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Exhibit 4.1
D.H. BLAIR INVESTMENT BANKING CORPORATION
44 WALL STREET
NEW YORK, NY 10005
August 21, 2000
WorldWide Web NetworX Corporation
521 Fellowship Road - Suite 130
Mt. Laurel, NJ 08034
Attention: The Board of Directors of WorldWide Web NetworX Corporation
Gentlemen:
In an effort to protect the interests of all of the stockholders of WorldWide
Web NetworX Corporation ("WWWX") and the precipitous distress sale of, what is
arguably, the company's most valuable asset - the Entrade shares -D. H. Blair
Investment Banking Corp. ("Blair") hereby commits to lend WWWX the principal
amount of $3.6 million (the "Loan") upon the following terms:
Borrower: WorldWide Web NetworX Corporation
Lender: Blair Ventures-Fund I, Inc., an affiliate of Blair
Term: One (1) year (the "Maturity Date"); provided,
however, that the Maturity Date may be extended, at
the option of the Lender, from time to time, for up
to an additional two (2) years.
Interest Rate: 10% per annum, payable annually
Collateral: First priority security interest in all of WWWX's
assets (including the unregistered Rule 144 common
shares of Entrade Inc. owned by WWWX (the "Entrade
Shares"), the shares of Real Quest, Inc. (the "Real
Quest Shares") owned by WWWX and all other securities
owned by WWWX). In connection therewith, WWWX agrees
to take all steps necessary to perfect such security
interest, including filing all required financing
statements. In the event either the Entrade Shares or
the Real Quest Shares cannot for any reason be
pledged as collateral in connection with the Loan at
this time, WWWX agrees to deliver the Entrade Shares
and the Real Quest Shares to the Lender, to be held
by the Lender in escrow until such time as (i) the
Lender approves the release of such shares, or (ii)
the shares may be pledged to the Lender as collateral
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for the Loan, at which time the shares will be
pledged to the Lender as collateral for the Loan and
WWWX shall take all other steps necessary to perfect
the Lender's security interest therein.
Conversion Feature: The loan may be converted by the lender, at
any time, into common stock of WWWX at the rate of
$.75 per share, subject to standard and usual
anti-dilution rights, with two demand registration
rights (the first at WWWX's expense and the second at
the Lender's expense) and unlimited piggyback
registration rights.
Prepayment: The Loan can be prepaid, in whole or in part, at any
time, upon at least 10 days prior written notice to
the Lender; PROVIDED, HOWEVER, that in the event of
prepayment, WWWX shall issue to the Lender a Warrant,
exercisable at any time on or before the Maturity
Date (as extended), to purchase 1-1/3 shares of the
common stock of WWWX for the sum of $0.75 per share
for each dollar of prepayment (the "Warrant"). The
Warrant shall contain standard and usual
anti-dilution rights, two demand registration rights
(the first at the expense of WWWX and the second at
the expense of the Lender ) and unlimited piggyback
registration rights.
Use of Proceeds: Working capital (including payment of WWWX's
payables, severance payments and severance escrows).
Loan
Documentation: Convertible Promissory Note, Warrant Agreement, Stock
Pledge Agreement, Security Agreement, Escrow
Agreement and Financing Statements (the "Loan
Documents").
Closing Date: Closing of this transaction will take place and the
Loan proceeds shall be immediately wired upon receipt
of the Loan Documents, duly executed by WWWX, and the
satisfaction of all of the conditions set forth
below.
The Loan will be made according to the following conditions:
Borrower's Board
of Directors: William Weld, Warren Rothstein, Allan Cohen and
Michael Norton each resign as a member of WWWX's
board of directors; WWWX enters into Release and
Indemnification Agreements with each of the other
resigning directors; and Carol Knauff and Ronald
Tobia are appointed directors of WWWX.
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Payment of Loan
Fees: There will be no finder's fee payable in connection
with the Loan pursuant to the letter agreement, dated
September 23, 1999, between WWWX and D.H. Blair
Investment Banking Corp. WWWX shall pay all closing
costs and filing fees at closing.
Entrade Shares: The Entrade Shares shall either be pledged to the
Lender as collateral for the Loan or delivered to the
Lender, to be held by the Lender in escrow until such
time as (i) the Lender approves the release of such
shares, or (ii) the Entrade Shares are pledged to the
Lender as collateral for the Loan.
This is a firm commitment. We are a member of the New York Stock Exchange with a
net worth of 100+ million.
If the terms and conditions stated herein are acceptable to the Board, please
sign where indicated and return to our attention. This commitment shall be null
void and void unless it is executed and returned prior to the expiry date.
Keep up your superb work. May you go from strength to strength.
With kindest personal regards and best wishes for everything great always, I am
Sincerely,
J. Morton Davis
Chairman of the Board
ACCEPTED THIS ___ DAY OF AUGUST, 2000:
WORLDWIDE WEB NETWORX CORPORATION
By:_______________________________________
Name:
Title:
