”). The Company expressly acknowledges and agrees,
however, that from and after April 1, 2010 (unless the Closing shall have
occurred), the Investor shall have the right, at any time and from time to time,
to exercise any and all rights and remedies available to it under the Promissory
Notes and the agreement evidencing the Line of Credit (subject to any applicable
subordination agreement), at law and in equity, to the same extent as the
Investor would be entitled if the Forbearance Covenant had never been part of
this Agreement.
C.G.
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D.H.
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2
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The Company hereby represents and
warrants to the Investor, as of the date of this Agreement and as of the Closing
Date, as follows:
Section
3.1 Organization;
Requisite Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate
power and authority (a) to own and lease its properties and assets and to carry
on its business as now conducted and as presently proposed to be conducted, (b)
to execute and deliver this Agreement, the promissory note evidencing the
Company Convertible Debt (the "Convertible Note")
and any other agreements, documents and instruments to be delivered by the
Company that are contemplated in, or delivered pursuant to, this Agreement or
the Convertible Note, (c) to issue the Company Convertible Debt and (d) to carry
out the provisions of this Agreement and the Convertible Note. The Company is
duly qualified and is authorized to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of its activities
and of its properties makes such qualification necessary, except for those
jurisdictions in which a failure to be so qualified or authorized would not have
a material adverse effect on the properties, assets, liabilities, financial
condition, business, operations of the Company (a "Material Adverse
Effect").
Section
3.2 Authorization;
Binding Obligations. All corporate
action on the part of the Company and its officers and Board of Directors
necessary for (a) the authorization of this Agreement and the issuance of the
Company Convertible Debt, (b) the performance of all obligations of the Company
hereunder and under the Convertible Note, and (c) the authorization, issuance
and delivery of the Convertible Note and the common stock issuable upon
conversion of the Company Convertible Debt has been taken (subject to, however,
that if the common stock of the Company is then-listed on the Nasdaq Capital
Markets or any other national securities exchange, to approval by the Company’s
stockholders at its 2010 Annual Meeting of Stockholders). This
Agreement, when executed and delivered, will be the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights and (ii) general principles of equity that
restrict the availability of equitable remedies.
Section
3.3 Compliance
with Laws and Other Instruments. The Company is
not in violation of or default (with or without the passage of time or giving of
notice) under (a) any term of its Certificate of Incorporation or Bylaws, (b)
any provision of any mortgage, indenture, agreement, instrument, arrangement or
oral or written contract to which the Company is a party or by which it is bound
or (c) any judgment, decree, order, writ, injunction, law, statute, rule,
regulation or restriction of any domestic or foreign government (whether
federal, state or local, including any political subdivision, department,
instrumentality, commission, board, bureau or agency thereof, and any other
regulatory or administrative body, a "Governmental Entity")
applicable to the Company, which violation or default could have a Material
Adverse Effect.
C.G.
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D.H.
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Section
3.4 No
Conflicts. The execution,
delivery and performance of, and compliance with, this Agreement, the
Convertible Note and the issuance of the Company Convertible Debt and the common
stock issuable upon conversion of the Company Convertible Debt will not, with or
without the passage of time or giving of notice, (a) violate, be in conflict
with or constitute a default under (i) any term of the Company’s Certificate of
Incorporation or Bylaws, (ii) any provision of any mortgage, indenture,
contract, agreement, instrument or contract to which the Company is party or by
which it is bound, or (iii) any judgment, decree, order, writ, injunction, law,
statute, rule, regulation or restriction of any Governmental Entity applicable
to the Company, or (b) result in (i) the creation of any mortgage, pledge, lien,
claim, encumbrance or charge (each, an "Encumbrance") upon
any of the properties or assets of the Company or (ii) the suspension,
revocation, impairment, forfeiture or nonrenewal of any franchise, permit,
license, authorization or approval applicable to the Company, its business or
operations or any of its properties or assets.
Section
3.5 Litigation. There is no
claim, action, suit, proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company that (a) questions the
validity of this Agreement or the right of the Company to enter into any of such
agreements or to consummate the transactions contemplated hereby or thereby, or
(b) could have, either individually or in the aggregate, a Material Adverse
Effect, nor is the Company aware that there is any reasonable basis for either
of the foregoing. The Company is not a party or subject to the
provisions of any judgment, decree, order, writ or injunction of any court or
Governmental Entity.
Section
3.6 No
Material Adverse Effect Since September 30, 2009,the Company
has operated its business only in the ordinary course consistent with past
practice, and there has not been, nor is there presently any change, condition,
occurrence, circumstance or event of any character that, either individually or
in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.
Section
3.7 Capitalization. All issued and
outstanding stock of the Company has been duly authorized and validly issued in
full compliance with all applicable laws concerning the issuance of
securities. The common stock issuable upon conversion of the Company
Convertible Debt, when issued in compliance with the provisions of the
Convertible Note, will be duly authorized and validly issued in full compliance
with all applicable laws concerning the issuance of securities, and will be free
and clear of any Encumbrances.
Section
3.8 Offering
Valid. Assuming the
accuracy of the representations and warranties of the Investor contained in
Article III hereof, the offer, sale and issuance of the Company Convertible Debt
and the common stock issuable upon conversion of the Company Convertible Debt
will be exempt from the registration requirements of the Securities Act of 1933,
as amended (the "Securities
Act"). Neither the Company nor any agent on its behalf has
solicited or will solicit any offers to sell or has offered to sell or will
offer to sell all or any part of the principal amount of the Company Convertible
Debt to any person or entity so as to bring the sale of such Company Convertible
Debt by the Company within the registration provisions of the Securities Act or
any other applicable securities laws.
C.G.
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D.H.
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ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR
The Investor hereby represents and
warrants to the Company, as of the date of this Agreement and as of the Closing
Date, as follows:
Section
4.1 Organization;
Requisite Power. The Investor is a
limited company duly organized and validly existing under the laws of its
jurisdiction of formation. The Investor was not organized for the
purpose of making an investment in the Company. The Investor has all
requisite power and authority to execute and deliver this Agreement and to carry
out its provisions.
Section
4.2 Authorization;
Binding Obligations. All action on the
part of the Investor necessary for the authorization of this Agreement and the
performance of all obligations of the Investor hereunder has been
taken. This Agreement, when executed and delivered, will be the
legal, valid and binding obligation of the Investor enforceable against the
Investor in accordance with its terms, except as limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors’ rights and (b) general
principles of equity that restrict the availability of equitable
remedies.
Section
4.3 Investment
Representations. The Investor
understands that the Company Convertible Debt is being offered pursuant to an
exemption from registration contained in the Securities Act based in part upon
the following representations of the Investor:
(a)
The Investor has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company so that it is capable of evaluating the merits and risks
of its investment in the Company. The Investor must bear the economic
risk of this investment indefinitely unless the Company Convertible Debt and/or
the common stock issuable upon conversion of the Company Convertible Debt are
registered pursuant to the Securities Act and applicable state securities laws,
or an exemption from registration is available.
(b)
The Investor is acquiring the Company Convertible Debt for the
Investor’s own account for investment only, and not with a view towards their
distribution other than in compliance with all applicable securities
laws.
(c)
The Investor has had an opportunity to ask questions and
receive answers from representatives of the Company concerning the terms and
conditions of the investment, the business, operations, financial condition and
prospects of the Company and all other matters deemed relevant to the
Investor. The Investor has independently evaluated the transactions
contemplated by this Agreement and has reached its own decision to enter into
this Agreement. However, notwithstanding the Investor’s
investigation, the Investor is relying on the representations, warranties and
covenants of the Company set forth herein in making this investment.
C.G.
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D.H.
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(d)
The Investor is an “accredited investor” within the meaning of
Regulation D under the Securities Act.
Section
4.4 Transfer
Restrictions. The Investor
understands that the Company Convertible Debt and the common stock issuable upon
conversion of the Company Convertible Debt have not been registered under the
Securities Act or the laws of any state and may not be sold, transferred or
otherwise disposed of without registration under the Securities Act and
applicable state securities laws or pursuant to an exemption therefrom, and in
any case subject to the restrictions and terms set forth in the Convertible
Note.
Section
4.5 Finders’
Fees. No agent, broker,
investment banker, person or firm acting on behalf of or under the authority of
the Investor is or will be entitled to any broker’s or finder’s fee or any other
commission directly or indirectly in connection with the transactions
contemplated hereby.
ARTICLE
V
CONDITIONS
TO CLOSING
Section
5.1 Conditions to
Closing.
(a) Conditions to Investor’s
Closing Obligations. The obligation of the Investor to
exchange its Promissory Notes and Line of Credit for the Company Convertible
Debt is subject to the satisfaction or waiver of each of the following
conditions precedent:
(i) The
representations and warranties made by the Company in Article II hereof shall
have been true and correct on and as of the date hereof and shall be true and
correct as of the Closing Date as if made on the Closing Date, and the Company
shall have performed and complied with all covenants and provisions of this
Agreement required to be performed or complied with by it at or prior to the
Closing.
(ii) (A)
No law, statute, rule, regulation or restriction shall have been promulgated,
enacted or entered that restrains, enjoins, prevents, prohibits or otherwise
makes illegal the issuance or transfer, as applicable, of the Company
Convertible Debt, the performance by the Investor and the Company of any of
their respective obligations under this Agreement or the Convertible Note or the
consummation of the transactions contemplated hereby or thereby; (B) no
preliminary or permanent injunction or other order shall have been issued and
remain in effect by any court or Governmental Entity that restrains, enjoins,
prevents, prohibits or otherwise makes illegal the issuance or transfer, as
applicable, of the Company Convertible Debt, the performance by the Investor or
the Company of any of their obligations under this Agreement or the Convertible
Note or the consummation of the transactions contemplated hereby or thereby; and
(C) no court or Governmental Entity shall have instituted any action, suit,
proceeding or investigation that seeks to restrain, enjoin, prevent, prohibit or
otherwise make illegal the issuance or transfer, as applicable, of the Company
Convertible Debt, the performance by the Investor or the Company of any of their
obligations under this Agreement or the Convertible Note or the consummation of
the transactions contemplated hereby or thereby.
C.G.
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D.H.
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(iii) The
Company shall have duly authorized the issuance of the Company Convertible Debt
and delivered the executed Convertible Note to the Investor at the Closing,
reflected on the books and records of the Company, contingent on approval by the
Company's common stockholders of the transactions contemplated by this Agreement
and the issuance of the Company Convertible Debt to the Investor at the
Company's 2010 Annual Meeting of Stockholders (if the Company's common stock is
then-listed on a national securities exchange).
(iv) The
Company shall have obtained any and all consents, permits and waivers, including
those from NASDAQ or any other national securities exchange, necessary or
appropriate for consummation of the transactions contemplated by this Agreement
and the Convertible Note, each in form and substance reasonably satisfactory to
the Investor, and shall have provided copies of all such consents, permits and
waivers to the Investor at or prior to the Closing; provided, however, that
approval by the Company's stockholders of the transactions contemplated by this
Agreement and the issuance of the Company Convertible Debt to the Investor shall
not be required until the Company's 2010 Annual Meeting of Stockholders (and
only shall it be required if the Company's common stock is then-listed on a
national securities exchange).
(b) Conditions to Company’s
Closing Obligations. The obligation of the Company to issue
and transfer the Company Convertible Debt to the Investor at the Closing is
subject to the satisfaction or waiver of each of the following conditions
precedent:
(i) The
representations and warranties made by the Investor in Article III hereof shall
have been true and correct on and as of the date hereof and shall be true and
correct as of the Closing Date as if made on the Closing Date, and the Investor
shall have performed and complied with all covenants and provisions of this
Agreement required to be performed or complied with by them at or prior to the
Closing.
