Exhibit 10.3
WAIVER AGREEMENT
WAIVER AGREEMENT (the "AGREEMENT"), dated as of February 2, 2001, by and
between Worldwide Xceed Group, Inc. (f/k/a Xceed Inc.), a Delaware corporation,
with its principal place of business located at 233 Broadway, New York, New York
10279, (the "COMPANY"), and the investor listed on the SCHEDULE attached hereto
(the "INVESTOR").
WHEREAS:
A. The Company, the Investor and certain other entities (the "OTHER
INVESTORS") have entered into that certain Subscription Agreement, dated as of
January 13, 2000 (the "SUBSCRIPTION AGREEMENT"), pursuant to which the Investor
purchased from the Company shares of the Company's Series A Cumulative
Convertible Preferred Stock (the "PREFERRED SHARES") which are convertible into
shares (the "CONVERSION SHARES") of the Company's common stock, par value $0.01
per share (the "COMMON STOCK"), in accordance with the terms of the Company's
Certificate of Designation, Preferences and Rights of Series A Cumulative
Convertible Preferred Stock filed with the Secretary of State of the State of
Delaware on January 13, 2000 (the "CERTIFICATE OF DESIGNATION") and warrants
(the "OLD WARRANTS") to purchase shares of Common Stock.
B. On April 4, 2000, the Company issued additional warrants, substantially
in the form of the Old Warrants, to the Investor and the Other Investors (the
"ADDITIONAL WARRANTS" and, collectively with the Old Warrants, the "WARRANTS");
C. The Company, the Investor and the Other Investors have entered into that
certain Registration Rights Agreement, dated as of January 13, 2000, (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company agreed to
provide certain registration rights under the Securities Act of 1933, as amended
(the "1933 ACT") and the rules and regulations promulgated thereunder;
D. The Company wishes to redeem and the Investor wishes to allow the
Company to redeem, upon the terms and conditions stated in this Agreement, 550
of the Investor's Preferred Shares (the "REDEMPTION SHARES") and all of the
Investor's Warrants for an aggregate of $550,010 in cash (the "REDEMPTION
PRICE"); and
E. The Investor wishes to limit conversions under the Certificate of
Designations and to waive, upon the terms and conditions stated in this
Agreement, certain rights with respect to, and provisions of, the Certificate of
Designation, the Subscription Agreement and the Registration Rights Agreement.
NOW, THEREFORE, the Company and the Investor hereby agree as follows:
1. REDEMPTION AND WAIVER
1.1 REDEMPTION OF REDEMPTION SHARES AND WARRANTS; WAIVER. On the
basis of the representations and warranties contained in this
Agreement and subject to the terms and conditions hereinafter set
forth, the Company shall redeem from the Investor and the
Investor shall allow the Company to redeem from it the Redemption
Shares and all of the Investor's Warrants for the Redemption
Price. The closing of the redemption of the Redemption Shares and
the Warrants (the "CLOSING") and the effectiveness (the
"EFFECTIVENESS") of the waivers, covenants, releases and other
agreements in Sections 5 and 14 shall be on a date which is five
(5) business days after the date hereof or such later date as may
be mutually agreed to in writing by the Company and the Investor
(the "CLOSING DATE"); provided that all conditions precedent to
the obligations of the Investor and the Company to the Closing
and the Effectiveness set forth herein shall have been satisfied
or waived in writing. Assuming that pursuant to the Subscription
Agreement the Company issued the Investor the Warrants held by
the Investor free and clear of any taxes, security interest,
liens, encumbrances, claims and demands of any kind whatsoever,
the Investor shall transfer such Warrants to the Company, free
and clear of any restrictions on transfer, taxes, security
interest, liens, encumbrances and demands of any kind whatsoever.
1.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AT
CLOSING AND EFFECTIVENESS. The obligations of the Company to
redeem the Redemption Shares and the Warrants and the obligations
of the Company in Sections 5 and 14 are subject to the
satisfaction at or before the Closing and the Effectiveness of
each of the conditions set forth below. Each of these conditions
are for the Company's sole benefit and may be waived in writing
by the Company with respect to the Investor at any time in its
sole discretion.
(a) ACCURACY OF THE INVESTOR'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Investor shall be
true and correct in all material respects as of the date
when made and in all material respects as of the Closing
Date as though made at each such time.
(b) PERFORMANCE BY THE INVESTOR. The Investor shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with
by the Investor at or prior to the Closing and the
Effectiveness.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which
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prohibits or adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have
been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated
hereby.
(d) WAIVER BY OTHER INVESTORS. Each of the Other Investors shall
have agreed to limit conversions and waive their rights with
respect to the Subscription Agreement, the Registration
Rights Agreement and the Certificate of Designations (the
"TRANSACTIONS DOCUMENTS") on terms substantially similar to
this Agreement.
(e) OFFICER'S CERTIFICATE. The Company shall have received a
certificate, executed by an authorized signatory of the
Investor, dated as of the Closing Date, to the effect that
the conditions set forth in Sections 1.2(a) and 1.2(b) above
are satisfied.
1.3 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTOR AT
CLOSING AND EFFECTIVENESS. The obligations of the Investor to
permit the redemption of the Redemption Shares and Warrants and
the obligations of the Investor in Section 14 are subject to the
satisfaction at or before the Closing and the Effectiveness of
each of the conditions set forth below. Each of these conditions
is for the Investor's sole benefit and may be waived in writing
by the Investor at any time in its sole discretion.
(a) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company shall be
true and correct in all material respects as of the date
when made and in all material respects as of the Closing
Date as though made at such time.
(b) PERFORMANCE BY THE COMPANY. The Company shall have
performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with
by the Company at or prior to the Closing and the
Effectiveness.
(c) NO INJUNCTION. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction which
prohibits or adversely affects any of the transactions
contemplated by this Agreement, and no proceeding shall have
been commenced which may have the effect of prohibiting or
adversely affecting any of the transactions contemplated
hereby.
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(d) LEGAL OPINION. The Company shall have delivered to the
Investor an opinion of Hale and Dorr LLP, counsel to the
Company, substantially in the form of EXHIBIT C annexed
hereto, dated the Closing Date.
(e) OFFICER'S CERTIFICATE. The Investor shall have received a
certificate, executed by the Chief Executive Officer of the
Company, dated as of the Closing Date, to the effect that
the conditions set forth in Sections 1.3(a) and 1.3(b) above
are satisfied.
(f) RESERVATION OF SHARES. On or prior to the Closing Date, the
Company shall have duly reserved a number of Conversion
Shares equal to the Maximum Conversion Share Number (as
defined in Section 4.1) to be reserved for issuance upon
conversion of the Preferred Shares.
(g) SECRETARY'S CERTIFICATE. The Company shall have delivered to
the Investor a certificate in form and substance reasonably
satisfactory to the Investor, executed by the secretary of
the Company, certifying as to the truth and accuracy of the
certificate of incorporation of the Company (the
"CERTIFICATE OF INCORPORATION"), as in effect on the Closing
Date, the Bylaws of the Company, as in effect on the Closing
Date, and the resolutions duly adopted by the Board of
Directors authorizing and approving the execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby.
(h) GOOD STANDING. On or prior to the Closing Date, the Company
shall have delivered to the Investor a long-form certificate
of good standing and tax status of the Company, certified as
of a recent date by the Secretary of State of the State of
Delaware.
2. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company that:
2.1 AUTHORITY. This Agreement has been duly authorized and validly
executed and delivered by the Investor and is a legal, valid and
binding obligation of the Investor, enforceable against the Investor
in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.
2.2 NO BROKERS. The Investor has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or
similar payments by the Company relating to this Agreement or the
transactions contemplated hereby.
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2.3 OWNERSHIP OF PREFERRED SHARES AND WARRANTS. The Investor is the sole
record and beneficial owner of the number of Preferred Shares and
Warrants set forth opposite the Investor's name on the Schedule.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to the Investor that:
3.1 EXCHANGE ACT FILINGS. The Company has registered its Common Stock
pursuant to Section 12(b) or 12(g) of the Exchange Act and is in full
compliance with all reporting requirements of the Exchange Act.
3.2 VALID ISSUANCE OF CAPITAL STOCK.
(a) The Company has an authorized capitalization consisting of
100,000,000 shares of Common Stock and 1,000,000 shares of
preferred stock, par value $0.05 per share. The Company has
issued and outstanding on the date hereof 48,299,054 shares of
Common Stock, of which 20,000 shares are held in treasury, and
23,115 shares of Series A Preferred Stock. As of the date hereof,
the Company has outstanding the following securities convertible
into (other than its Series A Preferred Stock) or exercisable or
exchangeable for Common Stock (the "DERIVATIVE SECURITIES"): (i)
options to purchase 8,204,861 shares of Common Stock; and (ii)
other than the Warrants, warrants to purchase 4,726,562 shares of
Common Stock.
(b) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid
and non-assessable. Upon conversion of the Preferred Shares, in
accordance with its terms, the Conversion Shares will be validly
issued, fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issuance thereof, with the
holders thereof being entitled to all rights accorded to holders
of Common Stock. The holders of outstanding shares of capital
stock of the Company are not and shall not be entitled to
preemptive or other rights afforded by the Company to subscribe
for the capital stock or other securities of the Company as a
result of the issuance of Conversion Shares upon the conversion
or exercise thereof.
(c) Other than as set forth in Section 3.2(a) and options and shares
that may be issued pursuant to the Company's stock option plans
as in effect on the date hereof: (i) no shares of the Company's
capital stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances
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created or imposed by the Company other than issued and
outstanding shares of Common Stock held in escrow in connection
with the Company's acquisition of each of Catalyst Consulting
Services, Inc., Distributed Systems Solutions, Inc. and Big
Theory LLC ; (ii) there are no outstanding debt securities issued
by the Company which are convertible into Common Stock; (iii)
there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares
of capital stock of the Company (or any subsidiary of the Company
(each hereinafter referred to as a "SUBSIDIARY" and collectively,
the "SUBSIDIARIES"), or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of capital stock of the
Company or any Subsidiary or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares
of capital stock of the Company or any Subsidiary other than
shares that may be issuable in connection with the acquisition of
the Company's subsidiary, Pulse Interactive B.V., based on
financial performance; (iv) there are no agreements or
arrangements under which the Company (or any Subsidiary) has any
outstanding obligation to register the sale of any of their
securities under the 1933 Act (except the Registration Rights
Agreement, the registration rights agreement among the Company
and certain shareholders of Zabit & Associates, Inc., the
Subscription Agreement between the Company and Spherion
Corporation dated as of April 27, 2000, the Warrant Agreement
between the Company and Spherion Corporation dated as of November
15, 2000, the Warrant issued to Hilton Hotels Corporation dated
as of October 6, 2000 and pursuant to certain employee stock
option agreements); (v) there are no outstanding securities of
the Company or any Subsidiary which contain any redemption or
similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any
Subsidiary is or may become bound to redeem a security of the
Company or any Subsidiary; (vi) there are no securities or
instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Conversion Shares as
described in this Agreement; and (vii) the Company does not have
any stock appreciation rights or "phantom stock" plans or
agreements or any similar plan or agreement.
(d) All of the authorized shares of capital stock of each Subsidiary
are owned by the Company, free and clear of any lien, charge,
security interest, encumbrance, adverse claim or other
restriction, and all the issued and outstanding shares of capital
stock of the Subsidiaries are validly issued and are fully paid,
non-assessable and free of preemptive and similar
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rights. Except as otherwise set forth in this Section 3.3 hereto,
there are no outstanding agreements or commitments requiring the
Company or any Subsidiary to issue capital stock or Derivative
Securities.
3.3 ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate
power to own its properties and assets and to carry on its
business as now being conducted. Each Subsidiary is a corporation
duly organized, validly existing and in good standing under the
laws of its respective state of organization, with the requisite
corporate power to own its properties and assets and to carry on
its business as now being conducted. The Company and each
Subsidiary is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which
the nature of the business conducted or property owned by it
makes such qualification necessary other than those jurisdictions
in which the failure so to qualify would not have a Material
Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material
adverse effect on the business, operations, properties, cash
flows, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries taken as a whole and any condition
or situation which would prohibit or otherwise materially
adversely interfere with the ability of the Company to enter into
and perform its obligations under the Transaction Documents.
3.4 AUTHORIZATION; ENFORCEMENT. (a) The Company has the
requisite corporate power and authority to enter into and perform
this Agreement, to redeem the Redemption Shares, to issue the
Conversion Shares in accordance with the terms hereof and to
perform its obligations under the Certificate of Designation and
its Certificate of Incorporation; (b) the execution and delivery
of this Agreement and the consummation by the Company of the
transactions contemplated hereby (including the redemption of the
Redemption Shares) have been duly authorized by all necessary
corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required;
(c) this Agreement has been duly executed and delivered by the
Company; and (d) this Agreement constitutes legal, valid and
binding obligations of the Company enforceable against the
Company in accordance with its terms.
3.5 NO BROKERS. The Company has not taken any action which would
give rise to a claim by any person for brokerage commissions,
finder's fees or similar payments by the Investor relating to
this Agreement or the transactions contemplated hereby.
3.6 NO CONFLICTS. The execution, delivery and performance of
this Agreement and consummation of the transactions contemplated
hereby (including the redemption of the Redemption Shares, the
conversion of the Preferred Shares and
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the issuance of the Conversion Shares upon conversion of the
Preferred Shares) do not and will not: (i) result in a violation
of the Certificate of Incorporation, as in effect on the date
hereof, and the Company's Bylaws, as in effect on the date hereof
(the Certificate of Incorporation and the Company's Bylaws are
collectively referred to herein as the "CHARTER DOCUMENTS"); or
(ii) result in the creation of any lien, charge, security
interest or encumbrance upon any of the assets of the Company or
any Subsidiary pursuant to the terms or provisions of or,
conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture, credit facility or
instrument to which the Company or any Subsidiary is a party, or
result in a violation of any federal, state, local or foreign
law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations) applicable to
the Company or any Subsidiary or by which any property or asset
of the Company or any Subsidiary is bound or affected, except, in
the case of clause (ii) for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a
Material Adverse Effect. The Company is not required under
federal, state or local law, rule or regulation in the United
States to obtain any consent, authorization or order of, or make
any filing or registration with, any court or governmental or
self-regulatory agency in order for it to execute, deliver or
perform any of its obligations under this Agreement in accordance
with the terms hereof.
3.7 EXCHANGE ACT REPORTS. The Company has filed all reports
required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, since August 31, 1995
(the foregoing materials being collectively referred to herein as
the "EXCHANGE ACT REPORTS"). Except for this Agreement and
similar transactions between the Company and the Other Investors,
which information will be publicly disclosed by the Company on or
before 8:30 a.m. Eastern Time, on the second business day
following the date of execution of this Agreement, but not later
than the Company's first public announcement of the execution of
this Agreement or the transactions contemplated by this
Agreement, by means of the filing of a Form 8-K pursuant to
Section 5.3 hereof, the Company has not provided to the Investor
any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company
but which has not been so disclosed. As of their respective
dates, the Exchange Act Reports complied in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder and other
applicable federal, state and local laws, rules and regulations,
and none of the Exchange Act Reports contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they
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were made, not misleading. The Company has filed (including
filing such documents by incorporation by reference) all
agreements or documents to which the Company is a party that are
required to be filed as exhibits to the Exchange Act Reports.
3.8 EFFECTIVENESS OF SEC FILINGS. The SEC has not issued any
stop order or other order suspending the effectiveness of any
registration statement filed by the Company or the Subsidiary
under the Exchange Act or the 1933 Act.
3.9 COMPLIANCE WITH INSTRUMENTS, ETC. The Company (or the manner
in which it conducts its business) is not in breach or violation
of, or in default under, any term or provision of its Charter
Documents.
4. COVENANTS OF THE INVESTOR
4.1 CONVERSION OF PREFERRED SHARES. The Investor shall not
submit conversion notices for, and the Company shall not have the
obligation to issue shares of Common Stock for the conversion of,
Preferred Shares in excess of that number of Preferred Shares
which, in the aggregate, would result in the issuance of more
than 7,900,000 shares of Common Stock (the "MAXIMUM CONVERSION
SHARE NUMBER"); provided, however, that this limitation shall not
apply in the event that the Closing and the Effectiveness shall
not have occurred on or before the date which is five (5)
business days after the date of this Agreement (or such later
date as mutually agreed in writing by the Company and the
Investor). The Investor shall not transfer any of the Preferred
Shares or Warrants or any rights in the Preferred Shares or
Warrants to any person or entity unless such transferee shall
first have agreed in writing to be bound by the provisions of
this Agreement as if such transferee were a party hereto and any
assignment in violation of this sentence shall be null and void;
provided, however, that this limitation shall not apply in the
event that the Closing and the Effectiveness shall not have
occurred on or before the date which is five (5) business days
after the date of this Agreement (or such later date as mutually
agreed in writing by the Company and the Investor). If the
Company shall at any time subdivide or combine (by stock split,
stock dividend, recapitalization or otherwise) its outstanding
shares of Common Stock into a greater or lesser number of shares,
the Maximum Conversion Share Number in effect immediately prior
to such subdivision or combination shall be proportionately
adjusted to reflect such subdivision or combination, as the case
may be. Upon delivery by the Company to the Investor of an
aggregate number of shares of Common Stock equal to the
Maximum Conversion Share Number upon conversion of Preferred
Shares by the Investor after the date of this Agreement and if
the Closing and the Effectiveness have occurred on or before the
date which is five (5) business days after the date of this
Agreement (or such later date as mutually agreed in writing by
the Company and
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the Investor), the Investor shall promptly deliver to the
Company all stock certificates representing the remaining
Preferred Shares (the "REMAINING PREFERRED SHARES"). Assuming
that pursuant to the Subscription Agreement the Company
issued the Investor the Remaining Preferred Shares held by the
Investor free and clear of any taxes, security interest, liens,
encumbrances, claims or demands of any kind whatsoever, at the
time the Remaining Preferred Shares are delivered to the Company
pursuant to this Section 4.1, the Investor shall hold the
Remaining Preferred Shares, and shall transfer such Remaining
Preferred Shares, duly endorsed in blank, to the Company, free
and clear of any restrictions on transfer, taxes, security
interest, liens, encumbrances and demands of any kind whatsoever.
