Exhibit 10.15
SECURITIES PURCHASE AGREEMENT
Dated as of May 12, 2006
among
NETWOLVES CORPORATION
AND
THE INVESTORS NAMED HEREIN
SECURITIES PURCHASE AGREEMENT
Securities Purchase Agreement (the "Purchase Agreement", or the "Agreement")
dated as of May 12, 2006, among NETWOLVES CORPORATION, a New York corporation
(the "Company"), and the investors listed on the signature pages hereto (each an
"Investor" and collectively, the "Investors").
WHEREAS, the Company desired to sell (a) 18% senior secured promissory
notes in the principal amount of up to $665,000 (the "April Notes"), in the form
attached as Exhibit A hereto, and (b) up to 700,000 shares ("Shares") of the
Company's common stock, $0.0033 par value per share (the "Common Stock") at a
price of $0.05 per share or 100 shares for each $95.00 of principal amount of
April Notes sold, pursuant to the provisions of this Agreement; and the
Investors desire to purchase from the Company and Company desires to sell the
April Notes and the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties do hereby
agree as follows:
In consideration for the premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliate" of any Person means (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director or officer or member or partner
(i) of such Person or (ii) of any Person described in clause (a) above. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
applied to any Person, means either (x) the power, directly or indirectly, to
vote 10% or more of the securities having ordinary voting power for the election
of directors (or persons performing similar functions) of such Person, or (y)
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise.
"Aggregate Amount" has the meaning set out in Section 2.03(a).
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"Agreement" means this Purchase Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Business Day" means a day other than Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Change In Control" with respect to a Person means (i) the sale, transfer
or other disposition of all or substantially all of such Person or (ii) any
merger or consolidation of such Person with or into another Person or any other
corporate reorganization (including any sale of equity interests representing
50% or more of the voting power of the outstanding equity interests of such
Person), if Persons who were not holders of 50% or more of the outstanding
equity interests of such Person immediately prior to such proposed merger,
consolidation or other reorganization would own immediately after such proposed
merger, consolidation or the reorganization more than 50% of the voting power of
the outstanding equity interests of such Person.
"Closing" has the meaning specified in Section 2.01(b).
"Collateral" has the meaning specified in the Security Agreement.
"Common Stock" means the common stock of the Company.
"Copyrights" has the meaning set forth in the definition of "Intellectual
Property."
"Current Account Receivable" shall mean, with respect to the Company and
its Subsidiaries on a consolidated basis, the amount of accounts receivables of
the Company and its Subsidiaries calculated in accordance with GAAP which are
less than sixty (60) days past due.
"Debt" of any Person at any date means (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property or services
(other than trade liabilities incurred for goods and services used in the
ordinary course of business and payable in accordance with customary practices),
(b) any other indebtedness of such Person which is evidenced by a note, bond,
debenture or other similar instrument, (c) all obligations of such Person under
Purchase Leases, (d) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, and (e) all liabilities
secured by any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof.
"Default" means any event or condition that, with notice or lapse of time
or both, would become an Event of Default.
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
technical standards, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any governmental authority,
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relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any hazardous
material or to health and safety matters.
"Event of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Purchase Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Governing Documents" shall mean (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) any charter, certificate of
formation or similar document adopted or filed in connection with the creation,
formation or organization of any other entity and any operating agreement,
management agreement or similar document or an entity; and (c) any amendment or
supplement to any of the foregoing.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Indemnified Party" has the meaning specified in Section 8.05(a).
"Intellectual Property" means (i) inventions (whether patentable or
unpatentable and whether or not reduced to practice), and all improvements
thereto; (ii) all patents, patent applications and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions, and
extensions thereof (collectively, "Patents"); (iii) trademarks, service marks,
logos, trade names and corporate names, together with all translations,
adaptations, derivations and combinations thereof, and all applications,
registrations and renewals in connection therewith (collectively, "Trademarks"),
(iv) copyrightable works, all copyrights and all registrations, registration
applications and renewals in connection therewith and mask works and all
registrations, registration applications and renewals in connection therewith
(collectively, "Copyrights"); (v) proprietary computer software and programs
(including object code and source code) and other proprietary rights and copies
and tangible embodiments thereof (in whatever form or medium); (vi) proprietary
database technologies, systems, structures and architectures (and related
processes, formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information) and any other
related information, however documented; (vii) all industrial designs and any
registrations and applications therefor; (viii) all Trade Secrets and Other
Proprietary Information and (ix) any similar or equivalent rights to any of the
foregoing anywhere in the world.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued hereunder.
"Investors" has the meaning set out in the Recitals to this Agreement.
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"Lien" means any lien, charge, claim, mortgage, security interest or other
charge or encumbrance of any kind, or any other type of preferential
arrangement, upon or with respect to any property, including any title retention
agreement or any leases in the nature thereof and any easement, right of way or
other encumbrance on title to real property.
"Transaction Documents" means this Agreement, the Security Agreement, the
April Notes and any additional agreements executed by the parties after the date
hereof in order to perfect or continue the perfection of a security interest
granted under the Security Agreement and the Registration Rights Agreement.
"Material Adverse Effect" means (I) with respect to the Company, (a) a
material adverse effect on the business, operations, properties or condition
(financial or otherwise) or prospects of the Company, (b) the inability of the
Company to perform any of its obligations hereunder or under any of the other
Transaction Documents to which it is a party, or (c) an adverse effect on the
validity or enforceability of this Agreement or any other Transaction Document
or the rights or remedies of the Investor hereunder or thereunder; and (II) with
respect to a Person other than the Company, a material adverse effect on the
business, operations, properties or condition (financial or otherwise) or
prospects of such Person or any Affiliates of such Person.
"Maturity Date" means, with respect to the April Notes, the earliest to
occur of: (a) the date that is eighteen (18) months following the Closing; (b)
the accelerated date or dates on which the Company achieves certain net income
as set forth in this Agreement; or (c) the date on which an Event of Default
occurs.
"April Notes" means the secured promissory notes of the Company payable to
the order of the Investors in the aggregate principal amount or up to $665,000 ,
in substantially the form of Exhibit A hereto, evidencing the indebtedness of
the Company to the Investors under the transactions made by the Investors to the
Company hereunder.
"Patents" has the meaning set forth in the definition of "Intellectual
Property."
"Permitted Debt" means any Debt that ranks junior in priority to the April
Notes in all respects.
"Permitted Liens" means Liens that have received the express prior written
approval of all the Investors, which Investors may withhold or provide in their
sole and absolute discretion, including liens recorded in connection with the
$403,750 Principal Amount of Promissory Notes issued in March 2006.
"Person" means an individual, corporation, partnership, business trust,
joint venture, association, joint stock company, trust, unincorporated
organization, joint venture, limited liability company or other entity, or a
government or any agency or political subdivision thereof.
"Registration Rights Agreement" means that certain registration rights
agreement, dated as of even date herewith, between the Company and the Investor,
in the form attached hereto as Exhibit C.
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"Securities Act" means the US Securities Act of 1933, as amended.
"Security Agreement" means that certain security agreement, dated as of
even date herewith, by and between the Company and the Investors, in the form
attached hereto as Exhibit B.
"Subsidiary" means any corporation or other legal entity of which the
Company (either alone or through or together with any other Subsidiary or
Subsidiaries) is the general partner or managing entity or of which 50% or more
of the Capital Stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or others
performing similar functions of such corporation or other legal entity is
directly or indirectly owned or controlled by the Company (either alone or
through or together with any other Subsidiary or Subsidiaries), including
without limitation.
"Tax Returns" has the meaning specified in Section 4.01(f).
"Trademarks" has the meaning set forth in the definition of "Intellectual
Property."
"Trade Secrets and Other Proprietary Information" means (i) trade secrets
and confidential business information (including without limitation, product
specifications, data, know-how, inventions and ideas, past, current and planned
research and development, customer lists, current and anticipated customer
requirements, price lists, market studies and business plans); (ii) any and all
information concerning the business and affairs of a person (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel and personnel training and techniques and
materials), however documented; (iii) any and all notes, analyses, compilations,
studies, summaries, and other material prepared by or for a person containing or
based, in whole or in part, on any information included in the foregoing,
however documented; and (iv) all databases and data collections and all rights
therein.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock of which shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
Section 1.03 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with U.S. generally accepted
accounting principles ("GAAP").
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ARTICLE II
PURCHASE AND SALE OF APRIL NOTES AND SHARES
Section 2.01 Purchase and Sale.
(a) Commitment. On the terms and subject to the conditions contained in
this Agreement, in reliance upon the representations and warranties of the
Company set forth herein and in the other Transaction Documents to which it is a
party, the Investors agree to purchase at the Closing (as hereafter defined),
and the Company agrees to issue and sell to the Investors at the Closing, the
amount of April Notes and the number of Shares set forth opposite each
Investor's name on the signature pages hereto, for an aggregate purchase price
equal to the sum of the principal amount of the April Notes and the number of
Shares purchased at a price of $.05 per Share s (the "Purchase Price").
(b) Closing. Subject in any and all events to the satisfaction in full of
the conditions set forth in Article III hereof, as of the Closing (as defined
below), the Company shall deliver to the Investors, the April Note and the
Shares, against payment of the Purchase Price to the Company. Except as may
otherwise be consented to by the Company, the minimum purchase for each Investor
shall be $50,000 consisting of a $45,000 April Note, and 50,000 Shares.
The closing of the purchase and sale of $700,000 principal amount of
funding, inclusive of the April Note and Stock purchase under this Agreement
(the "Closing") shall be held at the offices of Company (or remotely via the
exchange of documents and signatures), on or before April ___, 2006.
For purposes of this Agreement, the terms "Closing" and "Closing Date",
unless otherwise indicated, refer to the applicable closing and closing date.
(c) Note. The April Notes will be deemed subject to this Agreement upon
their issuance. Any and all payments hereunder shall be made in United States
dollars in immediately available funds.
(d) Seniority. The April Notes, together with $403,750 principal amount of
Notes issued in March 2006 ("March Notes") shall be the senior indebtedness of
the Company. Without the prior written consent of all of the Investors, and all
of the investors in the March Notes, which may be withheld or provided in each
person's sole and absolute discretion, the Company shall not incur nor suffer to
exist any indebtedness other than Permitted Debt. All Permitted Debt shall rank
junior in priority, in all respects, to the April Notes and March Notes and the
security interests of Investors granted pursuant to the Security Agreement in
connection therewith, in accordance with this Agreement and the transactions
contemplated hereby.
Section 2.02 Interest.
(a) Interest. The April Notes shall bear interest on the unpaid principal
amount thereof from the date of the Closing to the date repaid in full at a
monthly percentage rate equal to 18% per annum payable in arrears on a monthly
basis commencing June 1, 2006. Interest shall be computed on the basis of a
360-day year of twelve 30-day months for the actual number of days elapsed.
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Section 2.03 Repayment.
(a) Maturity Date Repayment. On the Maturity Date, the Company shall be
liable to pay to the Investors the aggregate outstanding principal amount of the
April Notes, together with all interest accrued thereon (such outstanding
principal amount, together with such accrued interest, being called the
"Aggregate Amount"), together with all other amounts in respect of the April
Notes then owing to the Investor hereunder and under the other Transaction
Documents, whether for costs and expenses or otherwise, as limited by Section
8.13.
(b) Prepayment. (i) The Company shall have the right to prepay the April
Notes on or after September 1, 2006 at 105% of the principal amount together
with accrued interest; (ii) each Investors shall have the right to demand full
payment of its respective April Note in the event (x) Company reports net income
before taxes of at least $500,000 in any calendar quarter, or (y) Company's
default hereunder or under the April Notes.
Section 2.04 Security Agreement. As security for, among other things, the
Company's obligations under this Agreement, the April Notes and each of the
other Transaction Documents to which the Company is a party, the Company shall
at the Closing enter into the Security Agreement and grant to the Investors,
perfected security interest in the Collateral (as such term is defined in the
Security Agreement) which shall rank in priority pari passu to the March 2006
Notes, and shall include, but shall not be limited to, the Intellectual Property
of the Company.
ARTICLE III
CONDITIONS OF INVESTOR OBLIGATIONS AT CLOSING
Section 3.01 Conditions Precedent to the Closing. The obligations of the
Investors under subsection 1.1 of this Agreement is subject to the fulfillment
on or before the Closing of each of the following conditions:
(a) Transaction Documents and Shares Delivered. The Company shall have duly
executed and delivered the Transaction Documents to which it is a party and all
documents contemplated hereby and thereby, and delivered signed stock
certificates representing the Shares.
(b) Additional Documents Delivered. The Company shall have duly executed
and delivered to the Investors the following documents, each dated the date of
the Closing (unless otherwise provided herein), in form and substance
satisfactory to the Investors:
(i) Copies of the resolutions of the Board of Directors of the
Company, which resolutions, among other things, authorize the
execution and delivery by the Company of, and the performance by the
Company under this Agreement and the other Transaction Documents to
which it is a party and the consummation of the transactions
contemplated hereby and thereby, and the issuance of the Shares.
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(ii) Copies of all documents and instruments, including all
authorizations, consents and approvals of, evidence of all other
actions by, and notices and filings with, all governmental authorities
and regulatory bodies or other Persons to which the Company has
contractual, legal or regulatory obligations as shall be required for
the consummation of, and the execution and delivery of, the
Transaction Documents to which it is a party and the transactions
contemplated hereby and thereby, and the issuance of the Shares.
(iii) Copies of the Governing Documents of the Company, certified as
of a recent date prior to the Closing by an officer of the Company.
(iv) A certificate of the Company, signed by an officer of the Company
(the statements made in which certificate shall be true on and as of
the Closing), certifying: (A) the truth in all material respects of
the representations and warranties made by the Company in the
Transaction Documents to which it is a party; (B) the absence of any
event occurring and continuing, or resulting from the Transaction or
the application of the proceeds therefrom, that constitutes or could
constitute a Default or an Event of Default; and (C) the satisfaction
of all conditions precedent by the Company to the obligations of the
Investors to purchase the April Notes and the Shares.
(v) A signed copy of a certificate of the Secretary or an officer of
the Company certifying the names and true signatures of the officers
of the Company authorized to sign each Transaction Document to which
the Company is a party, and the other documents to be delivered
hereunder and thereunder.
(vi) Such other approvals, opinions or documents as the Investors may
reasonably request.
(c) Security Interest Perfected. The Company shall have taken or caused to
be taken such actions as may be necessary or desirable so that the Investors
have, together with the March Note holders, a valid and perfected, first
priority security interest in the Collateral, as such term is defined in the
Security Agreement including, but not limited to, the intellectual property of
the Company.
(d) No Event of Default. As of the Closing Date no event shall have
occurred or be continuing or could reasonably be expected to result from the
Transaction or from the application of the proceeds therefrom, that could
constitute a Default or an Event of Default.
(e) Absence of Material Change. As of the Closing Date, there has been no
event that has caused or may cause a Material Adverse Effect on the Company
since the date of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties. The Company hereby represents
and warrants that, at the date of this Agreement:
(a) Due Incorporation, Etc. The Company is a company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has full corporate power and corporate authority to own, lease
and operate its property and assets and to conduct its business as presently
conducted and as proposed to be conducted by it. The Company has full corporate
power and corporate authority to enter into and perform its obligations under
the Transaction Documents, to issue the Shares and to carry out the transactions
contemplated by the Transaction Documents. 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 business and its ownership or
leasing of property makes such qualification necessary.
(b) Enforceability: No Conflict. Each of the Transaction Documents
constitutes a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to laws of general application applying to
the Company and relating to bankruptcy, insolvency, and the relief of debtors
and rules of law applying to the Company and governing specific performance,
injunctive relief and other equitable remedies. Neither the execution and
delivery of any Transaction Document to which the Company is a party, nor the
performance by the Company of its obligations thereunder nor the issuance of the
Shares, (i) will conflict with or result in a breach of, or constitute a default
under the Company's Governing Documents or any other document to which Company
or its Affiliates is a party, or (ii) will conflict with or result in a breach
of, or constitute a default under or result in the creation or imposition of any
Lien upon any of the property or assets of the Company under any applicable law,
rule, governmental regulation, judgment, decree, indenture, mortgage, deed of
trust or other instrument or agreement to which the Company or any of its
Affiliates may be or become a party or by which it may be or become bound.
(c) Litigation. There is no pending or, to the Company's knowledge,
threatened litigation, investigation, action or proceeding of or before any
court, arbitrator or governmental agency (i) which purports to affect the
legality, validity or enforceability of any Transaction Document or (ii) that
could have a Material Adverse Effect against (a) the Company or any of its
officers, directors or employees (in their capacity as such) or (b) any of the
properties of the Company. The Company is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
governmental agency or instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending which is likely to have a
Material Adverse Effect.
(d) Capitalization and Voting Rights. The number of authorized, issued and
outstanding capital stock of the Company is set forth in the Company's publicly
available filings with the Securities and Exchange Commission. Except as
disclosed therein, no securities of the Company or any Subsidiary are entitled
to preemptive or similar rights, nor is any holder of securities of the Company
or any Subsidiary entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company or any Subsidiary by virtue of any
of the Transaction Documents. Except as disclosed therein, there are no
outstanding options, warrants, script rights to subscribe to, calls or
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commitments of any character whatsoever relating to, or securities, except as a
result of the purchase and sale of the Securities, or rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock.
(e) Valid Issuance of April Notes and Shares. The April Note and the Shares
being purchased by the Investors hereunder, when issued, sold, and delivered in
accordance with the terms hereof for the consideration provided for herein, will
be duly and validly issued, and, in the case of the Shares, fully paid and
non-assessable and, based in part upon the representations of the Investors in
this Agreement, will be issued in compliance with all applicable federal and
state securities laws.
(f) No Violation. The Company is not in violation of, nor does the
execution of any of the Transaction Documents by the Company or the consummation
of the transactions contemplated hereby or thereby result in the violation of,
(i) any term of the Company's Governing Documents or (ii) any term of any
agreement or instrument to which the Company is a party or by which any are
bound in any respect which has or could be reasonably expected to have a
Material Adverse Effect.
(g) Taxes. The Company has accurately prepared and timely filed all
federal, state local and foreign reports, returns, estimates, declarations,
information returns and statements with respect to income taxes (together, "Tax
Returns") that are required to be filed by it and has paid or made provision for
the payment of all such taxes due with respect to the periods covered by such
Tax Returns, in all material respects. No such Tax Returns of the Company have
been audited by any taxing authority, and there are no waivers in effect of the
applicable statute of limitations for any period. No deficiency assessment or
proposed adjustment of federal income taxes or state or municipal taxes of the
Company is pending and the Company has no knowledge of any proposed liability
for any tax to be imposed on the Company. For the purpose of this Section
4.01(f), "tax" or "taxes" shall mean all federal, state, local or foreign taxes,
including but not limited to income, gross receipts, windfall profits,
alternative minimum, value added, severance, property, production, sales, use,
license, excise, franchise, employment, withholding or similar taxes, together
with any interest, additions or penalties with respect thereto and any interest
in respect of such additions or penalties.
(h) Security Interest Generally. The Security Agreement is effective to
create, and with the delivery of the Collateral will create, when filed in the
appropriate jurisdiction, in favor of the Investors, a legal, valid and
enforceable first priority perfected security interest in the Collateral.
(i) Financial Condition
(i) The unaudited financial statements of Company for the six months
ended December 31, 2006 as filed with the Securities and Exchange
Commission are complete and correct in all material respects and present
fairly the consolidated financial position and condition of Company at such
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date. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods disclosed therein. There are no
liabilities or obligations as of such date not disclosed therein.
(ii) Since December 31, 2006, there has been no change in the
financial position or condition of the Company, nor any development or
event which has had or could reasonably be expected to have a Material
Adverse Effect, except that Company has continued to sustain net operating
losses through March 31, 2006..
(j) Title to Properties: Liens and Encumbrances. The Company (i) has good
and valid title to all of its owned properties and assets, both real and
personal, tangible and intangible, reflected on the Interim Financial
Statements, and such properties and assets are subject to no mortgage, pledge,
lien, security interest, conditional sale agreement, encumbrance or charge
except for Permitted Liens and routine statutory liens securing liabilities not
yet due and payable and minor liens, encumbrances, restrictions, exceptions,
reservations, limitations and other imperfections that do not materially detract
from the value of the assets as a whole or the present use of such assets, and
(ii) is not in default or in breach in any material respect of any material
leases or licenses, and holds a valid leasehold or licensed interest in the
material property it leases or that is licensed to it.
(k) Intellectual Property Rights
(i) Ownership and Other Rights; Sufficiency of Intellectual Property
Assets. Company owns or possesses adequate licenses, re-marketing or
sublicensing rights, or other rights to use, free and clear of all Liens,
all of its Intellectual Property used in the conduct of Company's business
as presently conducted. Such Intellectual Property of Company constitutes
all the Intellectual Property rights material to the conduct of Company's
business as presently conducted and are all such Intellectual Property
rights necessary to operate such business after the Closing Date in
substantially the same manner as such business has been operated by Company
prior thereto.
(ii) No Pending or Threatened Infringement Claims. No litigation is
now pending and no notice or other claim in writing has been received by
Company, (A) alleging that Company has engaged in any activity or conduct
that infringes upon, violates or constitutes the unauthorized use of the
Intellectual Property rights of any third party or (B) challenging the
ownership, use, validity or enforceability of any Intellectual Property
owned or exclusively licensed by or to Company.
(iii) Actions to Protect Intellectual Property. The Company has taken
commercially reasonable steps to protect its rights in its Intellectual
Property and maintain the confidentiality of all of its confidential
information.
(l) Restricted Payments. The Company has not (i) except with respect to its
Preferred Stock, declared or paid any dividends or authorized or made any
distribution upon or with respect to any class or series of its Capital Stock,
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(ii) made any Transactions or advances to any Person, other than advances of
expenses to employees in the ordinary course of business, or (iii) sold,
exchanged or otherwise disposed of any of its assets or rights.
(m) Not a Guarantor. The Company is not a guarantor or indemnitor of any
indebtedness of any other Person.
(n) ERISA. Neither the Company nor any Subsidiary maintains, sponsors, or
contributes to any program or arrangement that is an "employee pension benefit
plan," an "employee welfare benefit plan" or a "multiemployer plan," as those
terms are defined in Sections 3(2), 3(1), and 3(37) of the Employee Retirement
Income Security Act of 1974, as amended.
(o) Governmental Consents. No consent, approval, order, or authorization
of, or registration, qualification, designation, declaration, or filing with,
any federal, state, local or foreign Governmental Authority to which the Company
is subject is required in connection with the consummation of the transactions
contemplated by this Agreement.
(p) Compliance. The Company has complied with the requirements of all
applicable laws, rules, regulations and orders of any Governmental Authority,
noncompliance with which, individually or in the aggregate with other
non-compliances, has had or could reasonably be expected to cause a Material
Adverse Effect on the Company. The Company possesses and is operating in
compliance with all licenses, certificates, consents, authorities, approvals and
permits from all state, federal, foreign and other regulatory agencies or bodies
necessary to conduct the business now operated by it except for any
nonpossession or noncompliance which has not had and could not reasonably be
expected to cause a Material Adverse Effect on the Company, and the Company has
not received any notice of proceedings relating to the revocation or
modification of any such permit or any circumstance which would lead it to
believe that such proceedings are reasonably likely which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, has had
or could reasonably be expected to cause a Material Adverse Effect on the
Company.
(q) Insurance. To the knowledge of the Company, the amount and types of
insurance carried by the Company, and the terms and conditions thereof, are
adequate for the Company's business and with respect to the transactions
contemplated hereby.
(r) Full Disclosure. This Agreement, the attached schedules and exhibits,
the other Transaction Documents and other documents called for hereby delivered
by the Company to the Investors or its attorneys or agents in connection
herewith or therewith or with the transactions contemplated hereby or thereby,
all taken together, do not contain any untrue statement of a material fact nor
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
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ARTICLE V
COVENANTS
Section 5.01 Affirmative Covenants. The Company covenants and agrees that,
so long as any amount is outstanding under any of the Transaction Documents, the
Company shall, unless waived by all the Investors in writing:
(a) Notice of Defaults. Promptly upon and in any event within 5 business
days after any executive officer of the Company obtaining knowledge thereof,
give notice to the Investors (i) of any development, including, without
limitation, any litigation, investigation or proceeding affecting the Company,
which has a Material Adverse Effect, could reasonably be expected to have a
Material Adverse Effect or, in the case of any litigation, investigation or
other proceeding, which could, if adversely decided, reasonably be expected to
have a Material Adverse Effect and (ii) of a Default or Event of Default under
this Agreement, each such notice being in the form of an officers' certificate,
signed by an executive officer of the Company, specifying, to the extent known
by the Company, the nature and period of existence of any such event.
(b) Corporate Existence. The Company shall at all times preserve and keep
in full force and effect its corporate existence and all of its material rights
and shall continue to conduct its business in the ordinary course.
(c) Maintenance of Properties; Insurance. The Company will maintain in good
repair, working order and condition, ordinary wear and tear excepted, all
material properties used or useful in the business of the Company and from time
to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof which it deems necessary in its reasonable business
judgment. The Company will maintain, with financially sound and reputable
insurers, insurance with respect to its properties and business against loss or
damage of the kinds and with respect to liability customarily carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses.
(d) Compliance with Laws. The Company shall comply with the requirements of
all applicable laws, rules, regulations and orders of any Governmental
Authority, noncompliance with which, individually or in the aggregate with other
non-compliances, could reasonably be expected to cause a Material Adverse Effect
on the Company.
(e) Monthly Receivables Certificate. Within ten (10) days following the end
of each calendar month, furnish to each Investor a certificate of its chief
financial officer that, as of the end of the preceding calendar month, the
Current Accounts Receivable exceeded $1,500,000, and specifying the amount of
the Current Accounts Receivable as of month end.
(f) Maintain Current Account Receivable. At all times while the April Notes
remain outstanding, maintain Current Account Receivable of no less than
$1,500,000.
(g) Use of Proceeds. The Company shall use the proceeds from the sale of
the April Notes and the Shares for working capital purposes.
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Section 5.02 Negative Covenants. The Company covenants and agrees that, so
long as any amount is outstanding under any of the Transaction Documents,
neither it nor any of its Subsidiaries shall, without the written consent of all
the Investors:
(a) Additional Debt. Create, incur, assume or suffer to exist any Debt
other than Debt arising under this Agreement and the other Transaction Documents
and Permitted Debt.
(b) Liens. Create, incur, assume or suffer to exist any Lien, upon or with
respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or, hereafter acquired, or sign any
security agreement authorizing any secured party thereunder to file or assign
any accounts or other right to receive income, other than Permitted Liens.
(c) Change in Nature of Business. Make any material change in the nature of
its business as it exists on the date hereof.
ARTICLE VI
Representations and Warranties of the Investors. Each of the Investors,
severally and not jointly, hereby represent and warrant as to itself that:
Section 6.01 Authorization. The Transaction Documents constitute valid and
legally binding obligations of the Investor enforceable in accordance with their
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or other
equitable remedies.
Section 6.02 Purchase Entirely for Own Account. The April Notes and the
Shares to be purchased by the Investor (collectively, the "Securities") will be
acquired for investment for the Investor's own account and not with a view to
the resale or distribution of any part thereof. The Investor represents that it
has full power and authority to enter into this Agreement.
Section 6.03 Disclosure of Information. The Investor acknowledges that it
has received all the information that it has requested relating to the Company
and the purchase of the April Notes and the Shares and has had an opportunity to
review and question the Company in connection with all public filings of Company
under applicable state and federal rules and regulations, or as required by the
Securities and Exchange Commission or state regulatory agencies. The Investor
further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of
the April Notes and the Shares. The foregoing, however, does not limit or modify
the representations and warranties of the Company in Article IV of this
Agreement or the right of the Investor to rely thereon.
Section 6.04 Accredited Investor. The Investor is an "accredited investor"
within the meaning of Rule 501 of Regulation D of the Securities and Exchange
Commission (the "SEC"), as presently in effect.
xv
Section 6.05 Restricted Securities. Investor understands that the April
Note and the Shares that it is purchasing are characterized as "restricted
securities" under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering, and
that under such laws and applicable regulations such securities may be resold
without registration under the Act, only in certain limited circumstances. In
this connection, the Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.
Section 6.06 Legends. It is understood that the certificates evidencing the
April Notes and the Shares may bear a legend in substantially the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE SECURITIES
REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF
COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT
THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT
REGISTRATION UNDER THE ACT."
Section 6.07 Investor Questionnaire. If requested by the Company, the
Investor covenants to execute and deliver to the Company prior to, at or
promptly following the Closing an investor questionnaire supplied by the
Company.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01 Events of Default. If any of the following events (an "Event
of Default") shall occur and be continuing:
(a) The Company shall fail to pay the principal of, or any interest on, the
April Notes or any other amount payable under any Transaction Document to which
it is a party within ten (10) business days after such amount becomes due and
payable; or
(b) Any representation or warranty made by the Company under or in
connection with any Transaction Document to which it is a party shall prove to
have been incorrect in any material respect when made; or
(c) The Company shall fail to deliver the officer's certificate required to
be delivered pursuant to Section 5.01(e), and such failure shall continue
unremedied for a period of ten (10) business days; or
(d) The Company shall fail to perform or observe any other term, covenant
or agreement contained in any Transaction Document to which it is a party and
xvi
such failure shall continue unremedied for a period of fifteen (15) business
days after notice of such failure to perform is delivered in writing to the
Company; or
(e) A default shall occur under the Security Agreement; or
(f) The Company shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts generally, or either
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Company seeking to adjudicate the Company
as bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of the Company or
its debt under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for the Company or
for any substantial part of its property, or seeking a warrant of attachment,
execution or similar process against any substantial part of its property and,
in the case of any such proceeding instituted against the Company, either such
proceeding shall remain undismissed or unstayed for a period of 90 days, or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, or for any substantial part of, the
Company's property) shall occur; or the Company shall take corporate action to
authorize any of the actions set forth above in this subsection (f); or
(g) Any judgment or order for the payment of money in excess of US$250,000
shall be rendered against the Company, and either (i) an enforcement proceeding
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall have been a period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) Any non-monetary judgment or order shall be rendered against the
Company that could be reasonably likely to have a Material Adverse Effect on the
Company, and there shall be any period of 10 consecutive days during which a
stay of enforcement or such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(i) Any provision of any Transaction Document after delivery thereof shall
for any reason cease to be valid and binding on the Company or the Company shall
so state in writing.
Section 7.02 Remedies. In the case of an Event of Default:
(a) with respect to Section 7.01(a) through 7.01(e) and with respect to
Sections 7.01(g) through (h), the Investors may, individually with respect to
its respective April Note, or in the aggregate, by notice to the Company,
declare the principal amount then outstanding of, and the accrued interest on,
the April Notes and all other amounts payable by the Company hereunder and under
the April Notes and the Security Agreement
(b) to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable in cash, without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Company; and
xvii
(c) with respect to Section 7.01(f), the unpaid principal amount of and
accrued interest on the April Notes and all other amounts payable by the Company
hereunder and under the April Notes shall automatically become immediately due
and payable, in cash, without presentment, demand, protest or other formalities
of any kind, all of which are hereby expressly waived by the Company.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments.
(a) No amendment, modification, termination or waiver of any provision of
this Agreement, the April Notes or any other Transaction Document, or consent to
any departure by the Company or the Investors therefrom, shall in any event be
effective without the written concurrence of the Company and all of the
Investors provided however, each Investor may individually extend the Maturity
Date of its April Note in its sole and absolute discretion.
(b) Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given. No notice to or demand on
the Company in any case shall entitle the Company to any other or further notice
or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 8 time
outstanding, its assigns and, if signed by the Company, the Company.
Section 8.02 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally or
mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, defends and other communications will
be sent to the addresses set forth below:
If to the Investors, to them at their respective addresses set forth in the
signature pages hereof:
If to the Company, to:
NetWolves Corporation
0000 Xxxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
xviii
With a copy to (which shall not constitute notice):
Beckman, Lieberman, & Barandes, LLP
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
Section 8.03 No Waiver; Remedies. No failure on the part of the Investors
to exercise, and no delay in exercising, any right hereunder or under any
Transaction Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 8.04 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Company and the Investors and thereafter shall
be binding upon and inure to the benefit of the Company and the Investors and
their respective successors and assigns, except that the Company shall not have
the right to assign or otherwise transfer all or any part of its rights or
obligations hereunder or any interest herein without the prior written consent
of the Investor.
Section 8.05 Indemnity.
(a) The Company agrees to indemnify and hold harmless the Investors and
each of its Affiliates and their respective directors, officers, members,
managers, employees, agents, representatives, assignees and controlling persons
(each, an "Indemnified Party") from and against any and all losses, claims,
damages, expenses and liabilities (including the cost of any investigation,
litigation, or other proceedings, regardless of whether any Indemnified Party is
a party thereto), and fees, disbursements and other charges of counsel, joint or
several, to which such Indemnified Party may become subject under any applicable
law and related to or arising out of (i) any transaction contemplated by the
Transaction Documents or the execution, delivery and performance of the
Transaction Documents or any other document in any way relating to the
Transaction, the other transactions contemplated by the Transaction Documents
(as such documentation may be amended, modified or supplemented) or (ii) any
breach of a representation, warranty or covenant contained in any Transaction
Documents. The Company will not be liable under the foregoing indemnification
provision to an Indemnified Party to the extent that any loss, claim, damage,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's bad faith,
gross negligence, or knowing violation of law. The Company also agrees that no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company, or any security holders or
creditors thereof, related to or arising out of the execution, delivery and
performance of any Transaction Document or any other document in any way
relating to any of the Transactions or the other transactions contemplated by
the Transaction Documents, except to the extent that any loss, claim, damage or
xix
liability is found in a final, non-appealable judgment by a court to have
resulted from such Indemnified Party's bad faith or gross negligence or any
breach of this Agreement.
(b) If the indemnification of an Indemnified Party provided for in Section
8.06(a) is for any reason held unenforceable, the Company agrees to contribute
to the losses, claims, damages and liabilities for which such indemnification is
held unenforceable (i) in such proportion as is appropriate to reflect the
relative benefits to the Company, on the one hand, and such Indemnified Party,
on the other hand, of the transactions contemplated by the Transaction
Documents, including, without limitation, the Transactions and the other
transactions contemplated by any other document in any way relating to any of
the Transactions (whether or not any of such transaction is consummated) or (ii)
if (but only if) the allocation provided for in clause (i) is for any reason
held unenforceable, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of the
Company, on the one hand, and such Indemnified Party, on the other hand, as well
as any other relevant equitable considerations; provided, however, that, to the
extent permitted by applicable law, in no event shall any Indemnified Party be
required to contribute an aggregate amount in excess of the aggregate interest
and costs and expenses actually paid to such Indemnified Party in connection
with the Transaction
Section 8.07 Governing Law. This Agreement, the Security Agreement, the
Registration Rights Agreement and the April Notes shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
Section 8.08 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties thereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 8.09 Consent to Jurisdiction.
(a) The Company hereby irrevocably submits to the jurisdiction of any New
York State or federal court sitting in the City of New York, New York, in any
action or proceeding arising out of or relating to this Agreement or any other
Transaction Document, and the Company hereby irrevocably agrees that all claims
in respect of such action or proceeding may be heard and determined in such New
York, New York state court or such federal court. The Company hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding. The Company
hereby irrevocably consents to the service of copies of any summons and
complaint and any other process which may be served in any such action or
proceeding by certified mail, return receipt requested, or by delivering a copy
of such process to the Company, at its address specified in Section 8.02 or by
any other method permitted by law. The Company agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or by any other manner provided by law.
xx
(b) Nothing in this Section 8.09 shall affect the right of the Investors to
serve legal process in any other manner permitted by law or affect the right of
the Investors to bring any action or proceeding against the Company or their
property in the courts of other jurisdictions.
Section 8.10 Waiver Of Jury Trial. EACH OF THE COMPANY, AND THE INVESTORS
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE TRANSACTION DOCUMENTS, ANY DOCUMENT DELIVERED UNDER THE
TRANSACTION DOCUMENTS, THE APRIL NOTES OR THE ACTIONS OF THE COMPANY AND THE
INVESTORS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
Section 8.11 Other Activities, Publicity and Confidentiality.
(a) No Promotion. Except as otherwise required by law, the Company agrees
that it will not, without the prior written consent of the Investors in each
instance, (i) use in advertising, publicity, or otherwise the name of the
Investors, or any affiliate of the Investor, or any partner or employee of the
Investors, nor any trade name, trademark, trade device, service xxxx, symbol or
any abbreviation, contraction or simulation thereof owned by the Investor or its
affiliates, or (ii) represent, directly or indirectly, that any product or any
service provided by the Company has been approved or endorsed by the Investors.
(b) Confidentiality. Except as required by law, regulation or legal
process, the Investors agrees, and agrees to cause any of its representatives,
employees, legal counsel, advisors, agents or affiliates, to keep confidential
and not disclose (other than, in the case of any such representative, employee,
advisor, agent or affiliate, to the Investors), or divulge any confidential,
proprietary, secret or non-public information which the Investors or its
representatives, employees, legal counsel, advisors, agents or affiliates may
obtain from the Company (including but not limited to financial statements) and
not use such information other than for the benefit of the Company or in
furtherance of the Investors' rights as a Investor or investor of the Company,
provided that no such information shall be deemed to be non-public if it (i) is
or becomes generally available to the public other than as a result of a
disclosure by the Investors or its respective agents, representatives, advisors,
legal counsel or employees; (ii) is or becomes available to the Investors on a
non-confidential basis from a source (other than the Company or one of its
officers, directors, agents, representatives or employees) that is not
prohibited from disclosing such information by a legal, contractual or fiduciary
obligation; or (iii) was known to the Investors on a non-confidential basis
prior to its disclosure to it by the Company, and provided further that, any
other term of this Agreement to the contrary notwithstanding, the Company shall
not be obligated to disclose any information to a competitor of the Company.
Section 8.12 Decisions and Other Determinations. For all purposes of this
Agreement, any provision which provides for a decision or other determination to
be made by any party hereto at its option or election, or in its discretion,
shall be made in the sole and absolute discretion of such party, which each of
the parties hereto hereby acknowledges and confirms may be arbitrary.
xxi
Section 8.13 Interest Laws. Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not be required to pay, and the
Investor shall not be permitted to contract for, take, reserve, charge or
receive, any compensation which constitutes interest under applicable law in
excess of the maximum amount of interest permitted by law ("Excess Interest").
If any Excess Interest is provided for or determined in a final, non-appealable
judgment by a court of competent jurisdiction to have been provided for in this
Agreement or otherwise contracted for, taken, reserved, charged or received,
then in such event: (A) the provisions of this Section shall govern and control;
(B) the Company shall not be obligated to pay any Excess Interest; (C) any
Excess Interest that the Investors may have contracted for, taken, reserved,
charged or received hereunder shall be, at the Investor's option, (I) applied as
a credit against the outstanding balance of the April Note (not to exceed the
maximum amount permitted by law), (II) refunded to the payor thereof, or (III)
any combination of the foregoing; (D) the interest provided for shall be
automatically reduced to the maximum lawful rate allowed from time to time under
applicable law (the "Maximum Rate"), and this Agreement shall be deemed to have
been, and shall be, reformed and modified to reflect such reduction; and (E) the
Company shall have no action against the Investors due to any Excess Interest.
The terms of this Section shall be deemed incorporated into the April Notes.
Section 8.14 Further Assurances. To the extent permitted by applicable law,
the Company shall use its best efforts to obtain any consent of any Person which
may be required in connection with the performance or enforcement of any
Transaction Document and any transfer, pledge, assignment or grant of security
interest in Collateral contemplated hereby and thereby, and will cooperate
fully, and use its best efforts to in effecting any such transfer, pledge,
assignment or grant of security interest or in connection with each Investor's
exercise of its rights and remedies pursuant to the Transaction Documents.
xxii
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
NETWOLVES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
AGREED AND ACCEPTED by all Investors
pursuant to their respective executed
Financing Signature Page
xxiii
EXHIBIT A
FORM OF SECURED PROMISSORY NOTE
(AS PER EXECUTION COPY DELIVERED TO INVESTOR)
xxiv
EXHIBIT B
FORM OF SECURITY AGREEMENT
(AS PER EXECUTION COPY DELIVERED TO INVESTOR)
xxv
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
(AS PER EXECUTION COPY DELIVERED TO INVESTOR)
xxvi
