Exhibit 4.6
SECOND MODIFICATION AGREEMENT
AGREEMENT ("Agreement") made as of this 7th day of June, 2004 by and among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), TW CABLE, LLC ("TW"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("McPhee")
and DATAWORLD SOLUTIONS, INC. (sometimes hereinafter "DataWorld" or the
"Company").
WHEREAS, by agreement dated December 4, 2002 ("2002 Agreement"), among the
above parties, various rights, obligations, liabilities and securities
pertaining to the Company were restructured and compromised; and
WHEREAS, pursuant to a Modification Agreement dated September 24, 2003
("2003 Agreement") certain of the obligations set forth in the 2002 Agreement
were further modified and compromised; and
WHEREAS, the parties now wish to enter into a further modification of these
rights, obligations, liabilities and securities and to further compromise the
same.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth below, the adequacy and sufficiency of which is hereby acknowledged by
all parties, it is agreed as follows.
1 All of the recitals set forth above are hereby incorporated into this
Agreement as if fully set forth herein and are specifically made a part of this
Agreement.
2 The parties hereby acknowledge that pursuant to and in accordance with the
2002 Agreement and 2003 Agreement, the following has occurred: (a) 500,000
shares of restricted stock of DataWorld were issued to ▇▇▇▇▇▇▇▇▇ in exchange for
return of all preferred stock of the Company previously owned by ▇▇▇▇▇▇▇▇▇
and/or TW; and (b) the personal liability and guaranty of McPhee as set forth in
the 2002 Agreement of approximately One Hundred Thirty-three Thousand ($133,000)
Dollars has been fully satisfied. In early 2002, TW and/or ▇▇▇▇▇▇▇▇▇ obtained
three separate judgments against DataWorld and/or McPhee for a total in excess
of $1,350,000. In an effort to
satisfy these judgments, the parties entered into the 2002 Agreement. The
Company acknowledges that it has defaulted under the 2002. Accordingly, the
provisions of the 2002 Agreement reducing the debt of the Company to $250,000
owed to TW and $168,000 owed to ▇▇▇▇▇▇▇▇▇ (cumulatively the "2002 Settlement
Amount") is no longer binding on either TW or ▇▇▇▇▇▇▇▇▇. Notwithstanding the
Company' default, in return for the issuance of 110,000 shares by the Company to
TW and/or ▇▇▇▇▇▇▇▇▇ as provided in Paragraph 4 of this Agreement and the
establishment by McPhee of the escrow for 312,500 shares of the Company's stock
as provided in Paragraph 5.1(c) of this Agreement, TW and ▇▇▇▇▇▇▇▇▇ hereby agree
to eliminate the debt owed by the Company to TW and ▇▇▇▇▇▇▇▇▇ and further agree
to issue a satisfaction of the judgments obtained by TW and ▇▇▇▇▇▇▇▇▇ against
the Company and/or McPhee. The Company hereby agrees to pay the reasonable cost
of legal fees and expenses to TW and/or ▇▇▇▇▇▇▇▇▇ of preparing the Satisfaction
of Judgments and forwarding the same to counsel for DataWorld who will arrange
to file the same in the appropriate court and/or County Clerk's office. In the
event the Company does not issue the 110,000 shares as provided in paragraph 4
of this Agreement and the escrow is not established and funded with 312,500
shares as provided in Paragraph 5.1(c) of this Agreement, all within thirty (30)
business days of the date this Agreement is signed by the last signatory
thereto, then this Agreement shall be null and void.
3 ▇▇▇▇▇▇▇▇▇ hereby represents that he has not sold any of the 500,000 shares
referred to in Paragraph 2 above and further acknowledges that the limitations
on sales of the Company stock by ▇▇▇▇▇▇▇▇▇ as set forth in Paragraph 5 of the
2002 Agreement remain in full force and effect, to wit; that ▇▇▇▇▇▇▇▇▇ will
limit his sale of stock in any one day to no more than ten (10%) percent of the
greater of the (a) current or (b) previous day's total trading volume in the
Company's stock, provided that regardless of the daily volume limitation,
▇▇▇▇▇▇▇▇▇ may sell a minimum of 25,000 shares per calendar month and that if
▇▇▇▇▇▇▇▇▇ sells less than 25,000 shares in any month, such shortfall may not be
carried over to the following month.
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4 The Company hereby agrees to issue 110,000 shares of its common stock to TW
and ▇▇▇▇▇▇▇▇▇, to be divided between them as they shall determine in exchange
for the further compromise and full extinguishment of the 2002 Settlement
Amount. The stock to be issued will be restricted and the stock certificates
shall bear a legend indicating that the securities have not been registered
under the Securities Act of 1933, as amended (the "Act") and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the absence of an
effective Registration Statement for such securities under the Act or an opinion
of counsel that such registration is not required. Hereinafter, the Company
shall bear all costs and expenses in the issuance and delivery of said shares to
▇▇▇▇▇▇▇▇▇ and TW and, when permitted by law, in obtaining any opinion from the
Company's legal counsel needed to remove the legend from any stock certificate
for the 110,000 shares to be issued pursuant to this Paragraph 4.
5 McPhee and DataWorld hereby represents that
..1 The Class 7 Creditors:
..2 (a) Pursuant to a plan of reorganization under Chapter 11 of the US
Bankruptcy Code in the Vertex Computer Cable & Products, Inc. bankruptcy
proceeding, the Class 7 Unsecured Creditors ("Class 7 Creditors") were to
receive certain amounts which were guaranteed by ▇▇▇▇▇▇▇▇▇; (b) in May 2000, the
Company and the Official Committee of the Class 7 Creditors modified the
Company's obligations (which agreement was subsequently approved by the US
Bankruptcy Court in June, 2000) pursuant to which there is now owed
approximately Two Hundred Seventy-five Thousand ($275,000) Dollars for which
▇▇▇▇▇▇▇▇▇ is still personal liable under a guaranty to the Class 7 Creditors.
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..3 (b) The Company hereby acknowledge that the obligations owed to the Class 7
Creditors is first and foremost an obligation of the Company and not ▇▇▇▇▇▇▇▇▇.
Accordingly, the Company shall use its best efforts to make the required
payments. In the event the Company has any contact with the Class 7 Creditors or
the Official Committee concerning a compromise of the debt owed to the Class 7
Creditors, a part of such negotiations will be to release ▇▇▇▇▇▇▇▇▇ from his
guaranty.
..4 (c) As partial collateral for the Company's obligation to make the above
payment, McPhee hereby agrees to place in escrow with the law firm of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, P.C. located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, a
sufficient number of the shares of common stock of the Company that McPhee owns
so that the value of such stock (based upon a 30 trading day average of the
quoted value of the Company's stock on the "pink sheets", bulletin board or any
other established securities market on which DataWorld's stock is traded) is at
least equal to One Hundred Twenty-five Thousand ($125,000) Dollars. The parties
agree that as of June 2, 2004, the average value of each share of the Company's
common stock for the past 30 trading days was quoted at 40 cents. Accordingly,
312,500 shares of the Company's stock owned by McPhee will be placed into escrow
pursuant to the terms of a separate escrow agreement, annexed hereto as Exhibit
A. Thereafter, on the first business day of August, November, February and April
of each year while the escrow is still in effect, a similar valuation will be
ascertained and the stock being held in escrow will be revised accordingly. In
addition to the quarter annual valuation, in the event that the price of a share
of the Company's common stock falls below 10 cents per share(based upon a 30
trading day average of the quoted value of the Company's stock as indicated
above), McPhee shall within ten (10) business days thereafter place an
additional number of shares of common stock into the escrow account so that the
value of such stock (also based upon a 30 day average of the quoted value of the
Company's stock as set forth above) remains at least at One Hundred Twenty-five
Thousand ($125,000) Dollars.
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..5 (d) McPhee further represents that he currently holds and shall continue to
maintain a minimum of 1,000,000 shares of common stock of the Company. However,
if there shall come a time when McPhee has insufficient shares of the Company
stock to fund the escrow account as provided herein, then DataWorld shall
provide the necessary shares to fund the escrow.
..6 (e) In the event there is a default under this Agreement and the shares of
stock in the escrow account are delivered to ▇▇▇▇▇▇▇▇▇ in accordance with the
Escrow Agreement attached hereto as Exhibit "A", the Company shall bear all
costs and expenses in the issuance and delivery of the shares to ▇▇▇▇▇▇▇▇▇ and
in obtaining any opinion from the Company's legal counsel needed to remove the
legend from any stock certificate for the escrowed shares of stock.
..7 (f) ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ hereby agree that once the obligations owed by the
Company to the Class 7 Creditors is reduced to the amount of $200,000,
thereafter, any further percentage reduction in such debt shall also serve to
reduce the stock value that must continue to be held in escrow on a
proportionate basis and when and if the amount due the Class 7 Creditors has
been satisfied, the escrow will terminate.
..8 that upon execution of this Agreement the Company shall instruct its current
attorneys to issue a letter (which letter shall be delivered to ▇▇▇▇▇▇▇▇▇, ▇▇
and their designated brokerage firm within twenty (20) business days after the
date this Agreement has been executed by all parties), with respect to the
following:
..9 (a) confirming that the 500,000 shares issued to ▇▇▇▇▇▇▇▇▇ as referenced in
paragraph "2" herein may be sold in accordance with Rule 144 of the Securities
Act of 1933 as soon as DataWorld becomes current in its reporting requirements,
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..10 (b) advising of the required holding period pursuant to Rule 144 for the
shares of common stock to be issued to ▇▇▇▇▇▇▇▇▇ in accordance with paragraph
"4_ herein, and
..11 (c) identifying the date any required holding period would commence pursuant
to Rule 144 if the shares proposed to be held in escrow in accordance with
paragraph "5" herein are obtained.
..12 that within twenty (20) business days after the execution of this Agreement,
the Company's Board of Directors shall issue a letter confirming:
..13 (a) that McPhee has the requisite authority to enter into this Agreement on
behalf of the Company; and
..14 (b) that the Company has settled all outstanding disputes with ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ and acknowledging that an agreement with ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ has
been fully executed pursuant to which ▇▇▇▇▇▇▇▇▇ has agreed to reduce the
outstanding obligation of the Company to ▇▇▇▇▇▇▇▇▇ by an amount in excess of
$1,000,000.
6 DataWorld represents as follows:
..1 It is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and
authority to enter into this Agreement;
..2 The shares of stock when issued to ▇▇▇▇▇▇▇▇▇/TW as provided above will be
duly authorized, validly issued, fully paid and non-assessable, free and clear
of any and all liens and encumbrances;
..3 All action on the part of DataWorld necessary for the authorization,
execution, delivery and performance of this Agreement has been taken;
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..4 This Agreement is duly executed and delivered by DataWorld and is the valid
and binding agreement of DataWorld, enforceable in accordance with its terms.
7 TW and ▇▇▇▇▇▇▇▇▇ represent as follows:
..1 TW is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of New York and has all requisite
power and authority to enter into this Agreement;
..2 All action on the part of TW necessary for the authorization, execution,
delivery and performance of this Agreement has been taken;
..3 This Agreement is duly executed and delivered by TW and is the valid and
binding agreement of TW, enforceable in accordance with its terms; and
..4 ▇▇▇▇▇▇▇▇▇ is acquiring the stock of DataWorld for investment purposes only
and not with a view to, or for sale in connection with, any distribution thereof
nor with any present intention to sell such shares of stock, except in
compliance with the Securities Act of 1933, as amended, and further represents
that the stock will not be sold or otherwise transferred or disposed of in any
transaction which, in the reasonable opinion of counsel for DataWorld, would be
in violation of the Securities Act of 1933, as amended.
8 Except for the obligations contained in this Agreement, the parties
acknowledge and agree as follows: (a) DataWorld and McPhee hereby release and
discharge TW Cable, LLC and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ from all claims, demands, actions,
judgments and executions that either DataWorld and/or McPhee ever had or now has
against either TW and/or ▇▇▇▇▇▇▇▇▇; and (b) TW and ▇▇▇▇▇▇▇▇▇ hereby acknowledge
that except for the obligations contained in this Agreement, that all
obligations of DataWorld and McPhee to either or both of TW and ▇▇▇▇▇▇▇▇▇ are
fully extinguished including any accrued and unpaid interest, dividends, or
other amounts that may have previously been due to TW and/or ▇▇▇▇▇▇▇▇▇; that all
security interests or claims against the Company or its assets are no longer
effective and that the Company is hereby authorized to file any termination
statement or similar documents without the signatures of either TW or ▇▇▇▇▇▇▇▇▇
in order to extinguish any such liens or claims as the same may be as of record
(if such documents are filed, copies of the same shall promptly be forwarded to
TW and ▇▇▇▇▇▇▇▇▇ by the Company); and (c) TW and ▇▇▇▇▇▇▇▇▇ hereby release and
discharge DataWorld and McPhee from all claims, demands, actions, judgments and
executions that either TW and/or ▇▇▇▇▇▇▇▇▇ ever had or now has against either
DataWorld and/or McPhee.
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9 As an inducement for ▇▇▇▇▇▇▇▇▇ and TW to enter into this Agreement, McPhee and
the Company have agreed to (a) issue shares of the Company's common stock as
specified in Paragraph 4 of this Agreement; (b) establish an escrow of the
Company's common stock as partial collateral against the Company's obligations
to the Class 7 Creditors as specified in Paragraph 5.1(c) of this Agreement; and
(c) to maintain that collateral at a value of $125,000 as specified in Paragraph
5.1(c) of this Agreement. In the event (a) the Company does not issue 110,000
shares of its common stock as required under Paragraph 4 of this Agreement
within thirty (30) business days after the date this Agreement has been executed
by all parties; (b) McPhee does not initially place into escrow, common stock of
the Company which he owns as specified in Paragraph 5.1(c) of this Agreement
within thirty (30) business days after the date of this Agreement; (c) does not
place into escrow such additional shares of the common stock of the Company
which he owns, again as specified in Paragraph 5.1(c) of this Agreement within
thirty (30) business days after the event triggering the requirement for such
additional shares of stock to be placed into escrow; or (d) the Class 7
Creditors make a demand on ▇▇▇▇▇▇▇▇▇'▇ guaranty which ▇▇▇▇▇▇▇▇▇ honors by
payment to the Class 7 Creditors which amount is not reimbursed to ▇▇▇▇▇▇▇▇▇ by
the Company within thirty (30) days after demand for reimbursement, then and in
any of those events, the Company shall be in breach of its obligations and
▇▇▇▇▇▇▇▇▇ shall have all rights and remedies as provided by law and shall also
have the right to demand that the Escrow Agent deliver the shares of stock being
held in escrow to ▇▇▇▇▇▇▇▇▇ up to the amount, but not exceeding the amount, of
damages sustained by ▇▇▇▇▇▇▇▇▇.
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10 The parties agree that any dispute, controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be submitted to and
determined by arbitration pursuant to the rules of the American Arbitration
Association in effect at the time of the commencement of the arbitration ("AAA
Rules"). Unless otherwise provided in this Agreement, any Arbitration must be
commenced within two (2) years from the arising of the breach, dispute,
controversy or claim. If not timely commenced, no arbitration or lawsuit may be
commenced thereafter with regard to such matter nor may the same be asserted in
any subsequent arbitration or lawsuit by way of a counterclaim or affirmative
defense. The issues shall be submitted to a single arbitrator selected from
panels of arbitrators of the said association. If the parties are unable to
agree upon an arbitrator within thirty (30) days of the commencement of the
arbitration, the arbitrator shall be selected in accordance with the AAA Rules.
Any award rendered shall be binding upon the parties and judgment upon such
award may be entered in any court of competent jurisdiction. The arbitrator
shall have the power to award a decree of specific performance, punitive
damages, temporary or permanent injunctive relief or any other legal or
equitable remedy and said award shall be binding upon the parties as though
decreed by a court of competent jurisdiction. In addition, the arbitrator shall
retain the right to award equitable relief in order to carry out the provisions
of this Agreement and/or to effectuate the mechanisms set forth in this
Agreement. However, the decisions and rulings of the arbitrator must be in
writing setting forth findings of fact and law and shall be consistent with and
limited to the terms of this Agreement. Any decree or finding inconsistent with
this Agreement may be challenged by any party in a court of competent
jurisdiction. All costs, expenses and fees of the arbitration and attorneys',
accountants' and expert witness fees shall be paid as directed by the
arbitrators, who shall have the power to award the prevailing party all such
fees, costs and expenses. Each party shall bear its own costs, fees and expenses
not awarded by the arbitrators. Notwithstanding anything to the contrary
contained in this Section, any party shall have the right to apply to a court of
competent jurisdiction for and to obtain a temporary restraining order and/or
injunctive relief in order the prevent or ameliorate irreparable damage pending
the commencement and outcome of the arbitration.
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11 The parties hereby agree to execute and deliver such other and further
documents as may be necessary or appropriate to carry out the intended purpose
of this Agreement.
12 All notices and other communications required to be given under this
Agreement shall be valid only if in writing and sent by registered mail,
certified mail, express mail, return receipt requested, or by overnight courier
or by personal delivery with proof of delivery request to the person entitled
thereto at the respective addresses then set forth below:
If to Company:
DataWorld Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
50 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Blvd., Ste. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to TW:
TW Cable, LLC
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇▇▇▇:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
c/o TW Cable, LLC
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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If to McPhee:
▇▇▇▇▇▇ ▇▇▇▇▇▇
c/o DataWorld Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as a party or their attorney may hereafter designate in
accordance with the notice provisions of this Agreement. All such notices or
other communications shall be properly addressed with appropriate postage/costs
prepaid. All such notices or communications shall be deemed given when delivered
to the proper party unless the intended recipient refuses to accept the same or
the notice is returned as undeliverable because the intended recipient did not
sign the requested receipt or failed to pick up the notice from the office of
the carrier. In such event, such notice or communication shall be deemed given
when such delivery was first attempted to be made on the intended recipient.
1 This Agreement may be executed in one or more counterparts, each of which
shall be an original and all of which together shall constitute one and the same
agreement.
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2 This Agreement contains the entire understanding between the parties hereto
with respect to the subject matter hereof and supercedes all prior and
contemporaneous agreements and understanding, inducements or conditions, express
or implied, oral or written, except as herein contained. This Agreement may not
be modified or amended other than by a writing signed by all other parties
hereto.
3 This Agreement shall be governed by and construed in accordance with the laws
of the State of New York as they are applied to agreements executed and
delivered and to be performed entirely within that State.
4 This Agreement shall be binding upon and shall insure to the benefit of the
parties and their respective heirs, executors, personal representatives,
successors, and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first written above.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
TW CABLE, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
DATAWORLD SOLUTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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A C K N O W L E D G E M E N T S
STATE OF NEW YORK )
: ss.:
COUNTY OF )
On the ___ day of June in the year 2004, before me, a Notary Public in and
for the State of New York, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF )
On the ___ day of June in the year 2004, before me, a notary public in the
State of New York, personally appeared ________________, known to me or proved
to me on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she/they
reside(s) in __________________, that he/she/they is(are) a member of TW CABLE,
LLC, a limited liability company, described in and which executed the above
instrument; that he/she/they is(are) authorized to sign the above instrument on
behalf of the limited liability company and that he/she/they signed
his/her/their name(s) thereto thereby binding the said company.
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF )
On the ___ day of June in the year 2004, before me, a Notary Public in and
for the State of New York, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF )
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On the ___ day of June in the year 2004, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say that
he/she/they reside(s) in _______________; that he/she/they is(are) the
______________ of DATAWORLD SOLUTIONS, INC., the corporation described in and
which executed the above instrument; and that he/she/they signed his/her/their
name(s) thereto by authority of the board of directors of said corporation.
Notary Public
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EXHIBIT "A"
Escrow Agreement
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