Exhibit 10.2
Worldwide Data, Inc.
Financing Terms Agreement
Dated as of September 20, 1999
Issuer: Worldwide Data, Inc. ("WWDI" or "Company")
Purchaser: Generation Capital Associates ("GCA") and other purchasers
(collectively "Purchaser(s)"). All Purchaser(s) shall be
"accredited investors" as defined by Rule 501 of Regulation
D.
Securities: (a) Convertible Debentures (the "Debenture(s)") convertible
into shares of the common stock of WWDI ("Common Stock").
The Debenture(s) shall have a maturity date of twelve
months; the unconverted principal balance and any accrued
and unpaid interest shall be due and payable in cash on such
date. The maturity date of the Debenture(s) shall be
automatically extended for up to eighteen (18) one-month
periods, unless the Purchaser(s) or any subsequent holder,
(the "Holder(s)") notifies the Company in writing not less
than 10 days prior to any expiration that the Debenture(s)
will not be extended.
(b) In lieu of WWDI paying a document preparation fee to
GCA, WWDI shall issue to GCA 25,000 cashless exercise
warrants ("GCA Warrants") to purchase 25,000 shares of
Common Stock exercisable at $2.50 for five years from the
Closing Date (as defined herein). The GCA Warrants shall
have a value of $250.00 ($0.01 per warrant). The shares of
Common Stock issuable upon exercise of GCA Warrants are
defined as the "GCA Warrants Shares."
Investment Size: $250,000 of Debenture(s) shall be purchased on the Closing
Date.
Conversion The Debenture(s) are convertible into shares of Common Stock
Terms: ("Conversion Shares") at any time after the "Closing Date"
which is the date upon which the $250,000 purchase price of
the Debenture(s) is wired to the Company). The "Effective
Date" of each conversion shall be the date set forth on the
conversion notice ("Conversion Notice"), provided such
Conversion Notice is received by David A. Rapaport, Esq. as
escrow agent ("Escrow Agent") and the Company, via U.S.
mail, facsimile, overnight courier, or hand delivery no
later than the fifth business day after such date. The price
at which the Debenture(s) shall be converted (the
"Conversion Price") shall be the average closing bid prices
of Company's Common Stock as quoted by NASDAQ level III for
the five-day trading period (the "Average Price") ending on
the day prior to the Effective Date times (x) 60 %
("Multiplier"). The Multiplier is subject to being decreased
in the event WWDI does not register the shares underlying
the Debenture(s) as provided in "Registration Rights" below.
Interest: 10 % annual rate, payable monthly in arrears in cash (or
WWDI common stock ("Interest Shares") at the option of WWDI,
only if such Interest Shares have been registered and are
freely tradable by Holder(s)). Interest shall be payable on
the first business day of each month commencing November 1,
1999. If interest is paid in WWDI common stock the stock
shall be valued at the Multiplier times the Average Price
for the five trading days immediately preceding the date the
interest payment is due; provided the interest rate shall be
increased retroactively to 15% per annum from the date of
issue if the Conversion Shares have not been registered by
the one hundred twentieth day following the Closing Date (as
defined herein) and 1% for each month or part thereof that
such registration statement has not been declared effective
to a maximum rate of interest which is the lesser of (a) the
maximum rate of interest allowable by law, or (b) 25%.
Securities Act WWDI shall file a registration statement including the
Registration: Conversion Shares, the Interest Shares and the GCA Warrants
Shares ("Registration Statement") as soon as reasonably
practicable after the Closing Date and shall use its best
efforts to cause such Registration Statement to be declared
effective not later than one hundred twenty days from the
Closing Date. In the event the Registration Statement is not
effective by the one hundred twentieth day following the
Closing Date, the Multiplier shall be decreased to 55% and
shall be further decreased 1 % for each month or part
thereof until the Conversion Shares have been registered or
may be resold in compliance with Rule 144; provided the
Multiplier shall not be reduced to less than 35%.
Limitations: No Purchaser or subsequent holder, ("Holder" or "Holder(s)")
of Debenture(s) and/or GCA Warrants shall be permitted to
convert any Debenture(s) to the extent that such conversion
or exercise would cause any Holder to be the beneficial
owner of more than 5% of the then outstanding WWDI Common
Stock, at that given time. This limitation shall not be
deemed to prevent any Holder from acquiring more than an
aggregate of 5% of the Common Stock, so long as such Holder
does not beneficially own more than 5% of WWDI Common Stock,
at any given time.
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Prepayment: The Debenture(s) may not be prepaid or redeemed, in whole or
in part, without the written consent of the Holder(s).
Transferability: The Debenture(s) shall be freely transferable by the
Purchasers or any Holder(s) provided such transfer is in
compliance with applicable United States and state
securities laws.
Escrow of To facilitate the delivery of the Conversion Shares upon any
Common Stock: conversion of the Debenture(s) in whole or in part or the
fall or partial exercise of the GCA Warrants, WWDI will
issue 400,000 shares WWDI Common Stock ("Escrow Shares") in
the name of Escrow Agent and will deliver the certificates
for such shares with legend to the Escrow Agent within three
(3) business days of the mutual execution of this Financing
Terms Agreement.
If at any time, or from time to time, the Escrow Agent is
holding less than 200% of the number of Escrow Shares
required to convert the remaining principal balance of the
Debenture(s) based on the then Average Price plus up to
25,000 shares of WWDI Common Stock issuable upon exercise of
the GCA Warrants, the Escrow Agent and/or Holder(s) may
request in writing that the Company deposit enough
additional shares of Common Stock with the Escrow Agent
("Additional Escrow Shares")) so that the Escrow Agent is
holding 200 % of the number of Escrow Shares required to
convert such remaining principal balance of the Debenture(s)
plus up to 25,000 shares of WWDI Common Stock issuable upon
exercise of the GCA Warrants. The failure of the Company to
deliver such Additional Escrow Shares within ten business
days of such demand shall be a material default of the
Debenture(s) and in addition to any other remedies,
including without limitation specific performance (to which
Holder(s) are hereby entitled), shall entitle the Holder(s)
to an immediate distribution of Escrow Shares in an amount
equal to 25,000 Escrow Shares, plus an additional 2,500
Escrow Shares for each day after the tenth business day such
failure to deliver the Additional Escrow Shares of Common
Stock continues. (Such distribution shall be made by the
Escrow Agent to the Holder(s) pro-rata to the principal
amount of Debenture(s) held by each Holder.)
As soon as reasonably practicable after the Escrow Shares
have been registered for resale or may be sold without
restriction pursuant to SEC Rule 144 the Escrow Agent will
deposit the Escrow Shares and any Additional Escrow Shares
into a securities brokerage account. The Company will take
all necessary actions to cause the Escrow Shares and any
Additional Escrow Shares to be transferred into "street
name" at the request of the Escrow Agent's securities
brokerage firm. Upon the earlier
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Escrow of of (i) thirty (30) days after the date upon which the last
Common Stock remaining Debenture(s) has been fully converted into
(cont'd.): Conversion Shares with interest paid in full; or (ii) the
full payment of the remaining principal and interest balance
of the Debenture(s), the Escrow Agent shall return any
remaining Escrow Shares to WWDI.
If at any time the Escrow Agent is required to deliver
Conversion Shares that have not been registered for resale
or may not be sold under Rule 144 the Escrow Agent shall
cause the transfer agent place a standard restrictive legend
on such shares prior to transfer and delivery.
Escrow of To facilitate the delivery of the Debenture(s) upon receipt
Debenture(s): of payment from Purchaser(s) the Company shall deliver to
the Escrow Agent within three (3) business days of the
mutual execution of this Financing Terms Agreement five (5)
Debentures which have been duly executed by the Company but
which are blank as to name and address of the Purchaser,
principal amount and date of issuance ("Issue Date").
The Escrow Agent shall upon receipt of good funds for the
purchase of a Debenture fill in the name and address of the
Purchaser, principal amount and Issue Date. The Escrow Agent
shall deliver the completed Debenture to the Purchaser and
the escrowed funds together with a copy of the completed
Debenture to the Company. Upon issuance of the entire
$250,000 of Debentures the Escrow Agent shall return any
remaining unissued blank Debentures to the Company.
Representations WWDI makes the following representations and warranties to
and Warranties of the Purchasers:
WWDI:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has the
requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is
now being conducted.
(b) Authorizations Enforcement. The Company has the
requisite corporate power and authority to enter into and
perform this Financing Terms Agreement and the Escrow
Agreement and to issue and sell the Debenture(s) and the
Conversion Shares in accordance with the terms hereof. The
execution, delivery and performance of this Financing Terms
Agreement and the Escrow Agreement by the Company and the
consummation by it of the transactions contemplated hereby
and thereby have been duly and
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Representations validly authorized by all necessary corporate action, and no
and Warranties of further consent or authorization of the Company or its
WWDI (cont'd.): Board of Directors or stockholders is required. This
Financing Terms Agreement has been duly executed and
delivered by the Company. Each of this Financing Terms
Agreement and the Escrow Agreement constitutes, or shall
constitute when executed and delivered, a valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies
or by other equitable principles of general application.
(c) Capitalization. WWDI represents and warrants that it has
10,010,000 shares of Common Stock authorized; and no more
than 3,0835,500 shares have been issued and are outstanding;
and that it has 10,000 shares of preferred stock authorized
and that none of such shares are issued and outstanding; and
that no more than 1,340,000 shares of Common Stock are
reserved for warrants.
(d) Issuance of Debenture(s) and Conversion Shares. The
Debenture(s) and the Conversion Shares to be delivered to
the Escrow Agent have been duly authorized by all necessary
corporate action. The Conversion Shares when delivered to
the Holder(s) upon conversion of the Debenture(s) in
accordance with the terms thereof, will be validly issued
and outstanding, fully paid and non-assessable.
Representations GCA hereby makes the following representations and
and Warranties of warranties to the Company:
GCA:
(a) Accredited Purchaser. GCA is an "accredited investor" as
defined in Regulation D promulgated under the Securities
Act.
(b) Organization, Good Standing and Power. GCA is a limited
partnership organized, validly existing and in good standing
under the laws of the State of New York and has the
requisite power to own, lease and operate its properties and
assets and to conduct its business as it is now being
conducted.
(c) Authorization; Enforcement. GCA has the requisite power
and authority to enter into and perform this Financing Terms
Agreement and the Escrow Agreement and to purchase the
Debenture(s) in accordance with the terms hereof. The
execution, delivery and performance of this Financing Terms
Agreement and the Escrow Agreement by GCA and the
consummation by it of
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Representation the transactions contemplated hereby and thereby have been
and Warranties of duly and validly authorized by all necessary action, and
GCA (cont'd.): no further consent or authorization of GCA, its general
partner or its limited partner is required. This Financing
Terms Agreement has been duly executed and delivered by GCA.
Each of this Financing Terms Agreement and the Escrow
Agreement constitutes, or shall constitute when duly
executed and delivered by all parties thereto, a valid and
binding obligation of GCA enforceable against GCA in
accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies
or by other equitable principles of general application.
(d) GCA has had full access to all the information which GCA
considers necessary or appropriate to make an informed
decision with respect to GCA's investment. GCA acknowledges
that GCA has had the opportunity to ask questions of, and
receive answers from, or obtain additional information from,
the executive officers of the Company concerning the
financial and other affairs of the Company, and, to the
extent deemed necessary, GCA has asked such questions and
received satisfactory answers and desires to invest in the
Company. In evaluating the suitability of any vestment in
the Company, GCA has not relied upon any representations or
other information (whether oral or written) other than as
set forth in this Agreement or as contained in any documents
delivered or answers given in writing by the Company to
questions furnished to the Company. To the extent GCA has
not sought information regarding any particular matter, GCA
represents that it had no interest in doing so and that such
matters are not material to GCA in connection with this
investment.
(e) GCA has been advised and acknowledges that no federal or
state agency has made any finding or determination as to the
fairness or merits of an investment in the Company and that
no such agency has made any recommendation or endorsement
whatsoever with respect to such an investment. GCA
acknowledges that it is aware of an NASD inquiry into the
trading of WWDI common stock.
(f) GCA considers itself to be a sophisticated investor in
companies similarly situated to the Company, and GCA has
substantial knowledge and experience in financial and
business matters (including knowledge of finance, securities
and investments, generally, and experience and skill in
investments based on actual participation) such that GCA is
capable of evaluating the merits and risks of the
prospective investment in the Company.
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Representation (g) GCA is acquiring the securities hereunder, as principal,
and Warranties of for GCA's own account for investment purposes only, and not
GCA (cont'd.): with a present intention toward or for the resale,
distribution or fractionalization thereof, and no other
person has a beneficial interest in such securities.
Events of Default: Normal and customary events of default: non-payment of
interest, bankruptcy, breach of representations and
warranties, etc. The failure of the Company to have an
effective registration statement by one hundred twenty days
following the Closing Date.
Purchase of (a) Purchaser(s) shall deposit with the Escrow Agent
Debenture(s): $250,000 for the purchase of the Debenture(s) within three
(3) business days of the receipt by the Escrow Agent of the
certificate(s) for the 400,000 Escrow Shares registered in
the name of David A. Rapaport, Esq., the GCA Warrants and
the five (5) executed blank Debentures.
(b) The Escrow Agent shall wire to the Company the $250,000
purchase price for the Debenture(s) within two (2) business
days of the later of (i) receipt by the Escrow Agent of the
certificates for the 400,000 Escrow Shares, the five (5)
executed blank Debentures and the GCA Warrants, and (ii)
receipt of the $250,000 from Purchaser(s).
Additional If WWDI shall issue any shares of common stock or securities
Securities exercisable or convertible into common stock (except for (a)
Issuance: the issuance of common stock upon the exercise of employee
stock options and outstanding warrants; (b) the issuance of
Common Stock or securities convertible or exercisable into
Common Stock for services rendered to WWDI; (c) shares of
Common Stock issued in an underwritten public offering; or
(d) shares of Common Stock which are restricted for resale
for at least one year from the issue date) from the date of
this Financing Terms Agreement until ninety days following
the earlier of (a) conversion into Common Stock of all
principal and accrued interest under the Debenture(s), or
(b) payment in full of all principal and accrued interest
under the Debenture(s), GCA shall have the right of first
refusal to purchase such securities, and in this connection,
WWDI, prior to the issuance of such securities, shall
provide a written term sheet setting forth the terms and
conditions of such offering, and GCA shall respond within
twenty (20) business days of receipt of such term sheet as
to whether GCA shall exercise its right of first refusal
granted hereunder. In the event that GCA does not elect to
exercise its right of first refusal within such twenty (20)
business days, WWDI shall have the right to sell such
securities to a third party on terms no more
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Additional favorable to the third party than those set forth in the
Securities term sheet for a period of sixty (60) days following the end
Issuance of said twenty (20) business day period.
(Cont'd.):
Jurisdiction and This Financing Terms Agreement, the Debenture(s) and the
Choice of Law Escrow Agreement shall be governed by the laws of the state
of Georgia and all of the parties to such agreements and
Debenture(s) agree to submit to the personal jurisdiction of
the state and Federal courts located in Fulton County,
Georgia.
Binding The parties shall be legally bound by the above terms and
Agreement: shall execute such further documents as may be required to
implement the intentions and provisions of this Financing
Terms Agreement, including without limitation the Escrow
Agreement ,the Debenture(s) and the GCA Warrants
Agreed to and Accepted by:
Worldwide Data, Inc.
By: /s/ Bronson Conrad 9/24/99
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Bronson Conrad Date
President
Generation Capital Associates
By: /s/ Frank E. Hart 9/30/99 (Closing Date)
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Frank E. Hart Date
General Partner
/s/ David A. Rapaport, Esq. 9/27/99
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David A. Rapaport, Esq. Date
Escrow Agent
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