5. COVENANTS OF THE COMPANY
5.1 EXCHANGE ACT REGISTRATION. The Company will use its best
efforts: (a) to cause its Common Stock to continue to be
registered under Section 12(b) or 12(g) of the Exchange Act; (b)
to comply in all material respects with its reporting and filing
obligations under the Exchange Act; and (c) not to take any
action or file any document (whether or not permitted by the
Exchange Act or the rules and regulations thereunder) to
terminate or suspend such registration or to terminate or suspend
its reporting and filing obligations under the Exchange Act.
5.2 FILING OF CURRENT REPORT ON FORM 8-K. On or before 8:30
a.m., Eastern Time, on the second business day following the date
of this Agreement, but not later than the Company's first public
announcement of the execution of this Agreement or the
transactions contemplated by this Agreement, the Company shall
file with the SEC a Current Report on Form 8-K in a form
reasonably acceptable to the Investor describing the terms of
this Agreement, including, without limitation, by including as
exhibits to such Form 8-K this Agreement. In addition, on or
before 8:30 a.m., Eastern Time, on the second business day
following the Closing Date, but not later than the Company's
first public announcement thereof, the Company shall file with
the SEC a Current Report on Form 8-K in a form reasonably
acceptable to the Investor describing the terms of the
transaction consummated at the Closing and the Effectiveness or
that the Closing and the Effectiveness did not occur, as the case
may be.
5.3 EXPENSES; FEES. Subject to Section 8 below, at the Closing
and the Effectiveness, the Company shall pay a nonaccountable
expense allowance of $3,000 to the Investor or its designee(s) by
wire transfer of immediately available funds in accordance with
the Investor's written wire instructions.
6. PAYMENT SET ASIDE
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To the extent that the Company makes a payment or payments to the Investor
hereunder or pursuant to the Subscription Agreement, the Registration Rights
Agreement or the Certificate of Designation or the Investor enforces or
exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action) by the court of competent jurisdiction in a
final non-appealable judgment, then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force or effect as if such payment had not been made or
such enforcement or set-off had not occurred.
7. WAIVER OF CERTAIN RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT
Provided that the Closing Date occurs on or before the date which is five
(5) business days after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and the Investor), the Investor waives
any right it may have (i) to receive any payments pursuant to Section 2(c) of
the Registration Rights Agreement and (ii) to receive a reduction in the
Conversion Price (as defined in the Certificate of Designations) of the
Preferred Shares in the event of an Excess Blocking Period (as defined in the
Registration Rights Agreement) pursuant to Section 5A(b) of the Registration
Rights Agreement. Notwithstanding the foregoing, the waiver contained in this
Section 7 shall be void and of no further force or effect on or after the first
date after the Closing Date on which there occurs a Conversion Default (as
defined below).
For purposes of this Agreement, a "CONVERSION DEFAULT" shall be deemed to
have occurred in the event that the Company (1) notifies any holder of Preferred
Shares (including the Investor) directly in writing or pursuant to a public
disclosure, including but not limited to a press release, that the Company
cannot or does not intent to issue shares of Common Stock upon conversion of the
Preferred Shares tendered in accordance with the Certificate of Designation; or
(2) fails to issue shares of Common Stock for any reason to any holder of
Preferred Shares (including the Investor) prior to the tenth (10th) business day
after the date of receipt by the Company of a Conversion Notice (as defined in
the Certificate of Designation) delivered by a holder of Preferred Shares
Investor in accordance with the Series A Certificate of Incorporation or, in the
case of a Merger Conversion Election Conversion pursuant to Section 10 on the
Merger Transaction Closing Date, including, without limitation, because the
Company (x) does not have a sufficient number of shares of Common Stock or other
securities authorized and available or (y) is otherwise prohibited by applicable
law or by the rules and regulations of any stock exchange, interdealer quotation
system or other self-regulatory organization with jurisdiction over the Company
or its securities from issuing all of the Common Stock which is to be issued to
a holder of Preferred Shares.
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8. WAIVER OF CERTAIN RIGHTS UNDER THE CERTIFICATE OF DESIGNATIONS
8.1 RIGHTS TO DIVIDENDS AND OTHER DISTRIBUTIONS. Provided that the
Closing Date occurs on or before the date which is five (5) business
days after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and the Investor), the
Investor agrees to waive its right (a) to receive dividends on the
Preferred Shares pursuant to Section 2 of the Certificate of
Designation and (b) to any adjustment for dividends and other
distributions pursuant to Section 9(c) of the Certificate of
Designation; provided, however, that any holder of Preferred Shares
shall be entitled to any dividends or other distributions by the
Company to the same extent as if such holder had converted its
Preferred Shares into Common Stock (except as may be limited by
Section 4.1) on the record date for such dividend or other
distribution, and payments thereof shall be made concurrently with the
dividend or other distribution to the holders of Common Stock.
Notwithstanding the foregoing, the waiver contained in this Section
8.1 shall be void and of no further force or effect on and after the
first day after the Closing Date on which there occurs a Conversion
Default.
8.2 RIGHTS TO PREVENT THE ISSUANCE OF PARITY SECURITIES. Provided
that the Closing Date occurs on or before the date which is five (5)
business days after the date of this Agreement (or such later date as
may be mutually agreed in writing by the Company and the Investor),
the Investor agrees to waive its right to prevent the issuance of (a)
any Parity Securities (as defined in the Certificate of Designations)
or (b) any capital stock that ranks senior to the Preferred Shares in
respect of dividends, each as provided in clause (iii) of Section 3(b)
of the Certificate of Designation. Notwithstanding the foregoing, the
waiver contained in this Section 8.2 shall be void and of no further
force or effect on or after the first date after the Closing Date on
which there occurs a Conversion Default.
8.3 RIGHTS TO REDEMPTION UPON AN EXTRAORDINARY TRANSACTION. Provided
that the Closing Date occurs on or before the date which is five (5)
business days after the date of this Agreement (or such later date as
may be mutually agreed in writing by the Company and the Investor),
the Investor agrees not to exercise its right to (a) redeem the
Preferred Shares pursuant to Section 5(a) of the Certificate of
Designation as of the effective date of an Extraordinary Transaction
(as defined in Section 4 of the Certificate of Designation), except
with respect to an Extraordinary Transaction described in clause (i)
of Section 4 of the Certificate of Designation or (b) an adjustment of
the Ceiling Price (as defined in the Certificate of Designation)
pursuant to clause (iii) of Section 5(d) of the Certificate of
Designation; provided, however, that the Investor shall not have the
right to require the redemption of the Preferred Shares if, with
respect to such
12
Extraordinary Transaction, the Company has delivered a Notice of
Merger Conversion in accordance with Section 10 and complies with its
obligations under Section 10. Notwithstanding the foregoing, the
waiver contained in this Section 8.3 shall be void and of no further
force or effect on and after the first date after the Closing Date on
which there occurs a Conversion Default.
8.4 RIGHTS TO ADJUSTMENT UPON THE ISSUANCE OF DERIVATIVE SECURITIES.
Provided that the Closing Date occurs on or before the date which is
five (5) business days after the date of this Agreement (or such later
date as may be mutually agreed in writing by the Company and the
Investor), the Investor agrees not to exercise its right to adjust the
Conversion Period or Conversion Price (each as defined in the
Certificate of Designation) of the Preferred Shares upon the issuance
of Derivative Securities (as defined in the Certificate of
Designation), as set forth in Section 9(c) of the Certificate of
Designation. Notwithstanding the foregoing, the waiver contained in
this Section 8.4 shall be void and of no further force or effect on
and after the first date after the Closing Date on which there occurs
a Conversion Default.
8.5 RIGHTS TO PENALTIES UNDER SECTION 11 OF THE CERTIFICATE OF
DESIGNATION. Provided that the Closing Date occurs on or before the
date which is five (5) business days after the date of this Agreement
(or such later date as may be mutually agreed in writing by the
Company and the Investor), the Investor agrees not to exercise its
right to redeem its Preferred Shares or receive penalties pursuant to
Section 11(c) or Section 11(d) of the Certificate of Designation.
Notwithstanding the foregoing, the waiver contained in the immediate
preceding sentence of this Section 8.5 shall be void and of no further
force or effect on and after the first date after the Closing Date on
which there occurs a Conversion Default. Provided that the Closing
Date occurs on or before the date which is five (5) business days
after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and the Investor), the
Company waives the Investor's compliance with the last sentence of
Section 11(b) of the Certificate of Designation.
8.6 RIGHTS TO EXTEND THE MATURITY DATE UPON SUSPENSION OF
REGISTRATION STATEMENT. Provided that the Closing Date occurs on or
before the date which is five (5) business days after the date of this
Agreement (or such later date as may be mutually agreed in writing by
the Company and the Investor), the Investor agrees not to exercise its
right to extend the Maturity Date (as defined in the Certificate of
Designation) of the Preferred Shares as provided in Section 17 of the
Certificate of Designation. Notwithstanding the foregoing, the waiver
contained in this Section 8.6 shall be void and of no further force or
effect on and after the first date after the Closing Date on which
there occurs a Conversion Default.
13
8.7 RIGHT UPON A TRIGGERING EVENT. Provided that the Closing Date
occurs on or before the date which is five (5) business days after the
date of this Agreement (or such later date as may be mutually agreed
in writing by the Company and the Investor), the Investor (i) agrees
not to exercise its right to redeem its Preferred Shares pursuant to
Section 5(b) upon the occurrence of a Triggering Event (as defined in
the Certificate of Designation), except with respect to a Triggering
Event described in clause (c) or clause (e) of the definition of
"Triggering Event" in Section 19 of the Certificate of Designation
with respect to which the Investor has complied with Section 4.1 of
this Agreement, and (ii) waives its right to receive any adjustment
pursuant to the last sentence of Section 5(b) of the Certificate of
Designation. Notwithstanding the foregoing, the waiver contained this
Section 8.7 shall be void and of no further force or effect on and
after the first date after the Closing Date on which there occurs a
Conversion Default.
8.8 RIGHT TO REQUEST ISSUANCE OF SHARES IN ELECTRONIC FORMAT (I.E.,
DWAC). Provided that the Closing Date occurs on or before the date
which is five (5) business days after the date of this Agreement (or
such later date as may be mutually agreed in writing by the Company
and the Investor), the Investor agrees to waive its right to request
that shares be issued in electronic format (i.e., DWAC) upon the
conversion of Preferred Shares in the event that the Company's
transfer agent does not offer or does not promptly make available
service for such electronic delivery of shares. If the Investor
requests that the Company cause shares to be issued in electronic
format (i.e., DWAC), then the delivery of the Conversion Notice (as
defined in the Certificate of Designation) shall be deemed to be a
representation by the Investor that it has complied with Section 4.1.
Notwithstanding the foregoing, the waiver contained in this Section
8.8 shall be void and of no further force or effect on and after the
first date after the Closing Date on which there occurs a Conversion
Default
9. WAIVER OF CERTAIN RIGHTS UNDER THE SUBSCRIPTION AGREEMENT
Provided that the Closing Date occurs on or before the date which is five
(5) business days after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and the Investor), the Investor (i)
agrees not to exercise its right to prevent the Company from declaring a
dividend or other distribution as provided in Section 5.10 of the Subscription
Agreement , (ii) agrees to waive the Company's compliance with Sections 5.1 and
5.2 of the Subscription Agreement , but solely with respect to the number of
shares in excess of the number of shares of Common Stock the Investor is
entitled to receive upon conversion of the Preferred Shares in accordance with
Section 4.1 of this Agreement, and (iii) agrees to waive the Company's
compliance with Sections 5.5 and 5.9 of the Subscription Agreement.
Notwithstanding the foregoing, the waiver contained in this Section 9 shall be
void and of no
14
further force or effect on and after the first date after the Closing Date on
which there occurs a Conversion Default.
10. AGREEMENT WITH RESPECT TO MANDATORY CONVERSION OF THE PREFERRED SHARES
ACCELERATION OF MANDATORY CONVERSION UPON MERGER TRANSACTION COMPANY'S
OPTION. Provided that the Closing Date has occurred on or prior to the date
which is five (5) business days after the date of this Agreement (or such later
date as may be mutually agreed in writing by the Company and the Investor), at
any time on or after the date the Company discloses a pending, proposed or
intended Merger Transaction (as defined below), the Company shall have the
right, in its sole discretion, to require that the Investor convert its
Preferred Shares up to the limitation set forth in Section 4.1 ("MERGER
CONVERSION ELECTION"); provided that the Conditions to Merger Conversion (set
forth below) are satisfied or waived by the Investor. The Company shall exercise
its right to make a Merger Conversion Election by providing the Investor written
notice ("NOTICE OF MERGER CONVERSION") by facsimile and overnight courier, after
the public disclosure of such proposed, pending or intended Merger Transaction
and at least 25 trading days prior to the date of consummation of the Merger
Transaction ("MERGER TRANSACTION CLOSING DATE"). The Notice of Merger Conversion
shall state the anticipated Merger Transaction Closing Date. If the Company
makes a Merger Conversion Election in compliance with this Section 10.1 and the
Conditions to Merger Conversion are satisfied or waived by the Investor, except
to the extent restricted by Section 15 of the Certificate of Designation or
Section 4.1 of this Agreement, on the Merger Transaction Closing Date the
Investor will be deemed to have submitted a Conversion Notice (as defined in the
Certificate of Designation) in accordance with Section 6 of the Certificate of
Designation for a number of Preferred Shares equal to the lesser of (I) all the
Preferred Shares held by the Investor which remain outstanding on such date, and
(II) the maximum number of Preferred Shares which such holder could convert on
the Merger Transaction Closing Date taking into account the restrictions in
Section 15 of the Certificate of Designation and Section 4.1 of this Agreement.
The Investor shall promptly after the Merger Transaction Closing Date surrender
all stock certificates representing the Preferred Shares, duly endorsed for
cancellation, to the Company. If the Company fails to provide Conversion Shares
with respect to any Preferred Shares in accordance with Section 6 of the
Certificate of Designation, then the Merger Conversion Election shall be null
and void with respect to such Preferred Shares and the holder of such Preferred
Shares shall be entitled to all the rights of a holder of outstanding Preferred
Shares set forth in this Certificate of Designations. "CONDITIONS TO MERGER
CONVERSION" shall mean the following conditions: (i) on each day during the
period beginning on and including the date the Company delivers a Notice of
Merger Conversion and ending on and including the Merger Transaction Closing
Date, the Registration Statement (as defined in each Registration Rights
Agreement) is effective and available for the sale of all the Registrable
Securities (as defined in each Registration Rights Agreement) (subject to the
limitation in Section 4.1 of this Agreement) or all the shares of Common Stock
issuable upon conversion of the Preferred Shares (subject to the limitation in
Section 4.1 of this Agreement) then outstanding are immediately available for
resale by the
15
Investor pursuant to Rule 144(k) under the 1933 Act; (ii) during the period
beginning on the date on which the Company delivers a Notice of Merger
Conversion and ending on and including the Merger Transaction Closing Date,
there shall not have occurred an event constituting a Conversion Default; (iii)
during the period beginning on the date on which the Company delivers a Notice
of Merger Conversion and ending on and including the Merger Transaction Closing
Date, the Company shall have delivered the required number of shares of Common
Stock (as set forth in Section 6 of the Certificate of Designation) upon
conversion of Preferred Shares (subject to the limitation set forth in Section
4.1 of this Agreement) to the Investor within five (5) business days after the
Company's receipt of any Conversion Notice and, if required by Section 6(b)(iii)
of the Certificate of Designation, certificate(s) evidencing the Preferred
Shares being converted, or after receipt of the affidavit, agreement and
indemnification as set forth in Section 17 of the Certificate of Designation;
(iv) the Company shall have delivered notice of the conversion to the Other
Investors of their Preferred Shares on terms and conditions substantially
similar to those contained in this Section 10; and (v) the Company has satisfied
all conditions to the conversions with the Other Investors as set forth in the
Company's agreements with such Other Investors, which are substantially similar
to the conditions in this Section 10. Notwithstanding the above, the Investor
may convert its Preferred Shares (including Preferred Shares selected for
conversion), subject to the limitation set forth in Section 4.1 of this
Agreement, into Common Stock pursuant to Section 6 of the Certificate of
Designation on or prior to the date immediately preceding the Merger Transaction
Closing Date. For purposes of this agreement "MERGER TRANSACTION" shall mean any
merger, consolidation or other business combination of the Company, with or into
any other corporation, entity or person (whether or not the Company is the
surviving corporation) or there occurs any other corporate reorganization or
transaction or series of related transactions, and as a result thereof the
shareholders of the Company pursuant to such merger, consolidation,
reorganization or other transaction own in the aggregate less than 50% of the
voting power and common equity of the ultimate parent corporation or other
entity surviving or resulting from such merger, consolidation, reorganization or
other transaction.
11. GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law or choice of law, except for matters arising under the 1933
Act or the Exchange Act which matters shall be construed and interpreted in
accordance with such laws. Each of the Company and the Investor hereby agrees
that all actions or proceedings arising directly or indirectly from or in
connection with this Agreement shall be litigated only in the state or federal
courts located in the City of Wilmington, County of New Castle, State of
Delaware. The Company and the Investor consents to the jurisdiction and venue of
the foregoing courts and consent that any process or notice of motion or other
application to either of said courts or a judge thereof may be served inside or
outside the State of Delaware by registered mail, return receipt requested,
directed to the such party at its address set forth in this Agreement (and
service so made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other
16
manner as may be permissible under the rules of said courts. The parties hereto
hereby waive any right to a trial by jury in connection with any litigation
pursuant to this Agreement and the transactions contemplated hereby.
12. ASSIGNMENT; ENTIRE AGREEMENT; AMENDMENT
12.1 ASSIGNMENT. Neither this Agreement nor any rights hereunder may
be assigned by either party without the prior written consent of the
other party hereto; provided, however, that the Company may assign its
rights and obligations under this Agreement in connection with a
transaction described in Section 4(i) of the Certificate of
Designation and the Investor may assign its rights under this
Agreement to an affiliate of the Investor who agrees to be bound by
the terms hereof. To the extent that any party assigns this Agreement
with the prior written consent of the other or the Investor assigns
this Agreement as permitted herein to an affiliate of the Investor,
the provisions of this Agreement, the Subscription Agreement, the
Certificate of Designation and the Registration Rights Agreement shall
inure to the benefit of, be binding upon, and be enforceable by and
against any such assignee. Notwithstanding anything to the contrary
contained herein or any other Transaction Document, the Investor shall
be entitled to pledge the Securities in connection with a bona fide
margin account or other loan secured by the Securities.
12.2 Except for the Subscription Agreement, the Registration Rights
Agreement and the Certificate of Designation, this Agreement
supersedes all other prior oral or written agreements between the
Investor, the Company, their affiliates and persons acting on their
behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or
therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such
matters.
12.3 No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the holders of at
least a majority of the Preferred Shares then outstanding, and no
provision hereof may be waived other than by an instrument in writing
signed by the party against whom enforcement is sought. No such
amendment shall be effective to the extent that it applies to less
than all of the holders of the Preferred Shares then outstanding.
12.4 The Company has not, directly or indirectly, made any agreements
with the Investor relating to the terms or conditions of the
transactions contemplated by this Agreement except as set forth in
this Agreement.
17
13. PUBLICITY
The Company and the Investor shall consult with each other in issuing any
press releases or otherwise making public statements with respect to the
transactions contemplated hereby and no party shall issue any such press release
or otherwise make any such public statement without the prior written consent of
the others, which consent shall not be unreasonably withheld or delayed, except
that no prior consent shall be required if such disclosure is required by law or
applicable law, to the extent a party determines in good faith that it is
legally obligated to do so, in which such case the disclosing party shall
provide the other parties with prior notice of such public statement. The
Company shall not publicly or otherwise disclose the name of the Investor or any
of its affiliates without the Investor's prior written consent unless otherwise
required by law, in which case the Company shall inform the Investor of such
disclosure in writing prior to making such disclosure.
14. MUTUAL GENERAL RELEASE
14.1 In consideration of the Company entering into this Agreement and
the release set forth in Section 14.2, effective as of the Closing and
the Effectiveness (the "EFFECTIVE TIME") the Investor, on behalf of
itself and its heirs, executors, administrators, devisees, trustees,
partners, directors, officers, shareholders, employees, consultants,
representatives, predecessors, principals, agents, parents,
associates, affiliates, subsidiaries, attorneys, accountants,
successors, successors-in-interest and assignees (collectively, the
"INVESTOR RELEASING PERSONS"), hereby waives and releases, to the
fullest extent permitted by law, but subject to Section 14.3 below,
any and all claims, rights and causes of action, whether known or
unknown (collectively, the "INVESTOR CLAIMS"), that any of the
Investor Releasing Persons had or currently has as of the Effective
Time against (i) the Company, (ii) any of the Company's current or
former parents, shareholders, affiliates, subsidiaries, predecessors
or assigns, or (iii) any of the Company's or such other persons' or
entities' current or former officers, directors, employees, agents,
principals, investors, signatories, advisors, consultants, spouses,
heirs, estates, executors, attorneys, auditors and associates and
members of their immediate families other than any attorney or law
firm that delivered an opinion in connection with the Closing (as
defined in the Subscription Agreement) (collectively, the "COMPANY
RELEASED PERSONS"), including, without limitation, Investor Claims
arising out of or relating to the Subscription Agreement, the
Registration Rights Agreement, the Warrants and the Certificate of
Designation (collectively, the "RELEASED DOCUMENTS").
14.2 In further consideration of the Investor's entering into this
Agreement and the release set forth in Section 14.1, effective as of
the Effective Time, the
18
Company on behalf of itself and its heirs, executors, administrators,
devisees, trustees, partners, directors, officers, shareholders,
employees, consultants, representatives, predecessors, principals,
agents, parents, associates, affiliates, subsidiaries, attorneys,
accountants, successors, successors-in-interest and assignees
(collectively, the "COMPANY RELEASING PERSONS"), hereby waives and
releases, to the fullest extent permitted by law, but subject to
Section 14.3 below, any and all claims, rights and causes of action,
whether known or unknown (collectively, the "COMPANY CLAIMS"), that
any of the Company Releasing Persons had or currently has as of the
Effective Time against (i) the Investor, (ii) any of the Investor's
respective current or former parents, shareholders, affiliates,
subsidiaries, predecessors or assigns, or (iii) any of the Investor's
or such other persons' or entities' current or former officers,
directors, employees, agents, principals, investors, signatories,
advisors, consultants, spouses, heirs, estates, executors, attorneys,
auditors and associates and members of their immediate families
(collectively, the "INVESTOR RELEASED PERSONS"), including, without
limitation, any Company Claims arising out of or relating to the
Released Documents.
14.3 The Company and the Investor acknowledge that each of the
releases set forth in Sections 14.1 and 14.2 above does not affect (a)
any claim which any Company Releasing Person or Investor Releasing
Person may have under this Agreement and Section 6 or Section 7 of the
Registration Rights Agreement; (b) any claim which any Company
Releasing Person may have under Section 4.1 of the Subscription
Agreement; (c) any claim which an Investor Releasing Person may have
with respect to (i) Section 6A of the Subscription Agreement, (ii) any
breach by the Company of any of its representations and warranties set
forth in any of Sections 3.3, 3.4(a), 3.4(b), 3.5, 3.7 or 3.14 or the
first sentence of Section 3.9 of the Subscription Agreement or (iii)
Section 10.3 of the Subscription Agreement with respect to the matters
described in the immediately preceding clauses (i) and (ii); (d)
subject to waivers contained in Sections 7, 8 and 9, any continuing or
future obligation under the Certificate of Designation, Registration
Rights Agreement and the following Sections of the Subscription
Agreement: 5, 6, 6A, 7, 8, 9, 10.1, 12 and 13; and (e) any matter set
forth in the Acknowledgment Letter, dated as of the date of this
Agreement, delivered by the Chief Executive Officer of the Company to
the Investor.
15. TERMINATION
In the event that the Closing shall not have occurred with respect to the
Investor on or before the date which is five (5) business days after the date of
this Agreement (or such later date as may be mutually agreed in writing by the
Company and the Investor) (the "TERMINATION DATE") due to the Company's or the
Investor's failure to satisfy the conditions set forth in
19
Sections 1.1, 1.2 and 1.3 above (and the nonbreaching party's failure to waive
such unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section
15, the Company shall remain obligated to reimburse the Investor (provided that
it is not a breaching party) for the expenses described in Section 5.3 above.
Subject to the terms and conditions of this Agreement, each of the Company and
the Investor will use its best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary or desirable to
satisfy the conditions to the other party's obligation to cause the Closing and
the Effectiveness to occur on or before the Termination Date.
16. NOTICES, ETC.; INDEMNITY
16.1 NOTICES. Any notice, demand or request required or permitted to
be given by either the Company or the Investor pursuant to the terms
of this Agreement shall be in writing and will be deemed to have been
delivered (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the
sending party); or (iii) upon delivery by a nationally recognized
delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Worldwide Xceed Group, Inc.
640 North LaSalle Street
Suite 590
Chicago, Illinois 60610
Telephone: (312) 360-6587
Facsimile: (312) 360-6575
Attention: Richard R. Dennerline,
Chief Legal Officer
With a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6000
Facsimile: (617) 526-5000
Attention: Thomas S. Ward
20
If to the Investor, to it at the address and facsimile number set
forth on the Schedule, with copies to Investor's representatives as
set forth on the Schedule, or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient
party has specified by written notice given to each other party five
days prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver
or other communications, (B) mechanically or electronically generated
by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission
or (C) provided by a nationally recognized overnight delivery service
shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.
16.2 INDEMNIFICATION. Each party shall indemnify the other against any
loss, cost or damages (including reasonable attorney's fees and
expenses) incurred as a result of such parties' breach of any
representation, warranty, covenant or agreement in this Agreement.
17. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument.
18. SURVIVAL; SEVERABILITY
The representations, warranties, covenants and agreements of the parties
hereto shall survive the Closing and the Effectiveness notwithstanding any due
diligence investigation conducted by or on behalf of the Investor. In the event
that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force or effect without said provision; provided that no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
19. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
[Remainder of Page Intentionally Left Blank]
21
IN WITNESS WHEREOF, the Company and the Investor have caused this
Waiver Agreement to be duly executed as of the date first written above.
COMPANY: INVESTOR:
WORLDWIDE XCEED GROUP, INC. LEONARDO, L.P.
By: /s/ Howard A. Tullman By: Angelo, Gordon & Co., L.P.
---------------------------------
Name: Howard A. Tullman Its: General Partner
-------------------------------
Title: Chief Executive Officer
By: /s/ Michael L. Gordon
---------------------------------------
Name: Michael L. Gordon
Title: Chief Operating Officer
22
SCHEDULE
INVESTOR'S ADDRESS AND NUMBER OF NUMBER OF
INVESTOR'S NAME FACSIMILE NUMBER PREFERRED SHARES WARRANTS
- ---------------------------------- ------------------------------- ----------------- -----------------
Leonardo, L.P. C/o Angelo, Gordon & Co., L.P. 8,259 61,091
245 Park Avenue, 26th Floor 450,000
New York, New York 10167
Attention: Ari J. Storch
Adam J. Chill
Telephone: (212) 692-2000
Facsimile: (212) 867-6449
Residence: Cayman Islands
(REPRESENTATIVES)
C/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
Attention: Ari J. Storch
Adam J. Chill
Telephone: (212) 692-2000
Facsimile: (212) 867-6449
Residence: Cayman Islands