(ii) (A)
No law, statute, rule, regulation or restriction shall have been promulgated,
enacted or entered that restrains, enjoins, prevents, prohibits or otherwise
makes illegal the issuance or transfer, as applicable, of the Company
Convertible Debt, the performance by the Investor and the Company of any of
their respective obligations under this Agreement of the Convertible Note or the
consummation of the transactions contemplated hereby or thereby; (B) no
preliminary or permanent injunction or other order shall have been issued and
remain in effect by any court or Governmental Entity that restrains, enjoins,
prevents, prohibits or otherwise makes illegal the issuance or transfer, as
applicable, of the Company Convertible Debt, the performance by the Investor or
the Company of any of their obligations under this Agreement or the Convertible
Note or the consummation of the transactions contemplated hereby or thereby; and
(C) no court or Governmental Entity shall have instituted any action, suit,
proceeding or investigation that seeks to restrain, enjoin, prevent, prohibit or
otherwise make illegal the issuance of the Company Convertible Debt, the
performance by the Investor or the Company of any of their obligations under
this Agreement or the Convertible Note or the consummation of the transactions
contemplated hereby or thereby.
C.G.
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D.H.
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(iii) The
Company shall have received an agreement, in form and substance acceptable to
it, among the Company, Xx. Xxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and
Xxxxxx Xxxxxxx, executed by all parties, pursuant to which each of them agree to
vote all of the voting interests in the Company owned by them "FOR" the
transactions contemplated by this Agreement and the issuance of the Company
Convertible Debt to the Investor at the Company's 2010 Annual Meeting of
Stockholders, if the Company's common stock is then-listed on a national
securities exchange (the "Transaction Approval
Agreement"), in the form attached hereto as Exhibit
A.
(iv) The
Company shall have received an agreement, in form and substance acceptable to
it, among the Company, the Investor and Xxxxxxx Xxxxxxxx, executed by all
parties, pursuant to which the Investor appoints Xxxxxxx Xxxxxxxx as its proxy
to vote in his discretion on all matters all of the votes which the Investor has
the right to vote at all meetings of stockholders of the Company so long as any
amounts remaining outstanding under the Company Convertible Debt (the "Voting Agreement"),
in the form attached hereto as Exhibit
B.
(v) The
Company shall have received a copy of the Subordination Agreement (as defined
below) among the Company, Bank of America, N.A. and the Investor, executed by
all parties.
ARTICLE
VI
COVENANTS
Section
6.1 2010
Annual Meeting of Stockholders. The Company shall
include in its Proxy Statement for the 2010 Annual Meeting of Stockholders the
proposal for stockholder vote to approve the transactions contemplated by this
Agreement (including the increase in the authorized Common Stock of the Company)
and the issuance of the Company Convertible Debt to the Investor, and recommend
that stockholders vote "FOR" such proposal.
Section
6.2 Subordination. The
Investor and the Company shall enter into a subordination agreement with Bank of
America, N.A. (the “Subordination Agreement”) (and, in the event the Company's
senior credit facility with Bank of America, N.A. is refinanced with another
senior lender, with such other senior lender), pursuant to the terms of which
the Investor's rights under the Convertible Note shall be subordinate to the
Company's obligations to Bank of America, N.A. or such other senior
lender.
Section
6.3 Hedging
Transactions. The Investor shall not (and will cause any
spouse or immediate family member of the Investor, or any affiliate of the
Investor or any of the foregoing persons not to), directly or indirectly, grant
any option to sell, engage in any short sale or enter into any other transaction
with respect to securities of the Company, or publicly announce an intention to
do any of the foregoing, for a period commencing on the date hereof and
continuing through the close of trading on the date on which payment in full of
all amounts owing on the Convertible Note is made. For purposes of
this Section 6.3, “affiliate” means, with respect to a specified person, a
person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, the person specified.
C.G.
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D.H.
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Section
6.4 Publicity. Unless required
to do so by law, neither the Company nor the Investor shall issue any press
release or other public statement relating to this Agreement or the transactions
contemplated hereby without the prior approval of the other
parties.
Section
6.5 Costs and
Expenses. Each party shall
pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery and performance of the Agreement.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Governing
Law. This Agreement
shall be construed in accordance with and governed by the laws of the State of
Delaware (without giving effect to any conflicts or choice of law provisions
that would cause the application of the domestic substantive laws of any other
jurisdiction). None of the parties hereto has agreed with or
represented to any other party that the provisions of this section will not be
fully enforced in all instances.
Section
7.2 Waiver of
Jury Trial. Each of the
parties hereto hereby voluntarily and irrevocably waives trial by jury in any
action or other proceeding brought in connection with this agreement or any of
the transactions contemplated hereby. No party has agreed with or
represented to any other party that the provisions of this section will not be
fully enforced in all instances.
Section
7.3 Prevailing
Party’s Costs and Expenses. The prevailing
party in any mediation, arbitration or legal action to enforce or interpret this
Agreement shall be entitled to recover from the non-prevailing party all costs
and expenses, including reasonable attorneys’ fees, incurred in such action or
proceeding.
Section
7.4 Cumulative
Remedies; Failure to Pursue Remedies. The rights and
remedies provided by this Agreement are cumulative and the use of any one right
or remedy by any party shall not preclude or waive its right to use any or all
other remedies. Said rights and remedies are given in addition to any
other rights the parties may have by law, statute, ordinance or
otherwise. Except where a time period is specified, no delay on the
part of any party in the exercise of any right, power, privilege or remedy
hereunder shall operate as a waiver thereof, nor shall any exercise or partial
exercise of any such right, power, privilege or remedy preclude any further
exercise thereof or the exercise of any other right, power, privilege or
remedy.
Section
7.5 Equitable
Remedies. The parties
hereto agree that irreparable harm would occur in the event that any of the
agreements and provisions of this Agreement were not performed fully by the
parties hereto in accordance with their specific terms or conditions or were
otherwise breached, and that money damages are an inadequate remedy for breach
of the Agreement because of the difficulty of ascertaining and quantifying the
amount of damage that will be suffered by the parties hereto in the event that
this Agreement is not performed in accordance with its terms or conditions or is
otherwise breached. It is accordingly hereby agreed that the parties
hereto shall be entitled to an injunction or injunctions to restrain, enjoin and
prevent breaches of this Agreement by the other parties and to enforce
specifically such terms and provisions of this Agreement, such remedy being in
addition to and not in lieu of, any other rights and remedies to which the other
parties are entitled to at law or in equity.
C.G.
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D.H.
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Section
7.6 Amendment
and Waiver . No provision of
this Agreement may be amended, modified or waived except upon the written
consent of the Company and the Investor. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
Section
7.7 Assignment;
Binding Effect. The rights and
obligations set forth herein may not be assigned or delegated by the Company or
the Investor without the prior written consent of the others. This
Agreement shall be binding upon and inure to the benefit of all of the parties
and, to the extent permitted by this Agreement, their successors, legal
representatives and permitted assigns.
Section
7.8 Notices. Except as
otherwise expressly provided herein, all demands, notices, requests, consents
and other communications required or permitted under this Agreement shall be in
writing and shall be personally delivered or sent by facsimile machine (with a
confirmation copy sent by one of the other methods authorized in this section),
commercial (including Federal Express) or U.S. Postal Service overnight delivery
service, or deposited with the U.S. Postal Service mailed first class,
registered or certified mail, postage prepaid, as follows:
(a) if
to the Company, to:
Zanett,
Inc.
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attention:
Xxxxxxx Xxxxxxxx
with a
copy (which copy shall not constitute notice) to:
Drinker
Xxxxxx & Xxxxx LLP
One Xxxxx
Square
00xx &
Xxxxxx Xxxxxxx
Xxxxxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
(b) if
to the Investor, to the address on file with the Company.
Notices
shall be deemed given upon the earlier to occur of (i) receipt by the party to
whom such notice is directed; (ii) if sent by facsimile machine, the day (other
than a Saturday, Sunday or legal holiday in the jurisdiction to which such
notice is directed) such notice is sent if sent (as evidenced by the facsimile
confirmed receipt) prior to 5:00 p.m. U.S. Eastern Time, or the day (other than
a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) after which such notice is sent if sent after 5:00 p.m. U.S. Eastern
Time; (iii) if sent by overnight delivery service, the first business day
(other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such notice is directed) following the day the same is deposited with the
commercial carrier or U.S. Postal Service; or (iv) if sent by first class mail,
registered or certified, postage prepaid, the fifth day (other than a Saturday,
Sunday or legal holiday in the jurisdiction to which such notice is directed)
following the day the same is deposited with the U.S. Postal
Service. Each party, by notice duly given in accordance herewith, may
specify a different address for the giving of any notice hereunder.
C.G.
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D.H.
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Section
7.9 Severability. If any term or
provision of this Agreement, or the application thereof to any person or
circumstance, shall, to any extent, be invalid or unenforceable, the remainder
of this Agreement, or application to other persons or circumstances, shall not
be affected thereby, and each term and provision of this Agreement shall be
enforced to the fullest extent permitted by law.
Section
7.10 Survival. The
representations and warranties made herein and in other documents delivered
pursuant hereto shall survive the closing of the transactions contemplated
hereby for a period of 12 months. The covenants and agreements made
herein and in other documents delivered pursuant hereto shall survive the
closing of the transactions contemplated hereby
indefinitely. Anything in this Agreement to the contrary
notwithstanding, the representations and warranties of the Company hereunder
shall not be affected by any investigation of the Company made by the Investor
or their respective agents or representatives.
Section
7.11 Construction. Whenever the
context requires, the gender of any word used in this Agreement includes the
masculine, feminine or neuter, and the number of any word includes the singular
or plural. Unless the context otherwise requires, all references to
articles and sections refer to articles and sections of this Agreement, and all
references to schedules are to schedules attached hereto, each of which is made
a part hereof for all purposes.
Section
7.12 Headings. The headings and
subheadings in this Agreement are included for convenience and identification
only and are in no way intended to describe, interpret, define or limit the
scope, extent or intent of this Agreement or any provision hereof.
Section
7.13 Counterparts. This Agreement
may be executed in any number of counterparts with the same effect as if all
parties hereto had signed the same document, and all counterparts shall be
construed together and shall constitute one instrument. A facsimile
or photocopied signature shall be deemed to be the functional equivalent of an
original for all purposes.
Section
7.14 Entire
Agreement. This Agreement,
the Company Convertible Debt and the Convertible Note relating thereto, the
Transaction Approval Agreement, the Voting Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement among the parties hereto pertaining to the subject matter hereof and
supersede all prior understandings and agreements pertaining thereto, whether
oral or written.
Section
7.15 Further
Assurances. Each party hereto
shall use its reasonable best efforts to comply with all requirements imposed
hereby on such party and to cause the transactions contemplated hereby and by
the other agreements contemplated herein to be consummated as contemplated
hereby or thereby and shall, from time to time and without further
consideration, either before or after the Closing Date, execute such further
instruments and take such other actions as any other party hereto shall
reasonably request in order to fulfill its obligations under this Agreement and
such other agreements, to effectuate the purposes of this Agreement and such
other agreements.
[Signature
Page Follows]
C.G.
______
D.H.
______
12
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above
stated.
| COMPANY: | |
|
ZANETT,
INC.
|
|
|
By:
|
|
|
Name: Xxxxxxx
X. Xxxxxxxx
Title: Chief
Executive Officer
|
|
|
INVESTOR:
ROCKPORT
INVESTMENTS LTD.
|
|
|
By:
|
|
|
Name:
Title:
|
|
[Signature
Page to Term Debt – Convertible Debt Exchange Agreement]
C.G.
______
D.H.
______
13
EXHIBIT
A
Transaction
Approval Agreement
C.G.
______
D.H.
______
14
EXHIBIT
B
Voting
Agreement
C.G.
______
D.H.
______
15
