Convertible Loan Commitment Agreement between D.H. Blair Investment Banking Corp. and WorldWide Web NetworX Corporation

Summary

D.H. Blair Investment Banking Corp., through its affiliate Blair Ventures-Fund I, Inc., agrees to lend $3.6 million to WorldWide Web NetworX Corporation (WWWX) for one year, with possible extensions. The loan is secured by WWWX's assets, including shares in Entrade Inc. and Real Quest, Inc. The lender can convert the loan into WWWX common stock at $0.75 per share. WWWX may prepay the loan, triggering a warrant for the lender to buy additional shares. The loan is for working capital, and closing is contingent on board changes and other conditions.

EX-4.1 2 ex-4_1.txt EXHIBIT 4.1 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 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. 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: