Exhibit 10.78
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EXECUTION COPY
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NOTE PURCHASE AGREEMENT
This Note Purchase Agreement (the "AGREEMENT"), dated as of September
4, 2003, is by and among SCP Private Equity Partners II, L.P. ("SELLER") and
WCORP, Inc. ("PURCHASER"), a wholly owned subsidiary of Insci Corp. ("Insci").
W I T N E S S E T H:
WHEREAS, the Seller is the holder of certain Demand Promissory Notes
set forth on Schedule I attached hereto in the aggregate amount of $1,500,000
("Notes") made by Webware Corporation ("Webware"), all of which are secured by a
lien upon all the assets of Webware, as provided in the Notes; and
WHEREAS, Purchaser wishes to purchase the Notes from the Seller on
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree as follows:
ARTICLE 1
THE NOTE
SECTION 1.1 SALE AND PURCHASE OF THE NOTE. Upon satisfaction of the
conditions precedent set forth hereinafter, Seller agrees to sell the Notes to
Purchaser, and Purchaser agrees to purchase the Notes from Seller.
SECTION 1.2 PURCHASE PRICE. The purchase price for the Notes shall be
$15,000 cash ("Cash Purchase Price").
SECTION 1.3 CLOSING. The closing of the purchase and sale of the
Notes (the "Closing") shall be held at Xxxxxxxx 000, 000 Xxxxx Xxxx Drive,
Xxxxx, PA, or at any other place and at such time after satisfaction of the
conditions precedent set forth hereinafter to which the Seller and the Purchaser
may agree. At the Closing, the Seller will cause the Notes, duly endorsed, to be
delivered to the Purchaser against payment of the Cash Purchase Price to the
Seller by wire transfer of immediately available funds to such account as the
Seller may specify in writing.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER
Seller represents and warrants to the Purchaser as follows:
SECTION 2.1 TITLE TO NOTE/ OUTSTANDING BALANCE UNDER NOTE. Seller
holds the Notes free and clear of any and all liens, security interests or
pledges of any kind ("Liens"). No payment has been received by Seller on account
of the principal or accrued interest under any of the Notes.
SECTION 2.2 POWER AND AUTHORITY OF SELLER. Seller has all requisite
power and authority to execute, deliver and perform this Agreement and to
endorse and deliver the Notes and to consummate the transactions contemplated
hereby. This Agreement has been duly and validly authorized, executed and
delivered by Seller and constitutes the valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except to the extent
that such enforceability (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and (ii) is subject to general principles of equity.
SECTION 2.3 ABSENCE OF CONFLICTING AGREEMENTS. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, do not, with or without the giving of notice,
the lapse of time or both: (i) contravene or conflict with, or constitute a
violation of, any judgment, injunction, order or decree binding upon or
applicable to Seller, (ii) conflict with, or constitute a violation of, any
agreement to which Seller is a party or by which Seller is bound, or (iii)
result in the creation or imposition of any Lien on any of the Notes.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Seller as follows:
SECTION 3.1 INVESTMENT PURPOSE. The Notes will be acquired for
investment for Purchaser's own account, not as a nominee or agent, and not with
a view to the resale or distribution of any part thereof, and Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same.
SECTION 3.2 POWER AND AUTHORITY. Purchaser has all requisite power
and authority to execute, deliver and perform this Agreement and to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by Purchaser and constitutes the valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except to the extent that such enforceability (i) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally and (ii) is subject to general principles of equity.
SECTION 3.5 ABSENCE OF CONFLICTING AGREEMENTS. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, do not, with or without the giving of notice,
the lapse of time or both: (i) contravene or conflict with, or constitute a
violation of, any judgment, injunction, order or decree binding upon or
applicable to Purchaser or Insci, (ii) require any consent, approval or other
action by any third party, or (iii) contravene or conflict with, or constitute a
violation of, any agreement to which Purchaser or Insci is a party or by which
Purchaser or Insci is bound.
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ARTICLE 4.
COVENANTS OF THE PARTIES
SECTION 4.1 FURTHER ASSURANCES. At any time or from time to time
after the Closing, the Seller and Purchaser shall, at the reasonable request and
expense of the other party or its counsel, execute and deliver any further
instruments or documents and take all such further action in order to evidence
or otherwise facilitate the consummation of the transactions contemplated
hereby.
SECTION 4.2 NO OTHER REPRESENTATIONS OR WARRANTIES. Except as set
forth in this Agreement, no party is making, or is relying on, any express or
implied representations or warranties relating to any party or to the
consummation of the transactions contemplated hereby. Purchaser is making its
decision to consummate the purchase of the Notes described herein on the basis
of its due diligence investigation of Webware and not on any representation,
warranty, statement or information made or communicated (orally or in writing)
by Seller or any affiliate, representative or agent thereof, other than as set
forth in this Agreement. The representations and warranties made by Seller and
Purchaser in Article 2 and 3, respectively, shall survive the Closing and the
delivery of the Notes.
SECTION 4.3 CONFIDENTIALITY. Purchaser agrees to keep this Agreement
and its terms in strict confidence and will not publish, disclose, communicate,
or otherwise in any way make known to others (whether persons or entities) the
nature, terms, or specifics of this Agreement or the claims or negotiations
resulting in this Agreement; provided, however, that non-disclosure obligations
set forth herein shall not apply to the extent that Purchaser is required by law
to disclose any such information, including any required SEC filings by Insci.
ARTICLE 5
CONDITIONS TO CLOSING
SECTION 5.1 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller under this Agreement are subject to the satisfaction, at or before
Closing, of the following conditions:
(i) The Diablo Management Group as Assignee for Benefit of Creditors
("ABC") from Webware has agreed to the treatment of Seller's secured
claim against Webware as set forth in the Term Sheet dated August __,
2003 between Seller and Insci attached hereto as Exhibit A ("Insci
Term Sheet"), and to the payment of $____________ ("Cash
Consideration") directly by Insci to Seller as set forth therein; and
(ii) As of the 151st day after the general assignment contemplated in
the term sheet between Insci and ABC dated August __, 2003 attached
hereto as Exhibit B ("ABC Term Sheet"), neither: (a) a voluntary or
involuntary petition for relief under the United States Bankruptcy
Code has been filed with respect to Webware, its assigns or
successors; nor (b) any litigation has been commenced by any of the
creditors of Webware against the
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ABC, Seller, Webware, Insci or Purchaser, or by anyone to restrain or
prohibit the consummation of the transactions contemplated under the
Insci Term Sheet or the ABC Term Sheet ; and there shall be no
effective court order restraining or prohibiting the consummation of
any of the transactions contemplated thereby;
(iii) Purchaser has delivered to Seller shares in Insci with an
aggregate value of $_________; and Seller has received the Cash
Consideration and the Cash Purchase Price from Purchaser; and
(iv)The representations and warranties of Purchaser shall be true and
correct in all material respects and if so requested, Seller shall
have received a certificate, executed by an officer of the Purchaser,
dated as of the Closing, to the foregoing effect and as to such other
matters as may be reasonably requested by Seller.
SECTION 5.2 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations
of Purchaser under this Agreement are subject to the satisfaction at Closing, of
the following conditions:
(i)The representations and warranties of Seller shall be true and
correct in all material respects and if so requested, Purchaser shall
have received a certificate, executed by an principal of the Seller,
dated as of the Closing, to the foregoing effect; and
(ii)Seller shall tender the Notes, duly endorsed to Purchaser.
ARTICLE 6
MISCELLANEOUS
SECTION 6.1 EXPENSES. Each party hereto shall pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated.
SECTION 6.2 NOTICES. All notices, requests, demands, waivers and
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (i) delivered
personally, (ii) mailed, certified or registered mail, with postage prepaid or
(iii) sent by next-day or overnight mail or delivery or sent by telecopy, as
follows:
(a) if to Seller, to: SCP Private Equity Partners II, L.P.
Building 300
000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax: 000-000-0000
(b) if to the Purchaser, to:
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (i) if by personal delivery on the day
after such delivery, (ii) if by certified
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or registered mail, on the third business day after the mailing thereof, (iii)
if by next-day or overnight mail or delivery, on the day delivered and (iv) if
by telecopy, on the next day following the day on which such telecopy was sent,
provided that a copy is also sent by certified or registered mail.
SECTION 6.3 GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of Pennsylvania
applicable to agreements made and to be performed wholly within such
jurisdiction.
SECTION 6.4 BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party hereto may assign either this
Agreement or any of its rights, interests or obligations hereunder without the
prior written approval of each of the other parties hereto.
SECTION 6.5 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement
shall confer any rights upon any person or entity other than the parties hereto
and their respective successors and permitted assigns.
SECTION 6.6 AMENDMENT; WAIVERS, ETC. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge or waiver is sought. Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party
granting such waiver in any other respect or at any other time. Neither the
waiver by any of the parties hereto of a breach of or a default under any of the
provisions of this Agreement, nor the failure by any of the parties, on one or
more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any
other breach or default of a similar nature, or as a waiver of any of such
provisions, rights or privileges hereunder.
SECTION 6.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
SECTION 6.8 COUNTERPARTS; FACSIMILE. This Agreement may be executed
in several counterparts, each of which shall be deemed an original and all of
which shall together constitute one and the same instrument. The reproduction of
signatures by means of telecopying device shall be treated as though such
reproductions are executed originals.
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IN WITNESS WHEREOF, Purchaser and the Sellers have caused this Agreement to be
executed and delivered by the undersigned duly authorized officers as of the day
and year first above written.
PURCHASER: SELLER:
WCORP, Inc. SCP Private Equity Partners II, L.P.
By: SCP Private Equity II General Partner, L.P.
By: SCP Private Equity II, LLC
By: /S/ XXXXX X. XXXXXX By: ____________________
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Name: Xxxxx X. Xxxxxx Name: ____________________
Title: Chief Executive Officer Title: ____________________
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SCHEDULE I
DATE OF NOTE AMOUNT OF NOTE
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August 19, 2002 $1,000,000
May 28, 2003 $ 300,000
September 13, 2002 $ 200,000
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