Exhibit 10.34
VIA FEDERAL EXPRESS
THE SHAAR FUND LTD.
c/x Xxxxxxxx Capital Management, L.L.C.
0 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxxxx
Re: $1,000,000 Investment by The Shaar Fund Ltd. in
Series B 6% Convertible Preferred Shares and a
Common Stock Purchase Warrant of DynamicWeb
Enterprises, Inc.
Dear Xx. Xxxxxxxx:
Reference is hereby made in this letter agreement (the
"1999 Letter Agreement") to the following documents:
(i) the Securities Purchase Agreement dated as of
August 7, 1998 (the "1998 Securities Purchase Agreement") between
DYNAMICWEB ENTERPRISES, INC., a New Jersey corporation with
principal executive offices located at 000 Xxxxx 00 Xxxx,
Xxxxxxxxx, XX 00000 (the "Company") and THE SHAAR FUND, LTD.
("Buyer");
(ii) the Registration Rights Agreement dated as of
August 7, 1998, (the "1998 Registration Rights Agreement")
between the Company and Buyer;
(iii) the Letter Agreement dated as of December 3,
1998 (the "1998 Letter Agreement") between DYNAMICWEB
ENTERPRISES, INC., a New Jersey corporation with principal
executive offices located at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, XX
00000 (the "Company") and THE SHAAR FUND, LTD. ("Buyer");
(iv) the Securities Purchase Agreement dated as of
February 12, 1999 (the "1999 Securities Purchase Agreement")
between DYNAMICWEB ENTERPRISES, INC., a New Jersey corporation
with principal executive offices located at 000 Xxxxx 00 Xxxx,
Xxxxxxxxx, XX 00000 (the "Company") and THE SHAAR FUND, LTD.
("Buyer");
(v) the Registration Rights Agreement dated as of
February 12, 1999, (the "1999 Registration Rights Agreement")
between the Company and Buyer;
(vi) the Common Stock Purchase Warrant No. 2 dated as
of May 12, 1999 ("Warrant No. 2") issued by the Company to Buyer
to purchase 90,000 shares of the Company's common
stock, par value $0.0001 (the "Common Stock");
(vii) the Escrow Instructions dated as of
May 12, 1999 (the "Escrow Instructions") among the Company, Buyer
and Weil, Xxxxxxxx & Xxxxxx, L.L.P. (the "Escrow Agent"); and
(viii) all other documents and instruments executed
and delivered by the Company or Buyer on the Initial Funding Date
in order to consummate the transactions contemplated pursuant to
the 1999 Securities Purchase Agreement (collectively, the
"Ancillary Documents"), and together with the 1999 Securities
Purchase Agreement, the 1999 Registration Rights Agreement,
Warrant No. 2 and the Escrow Instructions, collectively referred
to as the "Documents").
In order to consummate the acquisition by Buyer from
the Company of 1000 shares of the Company's Series B 6% Preferred
Stock, par value $0.001 (collectively, the "Preferred Shares")
and Common Stock Purchase Warrant (a copy of which is attached
hereto as Exhibit A) on the Second Funding Date, the parties
hereto hereby agree as follows:
1. Definitions All capitalized terms that are used and not
defined herein shall have the respective meaning assigned to them
in the 1999 Securities Purchase Agreement.
2. Amendments to the Documents.
(a) Without limiting the generality of the foregoing, the
following sections of the Documents are hereby amended as
follows:
(i) the reference in Section 2(b)(iv) of the 1998
Letter Agreement and the reference in Section 2(b) of the 1999
Registration Rights Agreement is amended and changed so that the
Company shall file such Registration Statement as required by the
1998 Letter Agreement and 1999 Registration Rights Agreements
within 7 business days of the closing of the Second Tranche
pursuant to the 1999 Securities Purchase Agreement and shall
cause the Securities and Exchange Commission to declare such
Registration Statement effective on or prior to July 9, 1999.
3. No Further Obligations. The parties hereto acknowledge and
agree that Buyer shall have no further obligation to purchase any
additional securities of the Company of any type under this
Letter Agreement or any of the Documents.
4. Closing Conditions. The Company represents, warrants and
covenants that all of the Second Funding Requirements set forth
at Section I.B. of the 1999 Securities Purchase Agreement have
been completed and satisfied in all respects.
5. Conditions to the Buyer's Obligations. The Company
understands that Buyer's obligation to purchase the Preferred
Shares and the Warrant pursuant to this 1999 Letter Agreement and
the Documents is conditioned upon:
(a) The Company's offer and the Buyer's acceptance of the
payment of One Hundred Twenty Five Thousand Dollars ($125,000) as
payment in full of any liquidated damages due from the Company to
the Buyer actionable under the 1998 Letter Agreement, the 1998
Registration Rights Agreement, and the 1999 Registration Rights
Agreement for all periods through July 9, 1999.
(b) Delivery by the Company to the Escrow Agent on the
Second Funding Date of: (i) one or more certificates (I/N/O
Buyer) evidencing the Series B Preferred Shares; (ii)the Warrant
No. 2 to be purchased by Buyer pursuant to the 1999 Securities
Purchase Agreement on the Second Funding Date; and the
disbursement of monies as directed in the Release Notice;
(c) The accuracy in all respects on the Second Funding Date
of the representations and warranties of the Company contained in
the 1999 Securities Purchase Agreement as if made on the Second
Funding Date (except for representations and warranties which, by
their express terms, speak as of and relate to a specified date)
and the performance by the Company in all respects on or before
the Second Funding Date of all covenants and agreements of the
Company required to be performed by it pursuant to this Agreement
on or before the Second Funding Date;
(d) Buyer having received an opinion of counsel for the
Company, dated as of the Second Funding Date, in form, scope and
substance satisfactory to the Buyer;
(e) There not having occurred (i) any general suspension of
trading in, or limitation on prices listed for, the Common Stock
on NASD/BBS, (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States,
(iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly
involving the United States or any of its territories,
protectorates or possessions, or (iv) in the case of the
foregoing existing at the date of this 1999 Letter Agreement, a
material acceleration or worsening thereof;
(f) There not having occurred any event or development, and
there being in existence no condition, having or which reasonably
and foreseeably could have a Material Adverse Effect;
(g) The Company shall have delivered to Buyer (as provided
in the Escrow Instructions) reimbursement of Buyer's out-of-
pocket costs and expenses incurred in connection with the
transactions contemplated by this 1999 Letter Agreement and the
1999 Securities Purchase Agreement (including the fees and
disbursements of Buyer's legal counsel);
(h) There shall not be in effect any Law or order, ruling,
judgment or writ of any court or public or governmental authority
restraining, enjoining or otherwise prohibiting any of the
transactions contemplated by this 1999 Letter Agreement or the
1999 Securities Purchase Agreement; and
(i) Solely with respect to the closing date occurring on
the Second Funding Date, the Company shall have satisfied or
performed all of the Second Funding Requirements and all other
conditions set forth in Section I.B. of the 1999 Securities
Purchase Agreement, or Buyer shall have waived the Company's
compliance with such requirements.
6. Conditions to the Company's Obligations. The Buyer
understands that the Company's obligation to sell the Preferred
Shares and Warrant No. 2 on the Second Funding Date to Buyer
pursuant to this 1999 Letter Agreement and the Documents is
conditioned upon:
(a) The Company's offer and the Buyer's acceptance of the
payment of One Hundred Twenty Five Thousand Dollars ($125,000) as
payment in full of any liquidated damages due from the Company to
the Buyer actionable under the 1998 Letter Agreement, the 1998
Registration Rights Agreement and 1999 Registration Rights
Agreement for all periods through July 9, 1999;
(b) Delivery by Buyer to the Escrow Agent of $1,000,000 on
the Second Funding Date subject to the disbursement of monies as
directed in the Release Notice;
(c) The accuracy in all material respects on the Second
Funding Date of the representations and warranties of Buyer
contained in the 1999 Securities Purchase Agreement as if made on
the Second Funding Date (except for representations and
warranties which, by their express terms, speak as of and relate
to a specified date, in which case such accuracy shall be
measured as of such specified date) and the performance by Buyer
in all material respects on or before the Second
Funding Date of all covenants and agreements of Buyer required to
be performed by it pursuant to the 1999 Letter Agreement or the
1999 Securities Purchase Agreement on or before the Second
Funding Date; and
(d) There shall not be in effect any Law or order, ruling,
judgment or writ of any public or governmental authority
restraining, enjoining or otherwise prohibiting any of the
transactions contemplated by the 1999 Letter Agreement or the
1999 Securities Purchase Agreement.
7. Deliveries Upon the Second Funding Date. Upon the Second
Funding Date, the Company shall deliver to Buyer the following
documents and instruments, all in the form, scope and substance
satisfactory to Buyer:
(a) one or more certificates (I/N/O Buyer) evidencing the
Series B Preferred Shares;
(b) Warrant No. 2 (I/N/O Buyer)in the form attached hereto
as Exhibit A;
(c) one or more Amendments to the Company's Certificate of
Incorporation filed with the Secretary of State of New Jersey;
(d) the opinion of counsel for the Company dated as of the
Second Funding Date in similar form to the opinion delivered on
the Initial Funding Date;
(e) an Officers' Certificate of the Company in similar form
to the Officers' Certificate delivered on the Initial Funding
Date;
(f) a Certificate of Good Standing as of the Second Funding
Date; and
(g) the Minutes of the Special Meeting of the Board of
Directors of the Company approving the transaction contemplated
by this 1999 Letter Agreement and the Documents.
8. Closing. The issuance and sale of the Second Tranche shall
occur on the Second Funding Date at the offices of the Escrow
Agent (as defined in the Securities Purchase Agreement) in
accordance with the terms and provisions of the 1999 Securities
Purchase Agreement.
9. Governing Law; Miscellaneous. This 1999 Letter Agreement
shall be governed by and interpreted in accordance with the laws
of the State of New York, without regard to the conflicts of law
principles of such state. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any
part of the City of New York or the state courts of the State of
New York sitting in the City of New York in connection with any
dispute arising under this 1999 Letter Agreement and hereby
waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. A
facsimile transmission of this signed 1999 Letter Agreement shall
be legal and binding on all parties hereto. This 1999 Letter
Agreement may be signed in one or more counterparts, each of
which shall be deemed an original. The headings of this 1999
Letter Agreement are for convenience of reference and shall not
form part of, or affect the interpretation of, this 1999 Letter
Agreement. If any provision of this 1999 Letter Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or
enforceability of the remainder of this 1999 Letter Agreement in
any other jurisdiction. This 1999 Letter Agreement may be
amended only by an instrument in writing signed by the party to
be charged with enforcement. This 1999 Letter Agreement
supersedes all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof.
10. Notices. Except as may be otherwise provided herein, any
notice or other communication or delivery required or permitted
hereunder shall be in writing and shall be delivered personally
or sent by certified mail, postage prepaid, or by a nationally
recognized overnight courier service, and shall be deemed given
when so delivered personally or by overnight courier service, or,
if mailed, three (3) days after the date of deposit in the United
States mails, as follows:
(a) if to the Company, to:
DYNAMICWEB ENTERPRISES, INC.
000 Xxxxx 00 Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Xx.
Telephone: (000)000-0000
Facsimile: (000)000-0000
With a copy to:
Xxxxxxx & Xxx
One Glenhardie Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
Facsimile: (000)000-0000
(b) if to the Buyer, to:
THE SHAAR FUND LTD.
c/x Xxxxxxxx Capital Management, L.L.C.
0 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
with a copy to:
Weil, Gotshal & Xxxxxx LLP
Attention: Xxx Xxxxxxxx, Esq.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
The Company, the Buyer or the Escrow Agent may change the
foregoing address by notice given pursuant to this Section 11.
11. Confidentiality. Each of the Company and Buyer agrees to
keep confidential and not to disclose to or use for the benefit
of any third party the terms of this Letter Agreement or nay
other information which at any time is communicated by the other
party as being confidential without the prior written approval of
the other party; provided, however, that this provision shall
not apply to information which, at the time of disclosure, is
already part of the public domain (except by breach of this
Letter Agreement) and information which is required to be
disclosed by law (including, without limitation, pursuant to Item
10 of Rule 601 of Regulation S-K under the Securities Act and the
Exchange Act).
12. No Further Modification. Except as specifically provided in
this Letter Agreement, nothing herein contained shall otherwise
modify, reduce, amend or otherwise supplement the terms and
provisions of the Documents, each of which remain in force and
effect.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
PAGE 7
This letter is being delivered to you in duplicate. If
it accurately describes the agreement between us, kindly so
indicate by signing and returning one copy to the undersigned
whereupon it will constitute our agreement with respect to the
matter set forth above.
Sincerely,
DYNAMICWEB ENTERPRISES, INC.
By:________________________________
Name
Title
AGREED TO AND ACCEPTED
this __ day of _____, 1999
THE SHAAR FUND, LTD.
By:________________________________
Name:
Title:
